Los Alamos, February 1, 2017
MC: Molly Cernicek; SH: Sig Hecker; PW: Paul White; AK: Alla Kassianova
AK: Molly, thank you for seeing us; we hope to hear stories about your Russian experiences over the years, both as a part of the lab-to-lab, and also as an entrepreneur with your own joint ventures in Russia.
MC: To start at the beginning, the first time I met a Soviet or Russian scientist, I was four years old in 1969. I vividly remember it, because my dad was translating for Russian scientists visiting Los Alamos National Laboratory. He had brought four Russians to dinner. I think they were some of Max Fowler’s counterparts. Of course, they spoke only Russian. After, I asked my dad, what did they talk about? He said, they're all supposedly scientists, but it's clear that at least 2 of them are KGB agents; and, I'm not sure about the third one. One of the big conversations had been about the grocery store that my dad took them to before dinner. The Russians got in a huge discussion about the propaganda of the store. One of them explained to the others that propaganda goes on in Los Alamos when they know Russians are going to visit. They move food from all over New Mexico to Los Alamos to impress Russian visitors as normally it is very unusual to see all of this food in one place. So don't be impressed. That same conversation was eventually repeated when my dad's cousin from Czechoslovakia finally was able to visit in the late 80s, and she said the exact same thing. Where did this food come from? There's no way all this food could be in one store. This is propaganda.
AK: And your dad, was he a professional interpreter?
MC: He had worked as an interpreter to the Chief of Police in the Naples, IT refugee camp after World War II in Naples, IT. That camp held over 60,000 refugees, mostly from Eastern Europe, so there were always fights and issues especially with the refugees from Yugoslavia. At the Lab, he worked mostly as part-time translator for the Lab, but interpreted when needed. His day job was a high school language teacher. He was recruited by the superintendent of the Los Alamos Schools to start the foreign language program for the school system in 1957.
AK: So it was French and Russian that he spoke?
MC: French, Russian and 16 other languages, mostly Slavic and romance languages. He was a student in a classical language school in Moravia, Czechoslovakia when the Nazis took over his school in 1939 when they occupied the rest of Czechoslovakia. All of his classmates were sent to a work camp. During the next several years, he had to rely on his language skills to survive. Many years later, he received a Ph.D. in Linguistics from Georgetown.
My second big interaction with the Soviet Union occurred when I took a trip after working a few years as a graduate research assistant at Los Alamos’ Center for Nuclear Security Studies. I worked for Louie Rosen, who had been part of the Manhattan project. His office was “outside of the fence” and I was uncleared. We put together this conference called “Technology-based Confidence-building: Energy and Environment.” We invited 165 scientists from 13 countries who were experts in natural and social sciences from around the world to discuss planet threats and sustainability. The conference occurred July 9-14, 1989. In June that year, China had cracked down on protestors in Tiananmen Square. The Soviet Union had become really nervous about sending anyone to the conference, so we expected not to have any participation from China or the Soviet Union. It turned out that Sergei Kapitsa, a well-known physicist who hosted a television show on science in Russia and who’s father had won a Nobel prize in Physics, knew how to manipulate the travel system from within the Soviet Union. He was able to get airline tickets for five Russians including himself to fly to the US for this conference. At the last minute, three or four Chinese scientists managed to attend as well. I remember Hans Blix was one of the representatives from IAEA. Peter Haas, Thomas Malone, Glenn Schweitzer, William Kellogg, Congressman George Brown (CA) and Senator Pete Domenici (NM) were some of many who presented. It was a casual, relaxed environment at Santa Fe’s St. John’s College campus, discussing challenges caused by increasing population and stress on the planet and ways to approach solutions to these daunting problems impacting the environment. Everyone stayed in the dorms. The conference was a huge success as it was truly an attempt to facilitate global scientific cooperation to solve major issues of sustainability. But, for Sergei Kapitsa, getting his team home proved to be a significant challenge. The group could only get as far as New York City. There were no return tickets available from New York to Moscow. It was a big deal because that was back when Soviet Union had about 200 international phone lines, making it extremely hard to contact them and vice versa. I remember I would be up in our division office (the only office in the division where there was a fax machine) resending the same letter requesting help dozens of times a day to Moscow on behalf of Sergei. It would take 100s of attempts to get that document to go through successfully. About 6 days later, the Russians were given seats on an Aeroflot plane and flew home.
AK: Calling the Academy of Sciences?
MC: I think it probably was with Evgeny Velikov’s office, who was helping behind the scenes. He was very close to Gorbachev at the time. Days after that conference, I set off to travel for several months and see as much of the world as I could. My mentor Louis Rosen said, you know, whatever you do, do not mess around with the black market when you go to the Soviet Union. I had planned to take the Trans-Siberian train from Moscow to Beijing. I assured him that I would not get involved in the Black Market. He said, No, really, you won’t get out if you do something dumb. Three months after that conversation, I was taking the Trans-Siberian through Russia. Unfortunately, the opportunity to trade for rubles and Soviet trinkets was a bit too luring to ignore once I arrived in Moscow.
AK: So did you sell some stuff?
