The Embargo is Coming
NOTE: The use of exact dates in this chapter is to allow any reader that can use my document files to follow the story in more detail.
Between the 16th and 21st of July 1984 I made a sales trip to Taiwan in an attempt to sell a vacuum melting induction furnace. I almost blew this one because my plate was too full with the problems in Scotland.
I started to supervise the installation at the customer's factory north of Moscow in late July 1984. Marchin picked me up at the Leningrad Hotel early on Monday morning as agreed during a telephone conversation. The transportation was an old van from the motor pool that spit and sputtered during the two hour drive to the factory. Marchin told me that he would get a better van soon, and that we would depart the hotel earlier to avoid the morning traffic rush. He had a young female translator with him that would be assigned to me for the duration of the project. She had been teaching him English, and I detected a small affair had developed between the two.
I had been on this road several times before, but always in the winter when snow covered the fields. This time the birch trees were in full leaf and the vegetation was a rich green. The translator told me that particular woods were full of the best wild mushrooms in the whole world. She pointed out a high tower that housed the radio transmitter during the Great Patriotic War. We departed the main road just before we reached the historic town of Zagorsk and continued to the little country village of Khotkovo. This was the first time I had a chance to look around the facility, and get a taste for what was being produced there.
The first thing I noted was that place did not have any of the cement apartment buildings as residences. Individual houses were served by a central well where water was raised in a bucket attached to a rope. The factory was very old and was constructed with concrete roof truces. The high bays between cement columns will full of small glass windows. There was a low wire fence around the grounds and a grandmother lady sat in a small wooden guard post at the gate. She recognized the van and let down a small chain so he could drive into the grounds. There were very few vehicles in the parking lots. The sign over the door was in Russian. I had learned how to decipher Russian into the Latin alphabet, and it read "Electrolit." There was a slight resin smell in the air that I recognized the phenolic resin board Consarc machined to use as electric insulating parts.
Marchin had no staff at this location, but the construction boss met in the office he was preparing for himself and future staff. He had installed the transfer car we shipped in March and was well on the way to completion of the chambers and other items we shipped in May.
They had not decided where to locate the isopress equipment and the construction group did not have a contract for this work. I was saved again because not a single question about the isopress came up during this visit.
There were no direct flights from Moscow to Glasgow, so it was necessary to fly an additional 500 miles south to London in order to wait for a plane to fly 500 miles north. It was tourist season and all the seats in the back of the airplane were sold. As a familiar customer, I was allowed to ride first class. While sipping good Scotch whisky I realized that Valerie was the real boss, and he did not know it.
Vera invited Valerie to have dinner in our house the evening I arrived from Moscow. She had roughly translated the letter from Marchin, and the instructions were to find a fix for his construction problem. I had other more important things on my mind.
During dinner after Valerie and I had a few shots of Russian vodka. Vera asked him to forget politics and the dammed rules and do something good for his project and his country. I told him he was the only hope I had to finish this project.
Valerie, with the help of his sidekick Sasha, prepared a technical report that demanded the purchase of the retort furnaces and with their technical agreement on the way I wanted to horse trade items so they could have these furnaces within the money allotted in the contract. They had broken a major rule that required all communications to pass through the buyer. This report was hand-carried to the Marchin in Russia three days later on 8 August 1984.
Marchin met me at the airport with the news that our friend Alex has suffered a massive stroke and was completely paralyzed on his right side. Marchin and the construction boss were pleased that we had agreed to fix their mistake, so no formal report would need to be written and therefore no heads would roll. I noted they had painted the place and were putting ceramic tile on the floors and eight feet up the wall. I had designed this facility to handle carbon dust by calling for a generous slope on the floor so water would run to a central point. This would allow the operators to wash down and keep the floor wet. The carbon fibers that would be in the dust would be valuable and a filter system was installed to recover them. We paid no attention to this in our rush to build the carbon facility in Scotland.
The next trip I took three men to supervise the installation and start up of the equipment already delivered. They were given rooms in the Leningrad Hotel and a newer van picked us at seven. The translator now had work to do and many questions to answer, since these men had never been to Russia.
Marchin introduced me to his new engineering manager that had just started that morning. He was very pleased that we had the documentation in order. The office and drafting equipment was in place. This drawing office was filled with items to solve problems I had experienced in the past. Part of the order was file drawers, and in these drawers were all the reproducible drawings for the project. A blueprint machine and paper was among the items supplied. One of the service men was a draftsman and could revise drawings as needed to correct minor problems. That meant the official document was always up to date.
