Held Hostage: Video 
Behind the Lines: Podcast 
The Sting
More FBI follies! Instead of rooting out corruption at NASA, Operation Lightning Strike exposed little more than the bureau’s ruthlessness.
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Francis has said that from the start of their dealings, Jackson and all the other defendants knew that the lithotripter was a fraud. The government has released only a tiny portion of the thousands of hours of tape made during Lightning Strike. The available transcripts confirm that Francis-Clifford presented himself as a scumbag—a successful scumbag—and more than once he tells Neal Jackson and others that his primary concern is getting money from NASA, that he could care less if the equipment works. The Clifford character was a fountain of jabbering promises and mixed signals, but nowhere does he say the lithotripter is fake.
What is clear is that the undercover agent used all of his ample resources to establish himself as a legitimate businessman and that he manipulated his targets and led them “down the slippery slope of impropriety,” as Houston attorney Dick DeGuerin has described it. Francis worked for more than a year to manipulate Neal Jackson into committing a crime. At each stage, Clifford is the one who suggests the impropriety—paying in cash, hiding money in offshore accounts, creating a phony financial statement, trying to influence an astronaut to sneak their proposal through the back door, using insider information to gain contracts. His back to the wall, his career and family in jeopardy, Jackson finally agreed to pay a $500 bribe. Neal may have been weak, greedy, and not too bright, but if he is a criminal, it’s because the government enticed him to be one.
With Jackson in his back pocket, Clifford moved with relative ease. Seduced by the promise of huge profits from the lithotripter, the targets didn’t ask a lot of questions, and many bent over backward to please Clifford. For example, Verlander was enticed to write a proposal by the promise of 25 percent of lithotripter funding, and Verlander brought his pal David Proctor into the mix by lying that he had a mole planted deep inside Life Sciences. No telling how many people Clifford had in his sights: Art Schultz says the bureau eventually collected 40 to 50 prosecutable cases, though only 22 were turned over to the U.S. Attorney and 7 of those were rejected for insufficient evidence. A bitter debate ensued among various levels of bureaucrats over who should and should not be prosecuted.
Frequently the government’s requirement of predisposition came down to Jackson’s word to Clifford that a suspect was “our kind of guy.” Jim Beggs was targeted because Jackson remarked, “He knows how the game is played” and because another aerospace consultant (himself a target) confirmed that “Beggs and Associates knows how to spend your money without you winding up in jail.” The former NASA director escaped the trap, but his consulting partner, Jim Robertson, admitted accepting a proprietary document that, at the time the crime was allegedly committed, he had repeatedly told Clifford not to give him. An executive with Astro International fell for a similar trick. Clifford stuffed a brochure into the man’s pocket; folded inside was bidding information for a contract the company had already lost. The executive told me that he pleaded guilty, on the advice of his lawyer, to avoid being suspended from doing government business. Most of those who dared speak to an attorney were advised of the hopelessness of their positions. Vince Maleche, a division director at GE Government Services who pleaded guilty to accepting $2,500 from Clifford-Francis in return for placing Eastern Tech on a “short list” of bidders, was told by his lawyer that these were his options: He could live out his life on a half-acre plot in Alvin and maybe be found innocent or keep what he had and plead guilty. “The economics of pleading innocent were astronomical,” Maleche said.
Once the warehouse treatment began, they fell like dominoes. Maleche gave up his boss, Tony Verrengia, a retired Air Force officer who had joined NASA in 1964 and was one of the first men assigned to the space shuttle program. Verrengia gave up Carter Alexander, a pioneer of the manned space program who was the civilian equivalent of a general at Brooks Air Force Base in San Antonio and a few weeks from retirement after a distinguished 31-year career. Alexander, at the FBI’s direction, was helping to set up a slush fund to trap Carolyn Huntoon when Lightning Strike was leaked to the media. Though Huntoon was not a target during the covert operation, she became one after Proctor and Alexander flipped.
The truism that an honest man cannot be bribed was put to the supreme test by a relentless agent with an unlimited government expense account. Eventually, all the defendants succumbed to repeated temptations. They accepted cash for what appeared to be legitimate work and eventually turned over or accepted proprietary documents, at which point the cash became bribes. All of them did something that at least smacked of impropriety—including the corporations who allegedly accepted inside information. The $10,000 computer that David Proctor believed that he borrowed was viewed by the government as evidence that he took a bribe in return for using his influence to ram the lithotripter through NASA. This is ludicrous: Proctor was a peon in Life Sciences. But convincing a jury that he was not the mythical mole of which Verlander spoke so freely would have been difficult. Even though Proctor cooperated and did everything the FBI asked—including illegally entering a building and copying a credit card number—Proctor was one of only two defendants to get jail time. His real crime may have been talking to reporters for CBS. Ironically, long before Clifford showed up, Proctor was writing anonymous letters to the NASA inspector general reporting incidents of fraud and mismanagement and asking for an investigation.