MC: We traded jeans, watches and exchanged dollars for rubles. The hotel exchange rate was 0.67 rubles for a dollar. On Arbat street, you could find someone to exchange ten rubles for a dollar. With a $20 exchange, we immediately had a lot of Russian cash that made it possible to eat in one of the few decent restaurants available and to buy vodka for our 7 day trip. My American friend and I, and three Swedes, missed getting back on our train in Omsk, Siberia two days into our trip across the country. We had been looking for Pepsi in that train station. There was nothing decent to drink on that train, just acidic tasting Russian soda. It turned out that none of us were really vodka drinkers, which is the only quality drink we had. Thus, we were on a quest for Pepsi so we could have mixed drinks. The mistake of looking for Pepsi in the middle of Siberia over a 15 minute train stop cost us 72 hours of stress trying to catch up with our original train. That 72 hours included being put on a Russian local train with Russians who made relentless fun of us when we were running on the platform after the Transiberian left the station, 24 hours under hotel detention in Novosibirsk escorted by a very big KGB agent, a harrowing Aeroflot flight, and taxis that didn’t think red lights were meant for them in the city of Irkutsk.
We had to pay for the plane flights, hotel rooms, and taxi - fortunately we had a lot of rubles on us. Each of us had to pay an equivalent of $2.40. We eventually got to Irkutsk and spent another night in the train station. We nearly missed the train again the next morning. It turned out the KGB had somebody following us. Our platform number was not posted on the Irkutsk train station real-time schedule and our train was stopping for just 3 minutes. A guy stopped in front of us in the middle of this huge crowd moving downstairs to get to their platforms, and said - "hey you guys, it's platform 6.”
When I returned from this trip that took me from Western Europe, across the Soviet Union, through China, southwest Asia and then Eastern Europe, I decided it was time to go grad school.
SH: Molly, before you go on, let me step back. So 1989, July you said, Louie Rosen organized this conference here at St. Johns University. It turns out, I’ve been trying to recall when Sergei Kapitsa came to the lab to give a colloquium, and that must've been it, because 1989 is what I remember.
MC: Sergei also was here in 1991 and 1993. Louie had another conference in 1991. (Sig introduced Sergey at that conference). I saw Sergei again in 1993 in Los Alamos.
SH: I know this was still during Soviet times, and I remember he gave a remarkable colloquium. He talked about the Kyshtym disaster. And that was the first time we had heard what actually happened, at least what I had heard. And it was it was quite remarkable having him come - he was so open, so anti what we would have thought was Soviet that at the time, and Louie introduced him, but for some reason if I knew about the conference down there, I didn't remember it.
MC: You were at part of the conference. You gave the welcome speech.
SH: In 1969, has Max Fowler already had four Soviets here?
MC: I am pretty sure that was a Max Fowler project. I want to say the first visit was in 1966 when the first Russians came to Los Alamos. My mom said that my dad would interpret for them all day and usually drop them off after a Lab sponsored dinner and come home exhausted. The Russians loved the phone book, as they did not have anything like it. My dad would get home and the phone would ring. The Russians would ask if he could come get them. He would go back to town and bring them home. They would bring canned fish and vodka. My dad would pull out pumpernickel bread and an assortment of American liquor. A number of times, they would come back into our rooms, pull us out of bed to hang with them as most of their kids were in state sponsored care programs in cases where both parents were scientists.
SH: The first Russian person who came to Los Alamos was actually 1958 already; and it was after the Atoms for Peace, so it was an official Soviet delegation that came to the laboratory and we had news related to that. Then Max would have been sometime after, because the first Meggauss conference was in 1965 in Italy; so 1969 might seem right. But the most important point is that in 1969 there were four Soviets here, for scientific reasons, and your dad was doing the interpreting. So, to continue, you are off to graduate school.
MC: Yes. I decided to study international relations with a focus on national security studies. So much significant had happened in the late 1980s and early 1990s. My travels had given me insight into how the world was changing. I realized that there was going to be so much opportunity with the United States and the former Eastern Bloc countries, particularly in the area of R&D and technology sharing, so I went to grad school and that was my focus. I wrote my Capstone Thesis in 1992 on what this might looking like, titled it “R&D Sharing and Technology Transfer between the Department of Energy National Laboratories and Weapons Institutes in the former Soviet Union.” I got it my Capstone paper back with the following - “B- this will never happen!”
SH: What was that university?
MC: University of Pittsburgh. I returned to Los Alamos and got assigned to the Violin project; I helped my dad translating the training manuals into Russian.
PW: That was one of the SST programs to help Russians assess the possible dispersal of radioactive material; and the philosophy behind it was that it was not so much they were going to have a lot of dispersal, but it would give the public confidence if they knew they had American equipment. At one point, they did have a tank explosion.
MC: I was working on the Violin program, but at the same time, more Russian opportunities were starting to appear for the US and Russian nuclear labs. Avrorin (Yevgeny N. Avrorin, Director of the Institute of Technical Physics at Chelyabinsk-70, one of two Russian research centers for nuclear weapons design) came to visit you in ’93, right?
SH: Avrorin and Trutnev (Yuri Trutnev, Director of Institute of Experimental Physics at Arzamas-16). But first, the lab directors came in February of ’92; that was the first official exchange, and then in April of ’93 was the 50th anniversary and Avrorin and Trutnev came.
MC: That makes sense. Which time did you get a gift from Avrorin?
SH: It was in April, 1993.
MC: And it was a piece of an SS-11?
SH: A piece of SS -11 mounted on a serpentine base which had an inscription “From Russia with Love”.
MC: Yes! So that was my first attempt at a Russian project - a couple my friends from grad school and I thought that pieces of dismantled Soviet nuke casings would make a great retirement gift for U.S. government workers. We put together a business plan and started reaching out to the Russians at nuclear weapons labs we knew. At the beginning, we sent letters through Avrorin to someone named Oleg Tikhany. Oleg was in charge of an organization called AO Uralform in Chelyabinsk-70. AO Uralform was a joint venture that was involved with the direct dismantling of SS-11s and SS-18s.
AK: Molly, how did you get his contact?
