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Laser Weapon Firm Targeted

by noahmax on May 23, 2005

It ain’t easy pinning down Ionatron Inc., the Tucson, Arizona laser weapon firm.
plasma_tank.jpgCompany execs say they’re working on a real-life ray gun which uses femtosecond lasers light pulses that last less than a ten-trillionth of a second to carve conductive channels of ionized oxygen in the air. Through these channels, Ionatron’s blaster supposedly sends man-made lighting bolts, frying anyone unfortunate enough to step into their path, up to 800 meters away.
The feds have given the company $12 million to chase these ray gun dreams. But good luck finding anyone in the Defense or Energy departments who will publicly endorse Ionatron’s ray gun work. Or even say they’re passingly familiar with it.
A couple of months ago, Ionatron gave me a couple of contacts in officialdom — guys who are supposedly teaming up with the Tucson firm on laser projects. When I tracked these folks down, they said they really didn’t know much about Ionatron at all.
Maybe Ionatron’s research is so super-secret that nobody in government will acknowledge its existence. But if the work is so secret, why does Ionatron keep bragging about it to the media?
The company’s latest press release shouts that Ionatron just been featured on the NBC Nightly News. In the statement, the company quotes Brig. Gen. Joseph Votel, head of the Pentagon’s Joint IED Defeat Task Force as telling NBC, “The Ionatron system was just the type of out of the box, new technology solution we’re looking for, quite honestly.“
Now, I haven’t seen the tape of the segment. But in the transcript, neither Gen. Votel nor the NBC reporter mentions Ionatron by name. Odd.
But there’s one media outlet where Ionatron’s name has been mentioned a whole lot, lately. That would be the New York Post, where business columnist Christopher Byron has been on a one-man jihad against the ray gun company. His most recent strike came last week, as he accused Senate Appropriations Committee chief Thad Cochran of steering millions in congressional discretionary funds Ionatron’s way in return for $9,000 in campaign contributions, and a promise to relocate to Cochran’s home state of Mississippi.
“Inside the Beltway, it’s business as usual,” Byron says of the alleged tit-for-tat (the story is buried in the Post’s pay-for-play archives). His other allegations go beyond the garden variety, however. Click here to read ‘em.


On May 9, he claimed that “accumulating evidence now suggests that at least some of the technology that Ionatron claims to possess may actually belong either to Waltham, Mass.-based Raytheon Co., which has been conducting its own government-funded ‘directed energy’ weapons research for years, or to a small California tech company rival called HSV Technologies, Inc., or perhaps to both.”

A review of e-mails, nondisclosure agreements, board memos, letters and other similar documents, all supplied by officials at HSV Technologies, appear to support the assertion of HSV’s president, Peter Schlesinger, that he and his board were hoodwinked by a Raytheon official named Joseph Hayden.
Specifically, Schlesinger claims that in early 2002 he was approached by Hayden with what purported to be an officially authorized partnership and licensing offer from Raytheon Co. — contingent, of course, on Raytheon first being permitted to review HSV’s own directed energy research efforts.
Three separate meetings followed at these meetings, Schlesinger says he and his colleagues provided the Raytheon people with an array of patented, confidential information regarding HSV’s own directed energy development work.
Unfortunately, says Schlesinger, at the third and final meeting of the two groups, which took place on May 31, 2002, at a Raytheon missile defense facility in San Diego, Calif., the HSV officials discovered that Hayden had apparently been secretly passing their information along to an outsider [Ionatron founder Robert] Howard.
Hayden, by the way, is now one of Howard’s employees at Ionatron.


But a sneaky approach to intellectual property isn’t Byron’s only beef with Howard. The Post columnist calls the Iontration founder “a twice-fined Wall Street stock promoter who agreed to pay $2.9 million in penalties in 1997 in settlement of a Securities and Exchange Commission suit charging him with making false and misleading statements about another company he founded and controlled, called Presstek, Inc.“
That’s one of the reasons, no doubt, that Byron has been so suspicious of Ionatron’s rises and dips on the penny stock market. As he noted on April 25:

Shares in a high-flying penny stock called Ionatron Inc. had been climbing for months [when] suddenly, on March 18, with Ionatron’s shares having climbed to a high of $10.41, the company’s stock was hit with an avalanche of insider selling, as more than 50 Wall Streeters privy to Ionatron’s innermost secrets bailed out of nearly every share of stock they held, knocking more than 30 percent off the price in the days that followed.
Another cautionary tale from the pump-and-dump annals of the penny stock market? In fact, it’s a lot more than that, for nearly every one of the more than four dozen insiders who dumped their Ionatron shares on March 18 have now been identified by The Post as employees of a secretive, Arlington, Va., investment group that is owned, operated and financed out of the black box budget of the U.S. Central Intelligence Agency.

Byron’s talking about In-Q-Tel, the non-profit investment arm of the CIA that put money into Ionatron when the company was young. In-Q-Tel officials heatedly denied that the firm was involved in any “pump-and-dump” schemes. And I’m inclined to agree. In-Q-Tel isn’t like other venture capital firms. It’s more like an incubator for spook-friendly technologies. Getting a big financial return on investment doesn’t seem to be a big motivation. And if making money isn’t that important, why bother with insider trading?
What seems more plausible is that In-Q-Tel’s employees, officially separated from their employer, may have been less scrupulous — in Byron’s words, “stag[ing] an end-run around In-Q-Tel’s not-for-profit legal status [to] benefit personally from the fund’s investments.”

They accomplished this by buying shares for themselves in a separate and parallel “for profit” entity called the “In-Q-Tel Employees Fund LLC.“
Using the cash contributions from the employees, the LLC thereupon took equity stakes on their behalf simultaneously in each of the three companies in which the not-for-profit fund was itself buying shares — an arrangement almost identical to the so-called “Raptor” partnerships through which top officials at Enron Corp were able to cash in personally on investment activities of the very company that employed them.

Byron only offers circumstantial evidence to support his claim; there’s no Enron-esque trail of damaging e-mails that he’s uncovered. Nevertheless, Ionatron officials wouldn’t comment on this or any of the allegations that Byron has leveled.
THERE’S MORE: In-Q-Tel spokesperson Gayle von Eckartsberg says Byrons allegations about the 85-person employee (and ex-employee) investment fund “are also false.”

Employees have no control over the selection of the investments, nor over the timing of the distribution of the equity or proceeds from the Fund… Participation by all employees is mandatory… Employees do not control how much equity is purchased, or when, nor can they opt out of participation in the Fund or in any of its investments. In other words, employees cannot cherry pick.

Besides, the few-million dollar kitty isn’t making anybody rich, von Eckartsberg notes. The largest share, about six percent, goes to In-Q-Tel CEO Gilman Louie. And he donates it all to charity.
But the cash is needed, she says, to “attract the talent we need to do our job.” Getting venture capitalists to do non-profit work isn’t easy. They need some incentive that there will be some kind of payoff down the road. But so far, that hadn’t happened, von Eckartsberg observes. “To date, employees have put in more than they have received from the Fund.”

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