Former Propulsion Chief Accuses Virgin Galactic of Lying About SpaceShipTwo’s Safety, Performance

SpaceShipTwo after being released for its final flight. (Credit: Virgin Galactic/NTSB)
SpaceShipTwo after being released for its final flight. (Credit: Virgin Galactic/NTSB)

By Douglas Messier
Managing Editor

Virgin Galactic’s former vice president of propulsion, Thomas Markusic, has accused Richard Branson’s space company of lying about the safety and performance of its SpaceShipTwo suborbital tourism vehicle.

“Dr. Markusic was forced to separate from VG [Virgin Galactic] because the company was defrauding the public about the ability of the vehicles to reach space and was utilizing rocket engine technologies that have a high probability of causing catastrophic failure and loss of life,” according to the document.

“VG directed Dr. Markusic to lie to customers about the performance and safety of the company’s hybrid rocket technology,” the document continues. “VG asserts that Dr. Markusic secretly plotted to start his own rocket company and exploited his position at VG; whereas, in reality, Dr. Markusic’s conscience forced him to to leave.”

Virgin Galactic has dismissed the claims by Markusic, who left in January 2014 to head up a rival company, Firefly Space Systems, that is directly competing with Virgin in developing small satellite launch vehicles.

“This comment was shocking to Virgin Galactic considering that Markusic did not raise such concerns during his employment with Virgin Galactic,” the company responded. “Markusic’s ‘crisis-of-confidence’ claims also ring hollow when considered in the context of Markusic’s breach of contract counterclaim, which alleges that he expected to enter into a consulting arrangement with Virgin Galactic upon the end of his formal employment.”

Markusic’s explosive allegations are part of a year-old arbitration process Virgin Galactic launched against its former propulsion chief in December 2014. Virgin claims that Markusic secretly conspired with two SpaceShipTwo ticketholders to found Firefly while he was still employed at Branson’s company in violation of his employment agreement.

Virgin Galactic further alleges that Markusic illegally appropriated proprietary information, documents, engineering notebooks, and a business plan for use at his new company. Virgin also claims he improperly approached its employees and investors while seeking to hide his actions.

“Markusic has destroyed storage devices, disposed of computers, and reformatted hard drives to cover the tracks of his misappropriation of Virgin Galactic information,” the company alleges.

Markusic has denied the charges, saying that the rocket technology that Firefly is developing is not based on work he did at Virgin Galactic.

In legal papers, he calls Virgin’s actions “nothing more than a veiled attempt to impose a non-compete agreement against Dr. Markusic when one does not exist and in a state which prohibits such agreements….Contrary to VG’s bogus and slanderous assertions, however, Dr. Markusic has not violated any agreement or duty to VG, and VG has not suffered harm as a result of Dr. Markusic’s conduct.”

“Through this claim and the cost and the time associated in defending the claim, VG seeks to suppress future competition by tortuously interfering with Dr. Markusic’s present employment at Firefly, and seeks to stifle Firefly’s efforts to raise capital and recruit employees,” the papers state.

Virgin Galactic has asked the arbitrator, Louise A. LaMothe, to enter an award that would essentially put Firefly out of business and sideline Markusic for at least a year. Specifically, Virgin has asked for an award

“declaring that Virgin Galactic owns the technology and business plan Respondent [Markusic] is using in his new business; ordering Respondent to return to Virgin Galactic its Confidential Information; enjoining Respondent from further utilizing Virgin Galactic’s Confidential Information, including the technology and business plan Respondent developed while he was a Virgin Galactic employee, and from further soliciting Virgin Galactic’s employees; ordering Respondent to pay Virgin Galactic damages according to proof; and ordering other appropriate relief such as disgorging Respondent’s ill gotten gains and requiring Respondent to stand down from further development of his spaceship business for a period of at least one year to prevent Respondent from profiting from disloyal, illegal and contract breaching activities.”

Between May 2011 and January 2014, Markusic led the development of Virgin Galactic’s Newton family of liquid rocket motors for use in the LauncherOne booster. The NewtonThree engine also was considered as a possible replacement for the hybrid engines used in SpaceShipTwo, sources say.