MC: We talked to somebody in Avrorin’s group on one of his visits and started this back and forth with letters. Both sides were using Russian and US visitors to deliver letters. The Russians bought into the idea and sent pieces of the rockets. I have a few pieces of those weapons at home and one in the Bradbury Museum. Then they started trying to design what they thought would be great souvenirs made from the SS-11 casings. All these Los Alamos people, Pete Lyons, Sara Hayes, John Ruminer, Ann Arthur, Mike Stevenson were trying to help us, because our goal was to try to create a non-profit and a for-profit company, and have the non-profit pursue grants and things to get something more going with the Russians. Eventually my buddies and I went to Russia to negotiate with Tihane. We met him in Moscow and received a letter of intent to start working with them.
SH: What time was this now?
MC: This was July, 93. We had worked on a business plan for several months. We were really excited about the opportunity. Then it gets down to implementing the business plan, and that's where things got tough. Initially, we wanted to get some pieces out of there to see if there was a market. So we asked, can you get us a number of pieces? They only got us a handful. We finally got down to specific negotiations, and they started with requesting $150,000 for the first 150 pieces. We responded that we needed to sell these retirement gifts and souvenirs for $30 - $60 apiece. The Russians needed to be able to get their scrap metal cut and out of Russia for well below our projected prices of putting together the design, production and marketing of these gifts and souvenirs. They had no solution as to how to get their scrap out of Russia in big orders, outside of travelers loading their suitcases.
AK: All they provided were these pieces of rockets?
MC: They provided several pieces of the casings, possible product designs and put together some of these designs they had drawn. It turned out that the AO Uralform that Tihane represented was not directly overseeing the actual dismantlement. They were working through another organization that was doing this and were negotiating with that organization for the pieces. We weren’t sure who the ultimate decision-maker was on their side. Then there was their export control. These issues and challenges were worked on for 8 months. In the end, it was going to be prohibitively expensive to make this a reality. During my day job at Los Alamos, the very beginning idea of the Initiatives for Proliferation Prevention (IPP) program was being discussed by LANL, LLNL, SNL and ORNL. I got in on the bottom floor on the beginning of a federally funded program between the DOE nuclear weapons labs and their counterpart institutes in Russia.
SH: So you did a pre-IPP. This is the first time I've heard this story. This is a fantastic story. So, you were doing this as an independent agent so to speak.
MC: Yes. We knew things were going to happen in Russia, but there was no way to do it yet - there was no way to transfer money, goods, people on a regular basis. Los Alamos National Laboratory had a few science projects going with Russian institutes. I connected with Terry Lowe at LANL, who was also interested in learning more about what Russia had done in the materials sector. He and I went to a materials conference in St. Petersburg to learn what the Russians were doing with shipbuilding and storage materials technology. Terry was really excited about what he saw.
SH: Were you working at the lab at that time?
MC: Yes, I had just moved over to the materials division out of the Violin project to work for Terry Lowe in MST-6. Terry was looking for commercial opportunities too, because he wanted to commercialize something outside of LANL. We had met at some event discussing how to commercialize Lab technology.
SH: When did you officially join the lab?
MC: I was a contractor in spring of 1992 and I became a staff member in 1994, when I joined Steve Younger’s brand new group - Center for International Security Affairs. That's when someone on your team said: Sandia and Oakridge are working together on creating a new US-Russian initiative; Livermore and Los Alamos need to go to the next meeting. They're trying to do something to encourage technology commercialization in Russia and this partnership program. This is also when Hugh Casey jumped on the opportunity.
SH: We talked with Hugh yesterday; we had a great session at my house.
MC: The very first part of this inter-lab planning effort with Sandia, Livermore, Los Alamos and Oakridge was what we all loved the most. It was the chance to do something really new, impactful and entrepreneurial. We were joined by John Hnatio, this young guy who had worked for Senator Domenici and was now in Department of Energy and who really realized the potential of doing something to identify and commercialize former Soviet technology. Those early days of the IPP program (eventually to become the GIPP program) were really fun because it was all about creating projects, developing really solid relationships and connections with top Russian technologists, US companies, scientists at other labs and so much more. It was the anti-thesis of a usual kind of government program. There was no precedent to follow. Everyone involved in the IPP program early on was so fired up to be involved.
SH: You mean on this side?
MC: Yes. I remember Dennis Phillips from the Technetium-99 program. His team was so excited to get the isotopes produced in this country and the Russia connection in this program helped create a new, reliable supply for hospitals and diagnostic companies when Canada started having problems with its key production reactor.
SH: Yes, these were the most important isotopes for heart-related diagnostics. Canada was producing them for the Western world and they had trouble with the reactor. And it was a lot of activity with the Russians as to what could be done and they certainly had the capabilities at the time, so technetium and Moly-99, depending where you catching in the decay chain. So that was Dennis Phillips?
MC: Dennis Phillips, and before him it was Eugene Peterson. Those guys got that project going. It was one of the most successful IPP projects because Bristol Squibb Myers ended up buying Russian isotopes.
SH: I am actually thinking of this. It is a story that we haven't told at all. I didn't think of it until it right now in terms of buying Russian stuff. One of the most important isotopes we needed from our end was Plutonium-238 for the space batteries. We wound up buying them from the Russians because it cost too much to make at that time in the US. We ran out, and without the Plutonium-238, you have no Pluto Flyby. You don't have any of those distant voyagers. So we wound up actually buying the PU-238 from the Russians. We had to worry about the chemistry, the qualification, because now we were going to put this nuclear material into our space vehicles and launch them into space. It was a big problem. Los Alamos played the consulting role for that. This was a big DOE project. But let me just go back to make sure we catch the history. I remember you first working on this, working with Steve Maaranen and company. That's when you were a student, right? You were a grad student.