Valerie's document was processed and a very short meeting was held with the buyers. An amendment was signed on August 4, 1984. A plasma power supply was the item added that enticed the buyers to extend the delivery date until October 1984. The retorts were approved and number ten furnace was removed. All was clear for the British grants, and the scope of supply and technical solutions for the furnaces was clear in my mind. The buyer's ability to collect a ten- percent penalty for late delivery was postponed, but I still had a problem with the isopress.
Marchin introduced me to the engineer that he had put in charge of the isopress in Moscow. He was a pain in the neck. His education level was high but his practical knowledge was nil. He was set on getting the most out of Consarc and saw that we were in deep trouble with the argon reclamation system. I lost all contact with Marchin, because he was tied up in ecology and safety meetings with Soviet bureaucrats. He had to be reporting to a boss somewhere, but I could not find out where and who it was.
I decided to let this greedy technician hang himself with a change to the contract. Protocol number 8 was signed on August 14,1984 to provide the basis of a future change in the contract if and when it became necessary.
3. The Sellers and the representatives of the Buyers considered the working process in the press and stated the following:
The representatives of the Buyer informed the Seller that the use of an open pitch container might be required by the process in the press. According to the terms of the contract the Seller will provide the safe operation of the equipment during the working process in the press chamber. The Buyer intends to use both open and closed pitch containers.
The isopress supplied by the Seller are not designed to use open containers and gas evolved from the pitch may have a corrosive on the seals and power elements of the isopress. The Seller should keep the press safe when the open pitch container is used.
4. The Seller agrees with the Buyer's requirements and undertakes to supply, without charge, nickel base retorts and a system of gas balancing inside and outside the retorts. The Seller will test the above mentioned equipment in his press, and supply it without charge prior to the scheduled start up of the press hot tests at the Buyer's works.
The 1995 FMI trial transcripts give details on how this system worked. It now appears that the Soviets knew what FMI was doing. It could have been from published literature but more likely it came from the French.
This was the first time that I understood how they were going to use this system. The document was not a contract, because the strict terms of the contract made it clear that any and all agreements had to be cleared by Ivanov as an amendment. This document defined a process that was not in the body of the contract. To fulfill it would require that I break American technical data export rules. I had the paperwork to guarantee an embargo. I began a one-man conspiracy to get out of a technical problem to which I had no possible solution.
The decision to make the inside diameter of the forging 33.5 inches was based upon a working zone 29.5 inches in diameter. This decision left us two inches for the heater and insulation. We needed at least one-half inch to put in and remove the load so as not to damage the heater. This left us with one and one half inches, which was just not enough. Another inch would have added 880 tons of load to the forging and the yoke at the required test pressure. The decision had been made for economic reasons at the beginning but now it was biting my tail.
American companies were producing filament wound carbon products up to 33 inches in diameter both solid and hollow. By the summer of 1984 it was not even a guarded secret that the use of this size carbon part was for the MX missile. My contract was to process parts up to twenty inches. Somebody in the Soviet Union wanted something for nothing to match American's largest sizes.
Their greed meant that they were not going to get anything.
From the very beginning this customer was interested in products about twenty inches in diameter. This fit with my understanding that they had an interest in producing aircraft breaks for aircraft for their new Airbus. My argument was that a cook could not prepare a roast or a turkey if the meat was within one-half inch of the element. In the end they were going to lose this battle because the isopress bodies were done and ready to ship.
The contract required cleaning of the argon used to pressurize this process to original purity so it could be reused. We were allowed to use only forty cubic feet of argon gas per cycle. This now became a physical impossibility with a large container of dirty pitch. We had just signed a major technical change, and while I was agreeing to a sealed retort the change in the gas cleaning could cost us several millions. The technicians still were not ready to define the load and the chemistry of the pitch, due to their internal security rules. I would need that signed document tied to a carbon-carbon test in Scotland before I could use US law to stop the project at the right time.
My mind was working overtime to solve the isopress problem. A perfect solution came to me on the flight out of Moscow. We could build an isopress within the isopress and solve the problems by avoiding them. The customer would have to accept a smaller part than he wanted. He would have to accept a temperature of 900 degrees C. He would have to accept a slower heat and cool down time. They could use a closed pitch container with poor quality pitch. He could use argon in much smaller quantities, and my argon cleaning headaches would be over.