A key date in the dispute is March 28, 2013. Virgin Galactic CEO George Whitesides had arranged a tour of the company’s facilities in Mojave, Calif., for SpaceShipTwo ticket holders P.J. King, Michael Blum and Edwin Sahakian. Markusic discussed the company’s liquid propulsion work with the three visitors.

Virgin alleges Markusic later met with King and Blum and commenced plans to form Firefly.

“At the same time Respondent told Virgin Galactic senior management that he was interested in possibly starting his own company, he hid the fact that he had already started the company and was already soliciting Virgin Galactic employees and investors using Virgin Galactic’s resources and technology while he was still working at Virgin Galactic,” the arbitration demand states.

Markusic says he was upfront with Virgin Galactic management about his plans to leave as they evolved throughout 2013. In the summer, he met with Whitesides and President Steve Isakowitz to propose that he start a rocket parts company and become a supplier to Virgin Galactic, according to legal papers.

Markusic says he informed Whitesides in November that he was leaving the company. Whitesides asked him to stay employed for a few more weeks and not to publicize his departure for six months because Virgin was attempting to sell the rocket team to Google, Markusic said in legal papers.

Virgin Galactic claims their propulsion chief left because he became frustrated with the company’s rejection of some of his rocket engine proposals. Markusic points to safety concerns and a lack of confidence in the company as key reasons for his departure.

“On or before April 21, 2013, the Respondent became increasingly concerned about Virgin Galactic’s viability and increasingly concerned about the safety of Space Ship II,” according to an arbitration document. “The Respondent also become increasingly concerned by representations being made by Virgin Galactic about Space Ship II’s safety and performance.”

At that time, Virgin was making expansive safety claims about SpaceShipTwo on its website.

“Safety is Virgin Galactic’s North Star,” the company stated. “Our excitement in 2002 on discovering Burt Rutan’s plans for SpaceShipOne focused on a number of design features which we believed in their own right could make the vehicles many thousands of times safer than any manned space craft of the past. Overlay that with Virgin’s experience in transportation operations and there potentially existed a unique opportunity to transform levels of safety from day one; a prerequisite for any responsible operator and in particular for Virgin Galactic. “

Virgin also advertised the “simplicity and safety” of SpaceShipTwo’s hybrid motor, claiming that the nitrous oxide and rubber used in it were “both benign, stable as well as containing none of the toxins found in solid rocket motors.”

The April 21, 2013 date Markusic cites was eight days prior to SpaceShipTwo’s first powered flight test. On an April 29 flight, the ship’s hybrid engine fired for 16 seconds. Subsequent tests in September and January included engine firings of 20 seconds apiece. On the third flight, SpaceShipTwo reached a maximum altitude of 71,000 – far below the internationally recognized boundary of space of 328,084 feet (100 km or 62.1 miles) known as the Karman line.

Sources have told Parabolic Arc that during that period Virgin Galactic and Scaled Composites, which built SpaceShipTwo, were struggling to get the hybrid engine to work. If the engine had been fired to full duration of about a minute, it would have caused dangerous vibrations and oscillations in the spacecraft.

SpaceShipTwo’s performance was also adversely affected by extra weight it gained during its construction.  In 2014, Virgin Galactic officials admitted that the spacecraft could not reach 100 km (62.1 mile). SpaceShipTwo would instead fly to the 50 mile (80 km) boundary of space the U.S. Air Force used for awarding astronaut wings to X-15 pilots in the 1960’s.

Although Virgin Galactic had publicly advertised that SpaceShipTwo would fly above the Karman line, the company’s agreement with ticket holders only stipulates a flight to at least 50 miles (80 km).

Virgin Galactic’s arbitration against Markusic proceeded in private for a year before becoming public last month. Firefly’s King filed a public lawsuit in Los Angeles seeking to reduce the scope of a ruling signed by arbitrator LaMothe ordering Markusic, King, Blum and Firefly to turn over company documents, computers and other materials to Virgin Galactic for review.

The lawsuit states that King should be excluded from turning over documents because he was not a party to the employment agreement Markusic signed with Virgin Galactic. It also accuses Virgin Galactic of launching “an astonishingly broad fishing expedition to discover the proprietary and trade secret information of what it perceives to be a new competitor, Firefly.”

A hearing on King’s suit against Virgin Galactic is scheduled for Friday in Los Angeles.