MC: Yes. In my first project we were looking at the environmental degradation in the Soviet Union with Steve and others. I started working with Louie Rosen because he needed help for that conference, and I wasn't cleared. Then I worked for Joe Pilat. My project was to look at every republic in the Soviet Union and hypothesize what would happen to each of them when the Soviet Union broke up. I predicted what would happen in the transition - would it be a better or a worse situation - with respect to their economic, defense and environmental issues.
AK: And your Russian focus, was it due to the fact that you spoke Russian and understood Russian and were interested in Russia and Eastern Europe?
MC: I had been interested in Russia and Eastern Europe for a long time.
AK: You are of Czech origin. As a Czech, how did you feel about Russia?
MC: I did not have a positive view of Russia. My dad had spent a bunch of his youth supporting the Czech underground in nearby his village of Pisarov and survived three Nazi camps. His uncle Domenic ran the Czech Underground in his region. After the war ended, he was 20, so he enrolled in Masaryk University in Brno. He was suspended for 2 semesters for being a student against the goals of democracy, the government and the goals of the national revolution due to what he wrote in his first state exams. He was assigned to work in manual labor for the labor department. He returned and finished his undergrad degree. He started grad school. Soon after, he was listed as one of the top five enemies and traitors to the CSSR government. He was in his 3rd story dorm room when he got a phone call downstairs. A friend told him to get to the train station as fast as possible – “run!" As he was about to return upstairs to get shoes, a coat and a wallet, three Soviet soldiers walked in and they asked him where is Cernicek’s room. My dad pointed upstairs, put down the phone and ran. He had a harrowing escape to get to Austria as the border was well patrolled. They eventually got across the border, thanks to the advice of a local priest, but then had nowhere to go. Eventually, they were arrested and placed in a Vienna jail for three weeks. The Viennese police drove them to the border of Italy after they realized that jail was a major step up for the five refugees. The five travelled to a refugee camp in Naples, Italy where he assisted the chief of police untangling constant fights and related issues of the refugees. His birth mother found a way to bring him to the U.S. He lived in the U.S for two years prior to the depression. When the economic stability declined, several Czechs in New York sent their kids back to Czechoslovakia. They would not be able to get their kids back out after the depression began to subside because the Nazis were moving in. My dad grew up with his aunt; his brother and 2 cousins were also sent back from New York. His aunt eventually married and had a daughter. My dad was very anti-Russian. I remember a conversation when I was in 5th grade and we were chatting about nuclear weapons and their reach. All of sudden it occurred to me, I knew we had nuclear weapons targeted at Russia, but it never occurred to me that they would be targeted to Czechoslovakia. Every year, we would get a pixelated black and white picture from his cousin (his aunt’s daughter who my dad always referred to as his sister.) for Christmas. It was shocking to me some of our nuclear weapons were targeted on Czechoslovakia. It really bothered me, because my dad’s relatives were not Soviets. That was a driving force of why I wanted to get into Russian and Soviet relations because the Cold War seemed ridiculous to me in multiple ways.
AK: It didn't make sense to you?
MC: It was just such a lose-lose situation - nuclear weapons could destroy their country, Czechoslovakia, our country and many in between. I couldn't believe it. From a 5th grade perspective, mutual assured destruction was absolutely nuts.
SH: Did you carry the hatred of your father?
MC: No, I didn't carry the hatred; I was more intrigued. I just thought there could be a better solution. It seemed that at some point there would be a solution for less Cold War and more partnership, because the US and Soviet Union could only go on so long with tens of thousands of nuclear weapons pointed at each other as much of the world progressed economically. One guy who made me start thinking about the situation more comprehensively was Ed Grothus. He lived on Barranca Mesa and was considered the town eccentric, because he was so vocally against nuclear weapons living in a town that was created and grew because of its nuclear weapons mission. As I got older, I understood why so many people were adamantly against nuclear weapons.
SH: Since you're recording this, I can actually say it - because I've never had it recorded anywhere. He was a local anti-nuke guy. And people for the most part in Los Alamos did not like him very much, but it's also because he was a very peculiar personality in the way of doing things. And he was also a scavenger, and he had a place, it was called the Black Hole. He would go to the laboratory salvage, where the laboratory sold equipment it no longer needed, every week. Ed collected all of that. He always spoke out very forcefully against the lab. It's the way he said some of those things which were as ridiculous as some of the things that he said that actually made some sense, but he had this peculiar personality. Then he ran the best jewelry shop in Los Alamos. So he ran that shop, and the Black Hole, and was the town sort of anti-nuke. At one point, at the end of my directorship, he complained about a lot of things that I did as director. He had a piece in the Los Alamos Monitor. He had a way of getting an op-ed piece. He sent a letter to the editor into the Monitor where he called me a moron. Not long after that, he comes to my door on the Rim Road and rings the doorbell. I opened it up. He's there, he wants to talk to me. I said, Ed, I don't need to see you. I don't need to talk to you. I don't want to talk to you. And he said, Why, why is that? I said, Ed, you called me a moron, and I don't like being called a moron. He starts to cry. Actually standing there, and he starts to cry. He somehow didn't quite put together that he was insulting me. Anyway, he was an interesting character.
SH: So in going back, you worked with Joe Pilat - this is when you were still going to school, right?