Production of carbon parts for the Soviet project was near a standstill when I returned to Scotland. Calcarb rigid insulation is easy to produce if every step is carried out properly.
From time to time we made excellent quality. Then we would run into a rash of cracking of the product. We needed quality control and did not have a staff experienced with process control. I knew the problems would be solved if we kept up the effort but my plate was too full with other problems and obligations to give this project the attention it needed.
We had to take advantage of the technical change; so on August 28, 1984 the following Telex was sent to the Buyers.
Consarc has studied the impact of the engineering protocol dated 14 August 1984 which requires the use of open container pitch processing and the requirement for processing up to 300 Kg each run of the isopress.
We had not provided for open container operation and the weight of pitch is twenty times more than we planned in our filter system.
The spirit of the contract requires that we furnish equipment that functions to the required parameters when the process is in operation and therefore we have agreed to install a metal muffle and a heating system in our isopress for our use and testing. We have also agreed to supply you two of these systems for your equipment prior to final hot testing at the site.
We have not completed the study of filtering of large quantities of coal tar and sulfur that can be vaporized from an open container with up to 300 Kg of pitch.
Upon completion of the engineering study we will submit details for your technical specialists so they can assist us to determine the correct size of any additional filters or cold traps which could be used by the process. Any changes to the contract will be agreed with the Buyers prior to proceeding.
We are waiting for the results of the present dock closures prior to moving the next shipment to the docks. We are hopeful that the ship can be loaded in Glasgow on 16 September 1984, as you have planned.
I had Ivanov where I wanted him for the next stage of contract negotiations, and he was not taking it sitting down.
10 September 1984
Attn. Mr. J. Metcalf
We are compelled to state that we cannot agree with your point of view regarding problems raised by you which are connected with the filtering system of coal tar stop output of this system are determined by sizes of container working zone stipulated by the contract therefore we do not find it necessary to discuss with our specialists the mentioned problems which are integral part of your project and responsibility under contract stop
I zipped a Telex right back just after the machine stopped typing the incoming Telex. I had already prepared an answer to their position that I knew they would take. Normally their system takes several days to formulate a reply. I had to win this argument.
10 September 1984
Attention: Mr. Ivanov
Our Telex did not state a point of view but rather a technical fact of the planned method of operation of the isopress heater and the projected volume of coal tars and other corrosive gases which will come from the process. This differs from the design data on which we based the scope of supply of the gas recovery system.
In order to achieve the desired results with open container operation we must alter the heater and add a muffle to the isopress interior. We also must alter the scope of supply of the gas regeneration system to trap the coal tars.
Your inspectors will not release the absorbers nor heat exchangers of the gas recovery system since it is a technical fact that they are not suited for the volumes of tars now contemplated by the latest technical protocol.
We intend to complete the task as defined by the letter and spirit of the contract. We do require technical and commercial agreements which allow us to alter the scope of supply and delivery of the necessary equipment.
I plan to arrive Sunday, 14 September, to inspect the site. I must depart Friday 21 September, for important technical meetings in the U.S.A. regarding this project.
The inspectors in Scotland had a belly laugh at these Telex exchanges. They knew the business about 300 kg pitch and open containers was an attempt to put pressure on me for other purposes. They were looking forward to being joined by their families in Scotland after their first year abroad, as allowed by Soviet rules. They foresaw at least one more year before Consarc could have its isopress working and final results obtained.
We moved men in and out of the project in Russia based upon the needs in Scotland and the project in Russia. Ivanov was upset with the number of trips and short stays of our engineers at the site. The contract provided that the Buyers pay for airline tickets. He sent a Telex requesting we agree that my trips were sales related and Consarc would pay for my tickets. I ignored the request and replied that we could not get a reservation on Aeroflot and he would have to pay for my ticket on British airways. He replied that we must use Aeroflot as spelled out in the contract. I did not want to pay for my hotel and living expenses and I was providing an engineering service. We were burning up the allotted contractual days in a hurry and he would have to order more.