On Dec. 28, Virgin Galactic filed a legal action in Clark County, Nev,, to compel Blum to comply with the arbitrator’s ruling to turn over documents to Virgin Galactic. A hearing on that suit is scheduled for Jan. 29 in Las Vegas.

  • Aerospike

    *Popcorn*

    That evolved into mud-slinging very quickly…

  • windbourne

    Looks like quite the cluster*.
    What is sad is that VG does NOT need this kind of publicity.
    Worse, it is going to be lawsuit after lawsuit with deep pockets going at it.

  • Enrique Moreno

    I hope Markusik can prove his claims (for example, with an internal memorandum about safety and performance issues when he was in VG). If not, VG could open a new lawsuit against him.

    Any way, I think VG is doing it the wrong way. It is a very, very bad publicity and it is very difficult to prove that Firefly is using VG technology different of general knowledge about liquid rocket engines.

    Attacking a former employed, talks bad things about a company with no real state of the art technology.

    Regards.

  • Chief Galen Tyrol

    Well this is effing messy. As an outsider looking in, I don’t see many commonalities between Launcher 1 and the Fireflies. Fireflies are self-pressurized methalox with aerospike engines and the Newtons for Launcher 1 are pumpfed kerolox. Fireflies are launched conventionally and Launcher 1 is air launched.

  • ThomasLMatula

    This is getting nasty. Two things come to mind. First, if VG was hiding and misleading about the safety of SS2 it seems to me that the FAA AST might well take an interest in the matter. Second, if VG has made misleading and deceptive statements to its ticket holders the Federal Trade Commission might also take an interest under its powers requiring truth in promotion and advertising. Neither will be good for the industry’s image since so many folks, because of the Ansari X-Prize, see VG as the poster child for the space tourism industry.

  • Matt

    Is VG really claiming they own the “business plan” for small satellite launch? Weak.

  • Douglas Messier

    The FAA AST’s main job is to protect the uninvolved public and their property. That primarily means making sure these things are flown over lightly populated areas and that nobody on the ground gets hurt or killed if something goes wrong.

    This barely worked on the SpaceShipTwo crash; if the debris had hit a couple of seconds earlier, two truck drivers and their vehicles would have been hit by Alsbury and part of the cockpit.

    I’ve always thought the oversight system has a big flaw in that these guys are held to almost no regulations while being able to claim whatever they want about schedule and performance. The entire approach transfers as much risk to passengers and all but assumes there will be accidents, but the main restraint on safety claims is a waiver you sign right before the flight.

    With this setup, what would the FTC be able to do?

  • Søren_88

    agree that vg appears to be overreaching, but am i the only one reading that Marckusic was ruled against by a neutral 3rd party arbitrator? there’s got to be some validity to their claims.

  • JS_faster

    The model is experimental aviation and, well… voluntary high risk sports and hobbies. Space and rocketry is going to be dangerous, no amount or regulation is going to change that. But onerous regulation will strangle innovation and the growth of the private space industry. I guess effectively prohibiting anyone from going to space (“Its scary, you might get hurt!”) is one way of solving your dilemma.

    A waiver is just where a lawsuit starts, not immunity. An org that causes casualty or does not live up to promises will not last long. Not only is it a self-solving problem, it is also incentive enough to take prudent steps, other than because the Government tells you to.

  • Douglas Messier

    That self-solving problem could destroy the whole industry. Some big crash, someone prominent dies, customers and public realize there are no real safety regulations on the industry and it will take the FAA years to write them. In retrospect, all of the hype the companies put out about safety appears to be a lie. Everyone in the industry gets a bad name, people cancel their reservations, ticket sales tank…..

    In the end, the lack of regulations and government oversight could become a millstone around the industry’s neck. It’s a potential danger people don’t seem to fully appreciate.

    Suborbital space travels serves the adventure tourism industry and the scientific microgravity community. The former is probably required to make the latter viable, I think. The larger point is that they don’t serve point to point travel. It’s not a faster way to get people and cargo from one place to another. So, it’s much more sensitive to fatal accidents. Trains, planes and automobiles could survive accidents because they provided benefits to people and commerce. They weren’t just joyrides.