MC: I did that right before I went to Pitt. I went to the Baltic republics with Lee and a bunch of friends when the Baltics were under siege from the Russians. These new Baltic governments had brought in several Americans who were helping set up new governments. We connected with several of them. Lee would call the new Office of the President in Latvia and Lithuania and say, I work for Congressman Bill Richardson, and he just wanted to know how things are going. Is there anything we could do for you to make your life better? As a result, we were invited to come to their offices. In Lithuania, there were many barriers to get into their executive building. Sandbags had been put down all over the place, because they had booby-trapped their lower roofs.
SH: So how did you get into the IPP?
MC: It was because I worked with Terry Lowe. Hugh Casey was also in the Materials Division and got a call from someone he knew at Sandia about a meeting coming up in Albuquerque to discuss what the Labs could do with the former Soviet weapons institutes. I ran into Hugh at a Lab function and he invited me to go with him.
SH: It was a natural progression because you had a right sort of background, and the entrepreneurial background. So you began to work with them, with Hugh Casey since he was leading us at that time. You knew Hugh also?
MC: Yes. I remember the very first IPP meeting with the group we named the ILAB group. It was Hugh, a representative from Oakridge, Dave Nokes, Jim Rea and John Taylor. Possibly Frank Zanner. Also someone from Livermore. I think John Hnatio, who had just returned to DOE after doing a 6 month stint in Senator Domenici’s office, was at that meeting as well. I remember we were trying to figure out how we're going to engage the Russians and create a program to support them as their salaries quickly evaporated due to Russia’s intense economic problems. We had decided to have our first official meeting with Russians invited from several institutes at Oakridge. The unfortunate thing is what I remember most from that first meeting was the Oakridge representative stepping in to say that he had meeting in control and pulled out a map of the building the meeting would be in at Oakridge. He started pointing out where the bathrooms were as well as the exits. The rest of us were so stunned, no one could respond. What was positive though, is that the first meeting we had with the Russians went really well and we began creating and implementing a very complicated program in a short time. It was much more of a startup environment than a government process. Everyone felt the clock was ticking and if we didn’t find a way to stabilize critical weapons institutes with new contracts, some of the top weapons experts from the former Soviet Union could end up working for rogue nuclear weapon efforts in other parts of the world.
PW: We had an expert on this side that helped recognize the Russian technology potential and commercial value.
MC: We had so many people with connections to the former Soviet Union; they were coming out of the woodwork and connecting us to scientists and institutes through their networks.
AK: Are you talking of Russians who were connecting to you?
MC: My contacts, yes, but many, many more. There were Russians, Ukrainians, Kazakhstani's who all had connections to DOE lab scientists. One of the things that was hard at the beginning is that the State Department’s International Science and Technology Center (ISTC) was starting at the same time as IPP. That program was also engaging scientists in Russia, but had a very different business model. Since the outcome of both programs was the same - to engage and stabilize potential brain drain of former Soviet weapons scientists, there was a great deal of maneuvering shall we say. The ISTC model was to support scientific research of individual scientists. The IPP model was using national laboratory scientists to identify and valídate cutting-edge technology, and then bring in US companies to assess these technologies for commercialization opportunities. The company component was the most difficult part of IPP early on - how do you bring US company participation without violating fairness of opportunity?
PW: The other side of it was a focus on Russian technical capability that existed at a nuclear facility.
MC: At the beginning, it was all over the place. We were supporting institutes in nooks and crannies all over the place. At one point, we had project leaders engaging biological and chemical weapons institutes to assess technology. Some of us would joke about those trips. The thought of touring a dilapidated biological facility with dust on every surface was terrifying. At that time, all of the weapons institutes were in buildings that were poorly built in the first place and were in terrible disrepair.
AK: How did you manage this?
MC: On the very first trip to Moscow, Hugh and John Hnatio, and one ILAB rep from Livermore and Oakridge began the networking in earnest and figuring out how we could create contracts between individual DOE labs and weapons institutes over there. Unlike ISTC, ILAB had decided to create contracts with institute leadership and let them manage their scientists and budgets.
Proposals came in large numbers. They were in Russian, English, typed, handwritten, whatever they could do to get them in someone’s hands. Hugh’s interest was in materials. The technical backgrounds of the ILAB representatives were broad. It worked out well in the beginning because it was rare that two labs wanted the same discovered technology unless it was really intriguing. In those cases, we had to figure out how to share those projects.
SH: For some clarification. In terms of the initial engagements over there, Hugh was leading our efforts on a number of the materials related activities. You know his background was in welding. The Russians were getting involved but particularly, he had contacts in the Ukraine, at the Paton institute. He told us how he met Boris Paton in Sweden. He had some connection through them, and then, through C-70, (VNIITF) - they had several really novel developements utilizing superplastic forming of materials. He connected with them. Then Frank Zanner at Sandia, a casting guy for specialty metals, namely mostly refractory metals, which means very high temperature melting metals like tungsten, molybdenum, also engaged with Hugh and the C-70 scientists. They were very good at superplastic forming, particularly when it came to things like titanium and other alloys. The Russians had this incredible industrial expertise. Then you had two very knowledgeable materials guys like Frank Zanner and Hugh Casey. They tapped into VNIITF, for example in Snezhinsk, almost right away, and then the number of the other institutes around that were more or less loosely connected with the weapons program, so they felt there was a lot to be gained by working with them. Hugh who also tells the story, the one that I remember, one of the first things they brought here with one of the institutes in Moscow at is a big gyrotron for microwave processing of materials. Hugh had to sort of knowledge to be able to know where to tap in, where there's something that was really interesting.