Vera and I attended a conference of superalloy producers in late September 1984 on Hilton Head Island. This affair was arranged by Consarc and had become the venue for an informal gathering of the world's producers of superalloys. Dan Hensley attended this meeting along with his wife. Dan was very unhappy with the Calcarb situation. He could not convince Roberts to spend the money to set up a machine shop for the product in Knoxville and every piece of product he had obtained from Scotland had failed customer inspection. He agreed to return to Scotland long enough to get us out of our technical difficulties.
My main duty at this gathering was to entertain customers and to sell the Japanese on our newly patented gas purge process. Roberts and I had very little time to discuss the problems in Scotland but did go over the high points. He was not aware that Hensley was dissatisfied with his position.
Roberts told me that the FBI wanted me to call them and the number was written on his desk calendar in Rancocas. I did not find the number when we stopped in Rancocas that trip. I assumed they could find me if they really wanted to talk with me. I had been in contact with the FBI and CIA several hundred times since 1973 and assumed this contact was more of the same.
I was aware at the time that personnel from Fiber Materials had been in contact with the American intelligence community to give them the detail sizes of the furnaces and isopresses. Consarc was not hiding any facts from the government so this did not give me cause for concern. I was prepared and hoping for a change in the rules which would allow me to get out of the technical problems.
We received a letter from the Department of Trade and Industry on 26 September 1984 which approved a shipment of a facility to make single crystal turbine blades. This furnace was single purpose and was "specially designed for turbine blades." The letter had an interesting note on "know-how."
I can now confirm that the equipment, a standard general purpose vacuum induction melting and casting furnace complete with mold heating stations and controlled mold withdrawal system incorporation symax 'Square D' model 300 programmable controller with PROM memory is not embargoed under current restrictions and does not require an export license under the present UK regulations.
The above advice is only applicable providing all the conditions laid down in items a, b and c are fully complied with and that there will be no transfer of technical 'know-how' and no final guaranteed quality of the metal casting.
The conditions were that the controller be physically built into the panel so no host computer could operate the controller. The British civil servants were not dummies and knew exactly what they were approving on a technical basis. In my mind the selling of this furnace with the controller would be much more important to national security than anything we had sold Russia in the past.
US members of CoCom, at the insistence of the Pentagon, were pushing hard to change regulations. Their visible target in the news was electronics.
American security had become worried that toy makers were using quality chips and that a visiting Russian might buy such a toy to take home to his child. Control of open market items was a farce. The Soviets already had a back door supply of quality electronic parts from the Far East.
Calcarb production was still going downhill, but at least the Scots were installing the retorts so we could cook more rayon fiber of better quality. I returned to Moscow for meetings between 14 October and 20 October 1984 to meet with the isopress geniuses. I forced them into defining the chemistry of the pitch before and after the process in order to define the amount of gas. I also made them define the heating cycle, including temperature and time. They wrote down and accepted my quick solution for the necessary equipment to solve their problem.
The inspectors in Scotland were not isopress experts, but they realized that the starting chemistry of the pitch was something they would never use. They told me that if the final chemistry was correct and the time temperature cycles were correct, these people would be sent to prison for giving away technology to the West.
On October 27,1984 I used a round-the-world ticket to Taiwan as the first leg of the journey to assist in the sale of a vacuum-melting furnace. Raufer and Roberts were already in Taiwan for the effort. My mood was poor and we almost lost the job. Raufer took us to an expensive restaurant in downtown Taipei. This place served yellow carp and we were able to pick our meal from the water that formed a mote around the dining hall.
I read an interesting article in the International Tribune on my way back to Taiwan. The paper reported the release of The Military Critical Technologies List by Perle from the Pentagon. I asked Robert's secretary in Rancocas to obtain a copy. They asked how I knew about this because it was secret.
This trip also required me to be in Rancocas for the shareholders meeting. I was not able to wait until Rowan returned to town. A full report of our problems in Scotland was given to Roberts. I told him that we had no chance of making deliveries and being able to invoice before year end. I also went over the problems with the carbon operation and the fact that Hensley was not satisfied or effective in his role as the brains of Calcarb. Roberts showed me the phone number written on his desk pad, not on the calendar pad where I had looked in September. He said the FBI was pissed because I had not returned their call. My comment was that they knew how to dial Scotland.