  • ThomasLMatula

    The FTC would be involved in regards to the claims that the ticket holders will be able to reach “space” at 50 miles up. If SS2 doesn’t go that high then it could be seen as a false performance claim for a good/service.

    A good example of a FTC action in this regard was the Airborne advertisements that claimed it prevented colds when they had no proof it did.

    https://www.ftc.gov/news-events/press-releases/2008/08/makers-airborne-settle-ftc-charges-deceptive-advertising

    But generally the FTC keeps hands off unless consumers start complaining, or competitors. But if this becomes a media scandal they could be forced into taking notice of it, especially as the FTC, having a limited budget, likes to use high profile cases to remind firms about the risks of making false statements.

    In terms of the first statement regarding the FAA AST, if firms are saying one thing on safety, but doing another it could call into question the validity of the FAA AST keeping hands off on the grounds that the firms are being self-regulating. In short it provides them with an opening to say, “we trusted the industry in giving them a regulation free holiday, but look how this firm misused the trust.”

    But also in terms of existing licensing, the risk to third parties is based on the probability of an accident and the possible consequences if one occurs. If the risk from an accident was higher than stated, and the firm knew that, then the implied risk to third parties would be higher than stated on the application for the experimental permit for the flight testing. This could have implications for future permits if the FAA AST feels it is not able to trust what VG in particular and launch firms in generally are telling them.

  • ThomasLMatula

    I agree and their is an historical precedent. Aviation was very lightly regulated until the crash by TWA that killed the famous coach Knute Rockne. Following the Congressional investigation the world changed overnight with much stricter regulations on everything. TWA almost went under and the era of wooden airliners came to a quick end with only expensive metal ones being allowed.

  • JS_faster

    Only if the space industry gets “Hindenburged” (massive regulatory over-reaction due to a spectacular accident).

    Part of the appeal of space tourism is the perceived and real danger. Private aircraft, fast cars, ect. esp. in racing kill people on a regular basis, but it is an accepted aspect of those activities. Private space won’t be any different unless the Nanny State steals it.

    Commercial traffic is different because in those, passengers/participants and using it as a means of transit from one place to another, not the experience itself.

  • Snofru Chufu

    I hope Trump will help to end the Nanny State installation performed by Obama and Co and reverse it.

  • Jacob Samorodin

    What does that have to do with Virgin Galactic?

  • Jacob Samorodin

    With Virgin Galactic’s safety record tarnished, with XCOR on life-support, that leaves only one player left in the Space Tourism stakes.
    Is Jeff Bezos reading this?

  • rocketwife1212

    I was told before they even had a crash that their Safety person left because he wasn’t comfortable with some things going on there. Considering what ended up happening I think a lot should just speak for itself. Virgin should have weighed the consequences better of having this information become public before they decided to be vengeful.

  • Chief Galen Tyrol

    I suspect there will be multiple big crashes and famous people will die. But I think it will motivate improvements to the technology rather than a death knell for spaceflight. When Knute Rockne (beloved Notre Dame football coach) died in a Fokker trimotor crash, the reaction wasn’t to stop flying airplanes altogether, but stop flying airplanes made out of plywood.

    (All this talk of safety is just begging for a snarky book plug from Rand Simberg.)

  • Chief Galen Tyrol

    Oh shucks, you beat me to it! I just posted a nearly identical comment.

    Though I don’t claim TWA 599 destroyed the airline industry, rather it changed it for the better.

  • JS_faster

    They do. Which is why all the public “drauma”…

  • JS_faster

    No they claim he developed it on their computers and on their time.

  • patb2009

    Firefly is also using a modular aerospike baseline.
    However, there may be details in the avionics, structure, or design tools
    that may be an issue….

  • patb2009

    It’s a pity so many ideologues believe that every safety reg is tyranny from the nanny state.

  • Chief Galen Tyrol

    I don’t think every safety regulation is tyranny.

  • Douglas Messier

    This story becoming a media scandal would require the media to actually write about it (as opposed to a medium, which is basically me). Not only would they have to write about the arbitration, they’d have to dig deeper into the larger issues of candor (or lack of it) and safety (ditto).

    As far as I know, nobody else has written word one about the arbitration. And I’ve seen little or no digging into the larger issues that are raised here.