Of the thirteen individuals who were ultimately fingered in Lightning Strike (two corporations were also nailed), Dale Brown was the only one who didn’t cop a plea. Brown’s rich uncle in New Jersey hired Dick DeGuerin, one of the few lawyers in Houston willing and able to challenge the sting. Once DeGuerin signed on, the government reduced the number of felony charges against Brown from 21 to 1, the only one they had any chance of proving—the $500 bribe to the man from Tobyhanna. DeGuerin’s defense was that his client had been entrapped. “If I show enticement on the part of the government,” the lawyer argued, “then the government has the burden of proving that Brown was willing to commit a similar crime before being enticed by the government. If the enticement is great enough, then predisposition is not a factor.” The judge didn’t buy that argument for summary judgment. An appeals court might have, but the point became moot when the jury deadlocked and a mistrial was declared. After interviewing the jurors, the government decided to drop the charge against Brown.
Lightning Strike accomplished several things, all of them negative. A brigade of federal agents worked 21 months and spent millions of dollars to trap such desperadoes as Jackson, Brown, and Proctor. Meanwhile, if there really were top-flight executives indulging in fraud and corruption, they are free to try again. The operation did prove that the space center had problems in its Life Sciences Division. The FBI was able to bypass the procurement system and run its lithotripter proposal through not once but three times. Carolyn Huntoon has said she rejected the proposal three times. In 1995 Huntoon lost her job as director of the space center; now she’s a NASA representative at the Office of Science and Technology in Washington, D.C. (Huntoon did not return phone calls requesting an interview.) Hal Francis resigned from the FBI, embittered by what he believes was a political decision to halt the sting prematurely. He now runs a private investigation agency in the Houston area and has written a book about Lightning Strike that has yet to attract a publisher. In the wake of the acrimony that developed between the FBI and the U.S. Attorney’s Office over the sting, Abe Martinez requested a transfer from white-collar crimes to organized crime and narcotics.
Lightning Strike ended its covert phase in December 1993, a time when a major scandal could have seriously damaged the space center’s attempts to fund the U.S.-Russian space station. “Let me propose a scenario,” says Art Schultz, who retired from the FBI in 1995. “Let’s say a senator or a congressman who has put his political life on the line funding the space center hears that a major scandal is about to break. He calls up U.S. Attorney Gaynelle Jones and says, ‘What the hell are you doing?’” Schultz has no evidence that such a call was made. He’s merely relaying how he thinks it worked. Schultz says the U.S. Attorney’s Office lied to the FBI on several key issues, including a promise to prosecute two corporations. Instead, GE and Martin Marietta were allowed to pay a $1 million settlement without admitting guilt. “They bought their way out, plain and simple,” says the former head of the government fraud squad. “And they’ll just write it off to the next contract.”
Finally, Lightning Strike ruined the lives and careers of more than a dozen people and their families. Several defendants required psychiatric care, at least two contemplated suicide, and Dale Brown suffered a heart infection and had open-heart surgery. All feel betrayed by a government that they had served for years, and all have been barred from doing future government contract work. As confessed felons, they can’t vote or own firearms. All are on probation and many are under house arrest. Under the terms of their probation, the defendants can’t even talk to one another or compare notes.
Those who haven’t retired now labor at lesser jobs. Before Neal Jackson landed a job as a pilot for American International Airways, the Jacksons had lived for more than a year on their retirement fund and occasional flying jobs with the Air Force Reserve. Carter Alexander, who has a Ph.D. in physiology and was once a Distinguished Visiting Professor at the Air Force Academy, is a science teacher at Floresville High School. Brown is suing the government and all the corporations that cooperated with the government for $100 million. His partners at TerraSpace, who lost a $10 million contract because of Lightning Strike, are also suing.
In May, in defiance of their probation officers, a wretched group of Lightning Strike survivors met late one afternoon in the conference room at DeGuerin’s law office. This was the first time they had met face to face. One by one they stood and gave their names and a brief account of their ordeals. A few used the occasion to apologize to fellow aerospace professionals for ratting on them. All of them regretted that they had not demanded a jury trial. Having confessed to a crime, there is nothing to appeal. And yet the despair in their eyes was evidence that they understood the decision had been out of their hands from the beginning. “Once the FBI has you in their sights, you’re finished,” one of them observed, and the others nodded in agreement, almost before the words left his lips. “Even if you could beat the rap, you can’t beat the ride.”
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