I called the number and recognized that this was the field office of the CIA. They wanted details on the Consarc project being built in Scotland for the Russians. I outlined the project as best I could on the phone and invited the CIA to visit me in Scotland to go over the whole project. They asked me about end use and I said that I did not know for sure but it could be leading edges or nose cones, among many thousands of other items. They asked me about carbon-carbon, and I told them that we were showing the Russians how to make carbon-carbon rigid fiberboard in sizes and shapes that constituted a whole new technology. I was ready for any rule changes the governments wanted to make and was not hiding a single detail.
The board held their meeting in November 30, 1984. Raufer was elected as VP of Sales and Marino was elected as VP of operations. Raufer was an excellent engineer and knew the product line completely. His skills with the English language were nearly perfect, but he did not have the killer instinct to close jobs with high profits. He was an engineer not a peddler. Rowan voted no on Marino but allowed the minority vote to overrule him. Roberts reported that Consarc had a small loss on year to date activities. The following are notes on the Soviet job were recorded at that meeting.
"Mr. Roberts reported on the status of the U.S.S.R. carbon project equipment presently being manufactured in our Scottish facility. Whether the steel pitch containers must be sealed or not has not been resolved and the difference affects the type and amount of gas to be cleaned, plus construction of the isopress itself. Present indications are that the isopress can be completed end December. Delays in completing this contract impact Consarc Engineering Ltd. financial statements severely, resulting in a pretax loss of $94,000 instead of the $2.15 million profit for the year to date.
The Board also noted that the Royal Bank of Scotland wanted Consarc guarantees and that Consarc had agreed to give them."
I decided to make my position clear. There was no way it would be technically possible to recover the argon and only lose one standard bottle per run with this many impurities. I had won my battle with the carbon heater and now needed relief on the argon cleaning system.
I had to set up Ivanov for the next change in the contract, due to new technical agreements.
9 November 1984
Unfortunately technical laws of diminishing returns dictate that more than one bottle of argon (with the impurities from 300 Kg of pitch) will be captured (losses) in the molecular sieves used to remove impurities to normal bottle levels. In addition the present solution envisioned by protocol No. 9 requires large quantities of oxygen to oxidize the impurities and hydrogen to regenerate the de-oxidizer.
Materials of construction, which can be used for the sealed container so it can be opened and closed in a practical manner, will limit the temperature to approximately 800 degrees C.
The muffle heater and insulation system presently installed in our isopress is adequate for the development of the internal container which will separate the impure gas from the bulk of the argon which will be cleaned and recycled.
It was normal for the Buyers to sit in on all technical discussions that led to signed agreements. This buyer was lazy and never attended technical meetings that took place in Moscow between 11November and 17 November 1884. I had a document that was not signed in the presence of the buyers but that could be used for the pending amendment #5.
Defining the chemistry of the pitch, and the quantity, gave me an opening. The cleaning system would use oxygen to burn the hydrogen in the pitch to water. This would mean that they would have to haul in twenty times more gas than they were saving.
By this time there was no hope of obtaining thin wall reactions zones and a lightweight roof due to our inability to produce them even with help from the so-called carbon experts from Russia. The only hope was to produce the Calcarb cylinders and somehow seal them with something in Russia.
I offered to replace the plasma adaptation with equipment to produce the carbon parts they needed at their factory in Moscow. This offer up as a win-win situation. The prices of the individual items were set high enough to allow Calcarb to have enough grant money based on selling prices to have its equipment for free. The customer was getting his future spare parts problem solved. In reality it was quite a bargain for the customer and the offer was made to get partial payments. The customer really did not know what to do with the plasma power supply and it would probably only have gathered dust in the future.
We completed a cheap metal muffle to test the system of heating in the isopress. There was not enough room left for side wall heating so we constructed a simple bottom heater that looked and functioned like the electric element on a kitchen stove. The heating part was OK, and since we had only one temperature sensor the uniformity had to be right. With three hundred pounds of graphite in the muffle and 1500-psi we could not cool it down fast enough to meet the specifications.
Dick had extensive contacts with the Minister of Defense in the UK and they had already made a full inspection of our facilities. Dick told me he had invited this group of engineers to sell them on our capability. When they asked to be lifted up inside the furnace to inspect the miniseptor I knew it was more than a general view of our capability.
Tarlton headed a surprise inspection by British Customs and Excise on November 28, 1984. His group is akin to our project Exodus. They have the power and authority to close a company's doors if anything is wrong. I had to go to my apartment to fix a water leak. This was a chance to get away and compose myself because, I was extremely nervous.