    Perhaps this is a sign the suborbital joyride industry is simply not important enough to worry about. As long as it remains an overhyped and under delivering industry, I imagine it will stay that way.

  • Douglas Messier

    Again, there’s a difference between joyrides to space (or somewhere close to it) and point to point travel.

  • HyperJ

    Firefly is now using KeroLox, they have abandoned MethaLox for now.

  • Snofru Chufu

    It is a direct answer/support to JS_faster’s statement: ” Private space won’t be any different unless the Nanny State steals it.”

  • Mike T.

    Does anyone have additional background from other sources about whether safety was a known concern to the internal VG team prior to the crash? At least 4 people have been killed during the development of SpaceShip 2. Were they cutting corners on safety the whole time? After the crash there was an interview with a friend of one of the pilots where he said the pilots knew safety issues existed and he accused VG of negligence.

  • Chief Galen Tyrol

    Huh, okay that makes sense because they tweeted a picture of a test fire and the plume definitely didn’t look methalox. Do you know if they’re going pump fed or pressure fed?

  • JS_faster

    No, he is busy making millions of dollars. But he might be having someone read it…

  • ThomasLMatula

    Which is probably a good thing given its slow development. As for it becoming a media scandal, I agree it is very unlikely unless Sir Richard gets dragged into it. If he is then the media will take notice simply because of his name. But I imagine the FAA AST will be following events, or should be, if they are going to responsibly regulate the industry.

  • ThomasLMatula

    Actually their was no major regulatory reaction to the LZ129 Hindenburg. Germany, the only nation still flying passenger airships, was already planning to use Helium in its replacement the LZ130. But when Germany annexed Austria in 1938 the U.S. refused to export it to Germany. Then WWII ended work on the LZ130.

    Passenger airships were then basically forgotten after the war because of the huge leap forward in fixed wing commercial airliners which now flew folks across the Atlantic in hours instead of days. The were also better able to keep flight schedules since they were less sensitive to weather and winds. Combined with the public memory created from the film of its crash and it is no wonder that all you have today are sight seeing blimps.

    But don’t blame regulators for it, it wasn’t the “nanny state” that ended airship travel, it was simple economics and public attitudes.

  • Douglas Messier

    There have been a number of Parabolic Arc stories that have dealt with safety and performance misstatements:

    Branson’s Jaw Dropping Press Conference in Mojave
    http://www.parabolicarc.com/2014/11/19/branson-jaw-dropping-press-conference-mojave/

    Virgin Galactic Misled Ticket Holders, Public on Complexity of Engine Change
    http://www.parabolicarc.com/2015/08/02/virgin-galactic-misled-ticket-holders-public-complexity-engine-change/

    “Minor Nuance” in SpaceShipTwo’s Propulsion System was Neither
    http://www.parabolicarc.com/2015/10/13/minor-nuance-spaceshiptwos-propulsion-system/

    Virgin Galactic Spins Its Way Back to Rubber Engine for SpaceShipTwo
    http://www.parabolicarc.com/2015/10/20/virgin-galactic-spins-rubber-engine-spaceshiptwo/

  • Douglas Messier

    There were significant concerns about safety, the new nylon engine, the shortened schedule for powered flights. The nylon engine had been lightly tested on the ground, the PF04 flight was very ambitious, there were only going to be a handful of additional powered flights before Branson would climb aboard. That SpaceShipTwo was a “proof of concept” prototype that Scaled never envisioned for commercial use.

  • Hemingway

    Doug – I was unable to access the document with Dr. Markusic’s allegations.

  • Douglas Messier

    I don’t think they’re online yet. At least not the ones in Clark County district court. The LA docs are online and can downloaded, but I’m not sure they contain the arbitration docs.

  • Douglas Messier

    U.S. airships used helium, but they never caught on the same way they did in Germany. Airships were primarily used by the military, but they had a tendency to break apart in bad weather. Given its geography, the U.S. has the most severe weather of any nation on the planet.

    I’m guessing the zeppelins were doomed one way or the other even had the Hindenburg not gone down in 1937. The German zeppelins had a really good record, but if one crash (albeit a spectacular one) could doom them, I don’t know what sort of future they had. Especially without helium. Their speed and the economics behind them (Hindenburg had more crew than passengers) probably doomed them in the long run. Passenger ships could carry far more people, and airplanes eventually grew powerful and safe enough to supplant airships.