MC: Hugh found so many innovative technologies. He absolutely had a sixth sense of what was game-changing in the field of materials. His major objective was to work together with the Russians and bring in US companies that could benefit from his discoveries and IPP’s in general. We created the US Industry Coalition (USIC) to get around fairness of opportunity issues. Any company could join, big or small, and have equal access to technologies identified and projects created with the Russians. Personally, I did not think we should create USIC. I wanted to create a venture capital fund. I had just started to learn about that type of capital. I wrote a proposal to John Hnatio where it said, we should create a 20-million dollar venture fund and we should start creating companies out of the technology we identify. John read it, but he didn’t think we could pull it off. So we ended up doing this industry coalition instead.
PW: John was one of those persons in Washington that had enough political connection. Some ideas that were good could be turned into programs.
SH: John Hnatio? Hugh told a story. John was at DOE and then became an industrial fellow in Domenici’s office. He played a major role, as Paul says, politically, to have enough savvy as to how establish the IPP program with Domenici and Alex Flint, Domenici’s main staff support. So John was the DOE guy. He was quite entrepreneurial - quite a personality.
MC: John made a great deal happen. He was incredibly resourceful and he was a scrapper. As a result, he got into a lot of fights in and outside DOE that he probably should not have. It especially created more animosity and problems between IPP and State Department’s ISTC. Instead of developing a more solid connection with the State Department, we had a very unstable relationship between our programs. ISTC was using our scientists to help validate their proposals as both of our programs were getting a number of proposals that were based on nonexistent science in an effort to get a contract from one of the two programs. Had the two programs worked together to complement each other, there would have been far more commercial and investment opportunities. Then, we met George Kozmetsky.
SH: I was going to bring him in. Hugh brought him up, the IC2 (Innovation, Creativity, Capital) at the University of Texas at Austin.
MC: His parents emigrated from Belarus. He was amazing. He ended up to be the dean more than once of UT’s business school. He created IC2 and Hugh ran into him at a meeting and invited him to the Lab. We had this meeting with Hugh, George, David Gibson, Barbara Fossum and you, Sig. George liked the mission of our program, but said it was challenging. He asked, how do you commercialize these technologies, because commercializing is really, really hard? That was the point that I think we all did not understand - just how difficult it is to commercialize something. He told us, you’re just starting a really expensive long tough process at the point when you discover a great technology. Those of us who had never commercialized anything before had never contemplated what it would take to transition a technology into a product. George pointed out the gap in our program between identifying and validating a technology and getting a US company interested in doing something with it. He invited me to enroll in IC2’s Technology and Commercialization master’s degree program and to work with IC2 to create a conference that would introduce in the best computer and software related technologies we had found in Russia with Austin’s software industry. At this point, Sig, you were getting really involved with Intel and Arzamas’ Open Computing Center that you spearheaded. We invited a group of computational scientists from Arzamas to meet several different companies in Austin. Topics covered were parallel computing, radiation and shielding designs, bimolecular modeling, cybersecurity, outsourcing software development and more. The conference initiated many discussions and ideas. Several Austin companies wanted to create contracts with the institutes represented or were considering spin-off opportunities. There was one young Russian there who had left Arzamas and started a software company in Nizhny Novgorod, the first person to do that. He had a partner in the company, but she was never allowed to leave Russia because of what her role had been at Arzamas. He was headed to Silicon Valley after the conference to discuss financing options and moving the company to northern California. It was the first time that Russian scientists realized that starting a company was a possibility to commercialize a technology. The Russian had successful talks in Silicon Valley and moved. I ended up meeting his partner for dinner in 2005 in Moscow. She was still working in Nizhny Novgorod, but was very disappointed how her lack of mobility had limited her options since leaving Arzamas.
AK: When was that conference?
MC: October, 1999.
SH: Well, that was the time when the story in the book about the Open Computing Center and the problem with export controls. This was all 1999 time frame, and, as Molly said, I got particularly involved because we were trying to solve this major export control political fiasco related to these computers that both VNIIEF and VNIITF bought, and the solution was set up an open computing center, first in Sarov and then in Snezhinsk. But then you had to get them something to do, and so this conference and this activity was one of those opportunities. 1999 was when we took Motorola executives over there. And then we brought the Russians, and I know Alexey Golubev came to Boston. Then we took him to Motorola in Scottsdale. We had separate visit when Rady Ilkaev and Rogachev came and visited Motorola. All of these visits were part of this exploration of what the Russians with their computational capabilities could do in the Open Computing Center and how could they work with the Americans.
SH: But how did that effort with Kozmetsky go and why did it die?
MC: There was no one in Austin to keep it going. My counterpart at IC2 was Wes Cole. We were able to get initial interest by visiting Austin-based companies and presenting opportunities and introductions in Russia. A few companies created contracts directly with Russian institutes and companies as a result. Wes got hired by a venture capitalist who was interested in opportunities in Russia and who attended the conference. A bigger, more impactful force that slowed the momentum substantially was the changing of the IPP DOE leadership from John Hnatio to Bill Desmond in 1999. Bill didn't like the way the ILAB community had set up and operated the program for the past 6 years and set out to change everything. Hugh clashed with him on day one. And I clashed with him day two. I had created this information system with a small team at LANL and Jim Rea at Sandia, using Lotus Notes groupware that showed details of every project, project timeline, approval, partner, task, etc. Everyone in the program could see the status of a project, and more importantly, where projects were being held up in the approval system. The amount of signatures necessary to move forward on a project went from two per project at the beginning of the program to around fifteen by 2000. The information system showed all of these projects waiting for approvals in Washington. It took many more months for the labs to get funding for projects, even after the arduous approval process had ended positively. IPP had started like a startup and then grew into this mammoth of bureaucracy for one of the smallest programs in DOE. Bill wanted Booz Allen to take over the IPP information system and give them the funding to oversee it. We had over 6 years of data detailing every proposal and project in the program. It came to a head for me when someone logged in through the Booz Allen account was downloading everything. I immediately downgraded that account to reader status only. About half an hour later, I got a call from Bill, and he just started screaming at me - you can't turn off their administrative access! I replied, Bill, I just got off the phone with our lawyers, and they say that all of this is copyrighted and that if Booz Allen wants to have this information, they need to go through our tech transfer office and license this information. He slammed down the phone and that was the last conversation I had with him. I knew I was done with this program.