They suspected that we had imported equipment for the Cameron Iron job with computers and transshipped it to the Soviet Union. When this proved to be incorrect and they saw the documents of approval for the carbon sale from the British government their tone changed. They collected drawings and copies of documents, including the contract and changes. They took cross section drawings of the furnace. This drawing was shown on ABC News three years later with the statement that the plan for a factory had been smuggled out or Russia.
I told Tarlton that our technology was schoolboy stuff but that fibrous carbon structures that could be produced in the equipment had aerospace and military uses. They asked us not to ship any more until they got back to us.
I attempted to use the customs visit to convince Valerie that the project would be embargoed so he should release the job quickly. We needed cash in a hurry to keep the wolves from our door. I had to set up Ivanov for the next change in the contract to conform to reality.
30 November 1984
Attention: Mr. Ivanov
We have booked two forty foot containers for ship "Mekhanik Evgrafov" receiving cargo at Hull 17-19 December and sailing for Leningrad on or around 28 December 1984, to ship insulation, graphite parts and heater as required for the next phase of construction.
In the isopress we have now achieved a heating rate of 950 degrees C in less than two hours with a metallic muffle in place.
We have asked your inspectors for their concurrence to increase the surface area of the heater by 15 percent manufacture and prepare for immediate delivery. They have informed us they have no authority to release such a heater unless they receive written authority from Machino.
Our offer to replace item 2.7 with equipment and technology for reaction zone parts was based in part on receiving funds 30 days after the last shipment in October 1984. As you are now aware these funds were not received and we were required to make other financial arrangements so we must regretfully withdraw our offer for the Calcarb technology under terms previously offered.
Since your inspectors have no authority to sign release documents and no further heating tests are scheduled this year, we suggest they return home.
The British did what we had expected after the customs inspection.
P R I O R I T Y
To: TR Dick Consarc
From: Dept. of Trade and Industry
Serial No. 5205 of 3 December 1984
From P M S Corley
This is to confirm our telephone conversation of today's date that there is no export licensing objection to the shipment of the final consignment under your contract 50-0166/24481 with the USSR. H.M. Customs have been informed.
Shipments in excess of 1 million pounds were completed in December.
I called Roberts to discuss the new situation. I told him that I was attempting to sell a larger furnace of the same type, so the customer could produce the susceptor assembly in one piece. Valerie understood that he would need hundred's of these susceptors over the years because they would be destroyed in use from time to time. He had observed that our susceptor had failed three times in the last ten months, and was very receptive to purchasing the larger unit. Roberts was not hearing me because he was angry that the product Calcarb was shipping to Rancocas was failing and he was losing profits. He wanted to buy a company in the electron beam business, and Marino wanted a new central computer with software based on the Boeing system. My mind was not on those things.
The request for an export ruling on shipment of the larger furnace was sent to the DTI on 6 December 1984. They answered our request for licensing advice for the larger furnaces on 10 December 1984. They noted a change in the law that had come into effect on 6 June 1984 to cover carbon composites, and promised to get back to us after they had studied the matter. The tone of the letter was that we would not be allowed to sell a larger furnace. This confirmed my July opinion that the rules could have been used to stop this sale much earlier but the British government wanted us to finish the contract.
I told Valerie to forget about the larger furnace, and sign shipping releases for all the remaining equipment. I suggested he could easily do the job of sealing of the reaction zones in his factory. He knew it could be done because Mother Nature provides the method. The vacuum pumps provided the vacuum and they had the methane. He told me that natural gas lines did not serve the country area where the factory was located. He though it would take a decade for the Soviet system to install the lines. I offered a quick and workable solution. The Soviet Union had plenty of calcium carbide, and when mixed with water makes acetylene, which would provide the carbon in gas form.
Vera was my secret weapon. She could pry open the minds of the inspectors and let me peek inside. There had built excitement in the hearts and minds of the three Russians in Bellshill. Their families would be coming soon and she had already helped them find apartments. As a group these men would never open up, so Vera started a method to allow me to talk with them individually. Once each week she would invite one of them to dinner and an American movie that I would play from the VCR.