  • windbourne

    Hmmm.
    I wonder what impact this will have on Blue Origin and XCOR?
    this could hurt their ability to get paying customers.

  • JS_faster

    This is not correct, Google up the Congressional hearings and the Commerce Dept. accident report and resultant regulations. To this day, airships for passenger service have the strictest, most detailed regulation of any aircraft type. To the point where it is uneconomical to even try. That is what I meant by getting “Hindenburged”.

  • JS_faster

    Actually that accident just coincidentally coincided with the development of the electrical grid that could support the efficient mass production of aluminum alloys which allowed its widespread adoption in aircraft design, which has higher strength and requires less maintenance than wooden structures. It was a failure to maintain the Fokker F10 that lead to the crash, not that it was made from wood. But most of the all-metal aircraft were already on the drawing board or in flight when TWA599 crashed. But the execs from Boeing and Douglas could recognize a publicity opportunity when they could run with it.

    To slew back on topic, the only problem/danger I see with the association of VG with Virgin Airlines is that if there is another accident with passengers, people and regulators will correlate the two, assuming that a sub-orbital experience ride, should be as risk-free as an airliner flight, And they never will.

  • patb2009

    I’m sure a number of acolytes of Ayn Rand and Ludwig Von Mises can explain how the most important thing would be to eliminate the FAA and let the free market work this out….

  • patb2009

    i suspect the operating costs of airships were also prohibitive. Those hangers at Ames are not cheap to build or operate and the hundred man ground crew is quite the operating cost. Plus the airframes are slow. To a first order the faster you fly the more money you make. An airship wasn’t light either. 250 Tons, so not cheap to build. Only real advantage was lower fuel burn.

  • Mike T.

    Is this potentially why VG took over the test flight program? From the above, it sounds like Scaled may have dropped out due to safety concerns. Are there any former VG or Scaled employees that have gone on the record about potential safety issues? This is going to be very interesting in February when they roll out the new SS2. I wonder if these questions will be covered by the media during their coverage of the event.

  • Douglas Messier

    Not exactly. Several years ago, Scaled sold its shares in The Spaceship Company to Virgin Galactic. Or, probably more accurately, Northrop Grumman (which owns Scaled) decided to sell off their interest in the company.

    Northrop has never said why, but I could probably guess. For one, I think Burt Riutan was gone by that point. This was really something Burt wanted to do. Northrop Grumman is a big mega-contractor with bigger fish to fry.

    Anyway, Scaled’s main job was complete the development and testing of WK2 and SS2 and deliver them to Virgin. WK2 was turned over; SS2 crashed while still in flight test. So, it’s now up to Virgin to build another ship and take over testing of that.

    There were people with concerns about safety. It’s difficult to go on the record given non-disclosure agreements.

  • Vultur

    Adventure tourism inherently accepts high risk, though, doesn’t it? There are still commercial Everest treks despite people dying on those…

  • Mike T.

    Where did the information in this story come from? Do you have a link to the document?

  • Douglas Messier

    Out of sight, out of mind. It’s way over there. People know it’s dangerous. And I’m guessing (I haven’t actually looked) there isn’t anyone promising to make climbing Everest a thousand times safer than it ever has been in the past.

    Space tourism is high profile with the rich & famous as ticket holders. Not a lot of celebrities climbing Mount Everest.

    Look at how much global coverage one flight test failure in rural California received. Ken Brown’s photos of the breakup were shown all over the world soon after the crash.

    You’re also dealing with technology that can be grounded for months following a crash. Someone dies on Everest, do they spend six months redesigning the climbing equipment? No.

    I’m not saying there aren’t parallels to other adventure travel, but there are many differences that matter a lot.

  • Douglas Messier
  • Vultur

    Global coverage, sure, but that doesn’t necessarily mean people will drop it like a hot potato. Most people who do it probably already know it is risky.

    Grounding flights for a while would hurt the companies’ revenue, but I don’t think it would make people see the whole thing as more unsafe than otherwise. (Assuming they *would* be grounded – if suborbital flight were to be seen as ‘adventure tourism’ rather than ‘transportation’ that doesn’t seem a foregone conclusion).