SH: So then how much longer did you stay in that program?
MC: I left about 2001. I did not deal directly with Bill again. The turn in the program happened just as really solid companies were joining the USIC to explore Russian technology opportunities.
PW: USIC was U.S. Industry Coalition. But it was a kind of like Jeckyl and Hyde situation. There were good things that could happen through that mechanism, but it could also hijack the program.
MC: Right, and there were some people who were trying to figure out how to get money to put their own companies. There was one guy who had a company in Florida, and he made a living getting government funds. We had set up IPP and USIC that made it impossible to do that. Those allotted funds had to go to Russia. Eventually those little companies moved on and we brought it companies like Pratt and Whitney. Hugh recruited them and several others.
SH: John Berger got automotive and then Hugh got Pratt Whitney, the aerospace people and so on.
SH: Molly, as you look back now, did it do any good at all, this activity?
MC: As I think back about the whole experience, so many involved whether in the Labs, DOE, Russia, etc. overwhelmingly kind of got the entrepreneurial bug. There was an opportunity to create a business model that was different than anything ever done between the United States and the former Soviet Union up to that point. I look at Alexey Golubev from Arzamas and others who came to Austin, Boston, the Bay Area and created their own companies. Several people on the Lab side of things jumped into the businesses as well. I took a shot at commercializing one of the technologies that was in an IPP project.
AK: What happened to this technology that you wanted to commercialize?
MC: That evolved into something much different. It turned out the Russian who had presented the technology was not the inventor. But I found the inventor who had emigrated from Russia to England. The technology was a method to expand dataflow on existing optic fiber with these new fiber-based Raman lasers. A Russian a guy named Gapontsev had created a new high-powered amplifier. He moved his entire postdoc staff with him to Germany, and he started his company IPG Photonics.
He sent one of his grad students, Stas Chernikov, to England to start selling these powerful Russian amplifiers. I met Stas through a Russian scientist involved in IPP and learned that he was designing and building new fiber lasers as he had figured out that they would offer more power to move data on fiber optic. In 1993, so called experts surmised that the internet infrastructure would not need to be much bigger than it was. What was funny is these Russians show up in Europe to sell western companies their high powered amplifiers and lasers, but were told that these companies didn’t need any more light or fiber. Of course we all know what happened then. Gapontsev did really well because he went to the US and started building a new type of laser - the fiber laser. Stas left that company to pursue his own company and technology. I became his business partner. We moved his company to Russia in 2005 to take advantage of highly educated scientists. But by the mid-2000s, so many of the best educated and trained Russians had left the country in our sector. We set up a manufacturing facility outside of Moscow.
SH: Let me interrupt. By that time you’d taken an entrepreneurial leave. You were doing that as a private business person.
MC: Yes. Things were going really well for Stas and in the early 2000s, he had an opportunity to raise a ton of money, but was nervous about it. In 2001 or 2002, he had an offer in the area of $10 to $15 million for something like 20% of his company. I encouraged him to take it, but he chose to take a much smaller amount from two Russian investors. At that point, he was making Raman lasers and amplifiers and making a killing on the profit. So he was raking in the money and wanted to build his company more on a bootstrap model. Gapontsev, on the other hand, moved to Boston and raised a huge amount of money for a new manufacturing facility at fabulous terms for his company. In England, a fiber optic manufactured went belly-up just after the telecom bust. Stas and I realized there was money to be made in the second-hand equipment business and would go to these auctions in person or online and buy new or nearly new equipment from so many companies being liquidated. You could get amazing equipment for pennies on the dollar, so literally we bought an entire manufacturing facility piece by piece. The challenging part was how do we get all of this equipment into Russia from countries all over the world? That's where we became very creative. What was disappointing is that in 2005-2006, there was a great deal of Russian allocated funding for new businesses and entrepreneurial initiatives. But instead of it going to new companies and technology, it all got siphoned into aging institutes that had dilapidated infrastructure, an old workforce and no new employees. So many institutes had lost all their young people. It was really difficult to hire any new, well trained graduates for us. We finally found a small university that was teaching physics, but nobody taught optics, because it was too new an area. All the exceptional professors had left, and optics was so new nobody was teaching it. We built an intern program with 14 students. I think four of them are still at the company today, but we operated the first 4 years in Russia with something close to a 95% turnover rate in the company. It was beyond challenging. People didn't want to work hard in a job and with a startup, there was no other option. When we started in Russia, we were paying engineers $600 a month. By the time I left the company in 2010, we were paying some people as much as $5,0000 a month. I remember one employee demanding a $500 per month raise, they were making $3,000 a month. He said, if I don’t get the raise, I'm going to go work for a dry cleaners company in Moscow - and he did. Every company in Russia was desperate to fill jobs, as Russia had lost so many competent people to the West and more western businesses were opening every year. We were competing for employees in the middle of that major transition.
SH: So then did the whole company fold up or did you just leave?