The fact of no methane at the factory had destroyed my understanding of what they were attempting to do. I asked Vera to arrange a dinner for Valerie with the offer to show a comic movie. Vera prepared a meal using tasty items she had purchased in Moscow during her last trip. She put two bottles of good Russian vodka on the table. I had no time for chitchat and there was to be no movie. I needed to understand some things and I needed to do it quickly.
Valerie could face a prison sentence or the death penalty if he released Soviet military secrets. It was my good fortune that he had no military secrets. He told me that the simple retort furnaces that were bottom loaded and fitted with a fast cool down system would accomplish all the work of his original task. The plasma furnace offered to him had sparked another interest. He wanted to do coatings using metal chlorides in gas form to deposit metal on the surface of carbon parts to keep them from eroding. A moving train subjected the hot carbon contact to fast flowing wet air and the result was water gas. He was hoping to find a solution.
He told me that he had no idea where he could use an isopress in his plans. He agreed that the young graduate Marchin hired for this task was a moron. He agreed that I should twist his tail because he lied me about the amount of pitch. Valerie wanted to produce Calcarb insulation in Russia for his future needs, and promised me to get me out of the isopress problems if I would agree to supply the equipment to produce insulation.
The Soviet inspectors did not believe my sad story about the pending embargo. Events in history turn on small needs and details. They wanted to see their wives and families. The rules for traveling abroad allowed them to bring their families for the second year of their foreign duty. They were sure it would take at least one more year for Consarc to get the job done.
Two things happened to assist me in the conclusion of the contract.
First, the Soviet system refused the inspectors' families travel permission.
Second, a little known Soviet trade official was on a visit to the United Kingdom. His name was Gorbachev and his wife was caught on British television using an American Express card to buy a diamond and fur coat at Harrods in London.
At that time Muscovites were having a hard time buying consumer goods. Vera and the inspectors had a short mutiny meeting. Valerie signed off on the whole job and asked for reservations home. At the last moment Machinoimport changed their mind on the heater for the isopress and on December 14 refused to OK the shipment. I sent a return telex agreeing to ship later but with the understanding that could not be a reason to collect a late penalty nor to change our request for immediate funds. The inspectors took an Aeroflot flight from London to Moscow on December 15, 1984.
On December 15, 1984 Margaret Thatcher gave a press interview to the BBC standing beside Mikhail Gorbachev, a high ranking Soviet trade official from the Kremlin. They were on the front steps of John Brown Engineering, a company that had manufactured shiploads of compressors to American designs. This was symbolic of Thatcher's successful defeat of Reagan's attempt to stop trade on the Soviet pipeline. In a very happy tone Maggie said, "I like him. This is a man I can do business with." Her final words reflecting her win over Reagan were, "In Britain a contract is a contract."
The British newspapers reported on the John Brown meeting with very positive remarks about trade and future arms limitation talks. John Brown's management told the press that Gorbachev told him that he was "pleased that we had stuck with our contractual obligations."
Vera and I left for Moscow on December 16, 1984 while Gorbachev was still in Great Britain. I had a huge task to perform. We needed cash to keep Scotland afloat and it was clear that an embargo was right around the corner. I arrived at the factory and the grandmother guard let down the dog chain. The parking lot was empty because the construction boss had taken his crew to another job. The main bodies and handling devices for the isopresses were in place. I noticed that the walls were still the old glass windows and the columns and crane rails were made of cement. A sudden release of gas from a failed isopress would bring this building down on our heads. Marchin told me Valerie and the other staff was going to rest until after the New Year so Vera and I could enjoy the holiday because there was nothing to do at the factory moment.
Thatcher departed on a trip to Peking China on December 18 to work out details of the Hong Kong turn over. She visited Hong Kong on December 20 and arrived in Washington for talks with Reagan on December 21. I could speculate that they discussed the export controls that Thatcher was planning on Consarc sales.
The subject of this moment in history was Star Wars. Reagan had just settled into his second term and Dole was going to be the majority leader of the Senate. The house was still controlled by liberal Democrats and the Republicans were telling Reagan that the consensus that allowed him the major military budget was gone. Dole stated publicly that Weinberger's request for even more spending would not be allowed. Dole was going to meet with him later in the week to "tell him flat out that he does not have the votes."
Perle has not officially released the "Military Critical Technology List" which outlined items the USA wanted controlled by CoCom. A meeting of CoCom had just concluded in London where it appears Consarc's sale of an isopress and heating equipment were discussed.
Ivanov was confused by the documents that supported Amendment #5. He understood the partially delivered equipment was useless without the balance and accepted my statement that export laws would be changed in the near future. He did not trust that I alone could sign a contract change that obligated Consarc in such a major way. I had not signed any contract document up to that point, so Ivanov sent a Telex to Wilson asking if I had authority to sign the powerful amendment #5.
Telex December 22, 1984
METCALF IS BOTH A DIRECTOR AND OFFICER OF CONSARC, AND CONSARC ENGINEERING, AND HAS THE AUTHORITY TO COMPILE AND SIGN ON BEHALF OF THE COMPANIES.
THEREFORE HE, USING HIS BEST COMMERCIAL JUDGMENT, HAS FULL AUTHORITY TO SIGN AGREEMENT NUMBER 5 FOR CONSARC ENGINEERING.
Ivanov had always dealt with salespeople who could talk a lot without authority to bind the company. He apologized that he did not know I was a director of the parent company. He also joked a little when he said that officers were also gentlemen. The buyers wrote the draft of the proposed change to include a statement that we were late in delivery, which meant he could deduct ten percent from the contract. My argument was that the new technical requirements meant we should have more time and money.
I agreed to supply the mixing and molding station to produce carbon insulation using their furnaces to complete the task. In exchange for another item I took back the plasma furnace that we had not built.
The amendment also stipulated that we would return the partial payment if the tests were not successful. They did not intend to pay us another cent until they saw the results of those tests. They also intended to deduct the ten- percent penalty from the contract as a hammer to force us to do other things. I gave them a written guarantee that bound Consarc USA to return the 1.2 million pounds if the UK did not perform. Amendment #5 was modified for signing on Christmas but it was dated December 20,1984. Roberts did not believe we had to return the deposit after we were embargoed.
They agreed to wire the 1.2 million pounds before the New Year. Our short range problems were solved, but as in Gone with the Wind it became a tomorrow problem.
Gorbachev cut his trip short to attend the funeral of Soviet military boss Marshall Ustinov. The Soviets were signaling that they were going to be flexible in the arms limitation talks scheduled for early January 1985. President Cherneko had been held in check by Ustinov in his efforts to somehow slow down the stupid arms race. This single general with his control of the military could have blocked Gorbachev's rise to power.
Changes in the technical data laws in late 1984 allowed Americans to pass technical information to people with Green Card status. Now I would no longer worry if I talked with Vera in my sleep. These same changes allowed general technical and engineering data to be freely exported. The regulations had new rules for carbon-carbon technical data. The technical data required to perform amendment #5 would have to be cleared in Washington by our regulators and they would refuse permission.
Cherneko knew that Reagan was going to ease up on the arms race that had put the Soviet treasury in bankruptcy. The war in Afghanistan that had been going on since Christmas 1979 was costing the Soviets in lives and treasury. The US had spent a bundle of money supporting freedom fighters in Afghanistan including a little known Saudi individual with the name, Sheikh Usamah Bin-Muhammad Bin-Ladin. Members of Congress were trying to reign in this secret CIA budget.
Reagan was trying to stop some exports and Cherneko was stopping imports. Something new was in Moscow called unemployment. The demographics for the social security system had reached the critical mass. For every productive worker there was non productive bureaucrat or a person on pension. The ministries were letting the excess people find other jobs. Among the first to reduce staff was the local arm of the KGB.
Without Alex I could no longer meet in private with Marchin or Valerie. Vera introduced me to Yuri. His previous job was to keep up with people like Vera and me. He told her that they had not been following us for several years because we were not a threat to the system. He told Vera that the people following were CIA or MI6. He offered his help to allow me to again meet customers in private. He really was looking for a secure job but in the end was not able to perform.
We had a pleasant New Years celebration at the home of one of Vera's friends. For the next week we remained in Moscow without any work to do. I had two open projects pending with Metallurgimport and because I had know these buyers a long time and there was no reason to go behind their back. One project was for a small vacuum melting furnace that would be built and tested in Scotland and the other was for equipment for hardening tool steel. All the details of these contracts were agreed and the only remaining item was the price that would be agreed when Wilson and I returned. They told me that more than half of their staff was dismissed as of the New Year.
We departed Moscow on January 16, 1985 to return to Scotland. I had documents in my case that would stop the project at the correct time.
This chapter is a complex story of the changing political times.