MC: No. I left at the end of 2009 as I needed to be in Russia full time. We didn’t need the US office any more. Moscow was not my kind of place - no biking, skiing, or much outdoors life, not to mention the cold. The company had changed significantly from when it had started in England and moved to Russia. We were working on cutting-edge laser technology in England and had really innovative partners and customers. Moving to Russia redirected our focus to the needs of the Russian market and also a less educated and experienced workforce. So we went from manufacturing niche high-end lasers and amplifiers to building components for the Russian telecom industry. The company merged several years ago with an Israeli company that needed major equipment upgrades that matched what our company produced and that expanded our customer base well outside of Russia. The company is still alive and well and based out of Tel Aviv.
After we had bought the majority of a fiber optic company’s manufacturing floor in England, we tried to create an IPP project with Chelyabinsk-70 to move the equipment there and they could start producing all kinds of components and fiber for Russia’s dilapidated telecom sector. We wanted a joint venture with C-70. C-70 management wanted us to give them all the funding we had for this project and then they would set it up the equipment without us and invite us back when it was finished. What they really wanted to use the funding to reconfigure an old steam room with new heating infrastructure. Our relationship was short-lived with them. We tried to collaborate with another institute that was equally as bad, if not worse. That group took apart one of our fiber lasers, broke it and returned it fixed with scotch tape instead or resoldering the disconnected fibers. That ended our attempt to utilize the IPP model.
SH: So if you had to do it all over again, something like IPP or some business of tech commercialization, working with the Russians to give people in the weapons institute a better opportunity to do things in the non-weapons related activities, how would you do it today on the basis of what you know?
MC: Number one, we should have thought about training scientists on both sides of IPP about how to think about technology they created or validated as a product and how it could solve a customer problem, whether that market was commercial or defense-oriented. Secondly, we should have found a way to integrate experienced entrepreneurs into the program who could identify the market opportunity much better than anyone inside of the Labs and DOE could. Thirdly, we should have spent more time thinking about the financial model we chose. Instead of giving money for scientists to continue their research without any specific goal of a prototype or product, we and they missed an opportunity to learn and implement commercialization. Fourthly, we were missing seed round capital. If capital had been available that was tied to prototypes, product and market development of some of the best technologies we identified, I think we would have seen acquisitions and interest in Russia from the emerging US tech industry. To sum it up in today’s terms, we should have integrated the Lean Startup Method and customer discovery into every proposed project, brought successful tech entrepreneurs and seed capital partners to Russia and funded experienced entrepreneurs who were willing to commercialize some of those IPP technologies in the US. USIC companies could have bought startup companies and scaled them.
SH: That's what I was going to ask. According to what you know now, as you said, that a venture fund would be a better way to go, than to go through the way the government doles out those few dollars they have, but suppose you did that, you still run into these difficulties.
MC: We would have run into difficulties if venture companies initially funded companies on these technologies that stayed in Russia. Perhaps, if there had been early successes of commercializing Russian technologies, the Russians would have bought into the potential of non-defense related product development. But realistically, Putin had zero interest or training with anything related to a market-based economy. He didn’t recognize what he could have productized from his intelligence institutions, let alone any other sector. He was always going to be an obstacle. You look at how little Russia produces today. It inherited so much innovation created during the Soviet era that with investment and incubation could have positioned that country to be a global technology leader and trader today.
SH: So, they are almost inherent difficulties. What’s curious though is if you look at what the weapons institutes are saying, at least, let's say more than two-three years ago. They have come upon harder times, but what they said, is that non-weapons related activities in some cases were like 40% of the Institute's activity. The implication you have is that they have been very successful in working in non-weapons related activities. Of course, you know the U.S. weapons labs are nowhere close to that. Sandia does about the best, but Los Alamos and Livermore, I think today as far as sponsored by industries is a few percent. So, what's your view? How could they have been so successful if you believe those numbers?
MC: I think the US weapons labs leave so much science on their shelves that will never be used in the commercial or defense sectors because there still is so little thought about the end-use of research and how it can make an impact. And they don’t really care because they don’t see economic, energy or environmental security on the same level of nuclear security. Their focus is on their missions of keeping the stockpile secure and reliable. I think it makes sense that Russian institutes are focusing significantly more on non-defense work because there is such a strong demand for non-defense related domestic products. Between sanctions and high prices, Russians are willing to buy a Russified iPhone or computer that delivers basic capabilities. Quality of work is not nearly at the same level in Russia that it is in the west, so there are many opportunities for Russians to manufacture lower-end products. One of Stas’ good friends makes cosmetic lasers that were small enough that he could get them out of Russia to a dealer in Mississippi. Eventually there became a demand for them in Russia and he could sell everything he made there. We all know that fake news is a profitable and growing service in Russia. But, there is likely just one big customer willing to pay for that - the government itself.
AK: Sig, I have an answer to that. I think that a large part of this is just large state contracts. It is not a free market. It is just something like Gasprom which is a big state company, Russia’s Railways which is a big state company, and stuff like that.
SH: That's what I give as my answer also. It's they've hooked up with the state-run companies.
So Molly, as you look back at all of this, at your interactions, then with the Russians particularly through the laboratory years, what’s your final reflection as you look back? What was it like? What did you learn; was it worthwhile; was it a disaster? How about personally - would what did you gain or what did you lose?
MC: In the 1970s, between the US and the Soviet Union, we had produced over 75,000 nuclear weapons capable of destroying the world over and over. That approach was not sustainable. What was really positive about the beginning of IPP was that the world was in major transition as the Soviet Union fell apart and we were engaged in trying to find ways to contribute to making the transition positive. Change is never linear or smooth, but we were all in building new relationships and opportunities that were so much more personal and full of potential than could have ever been imagined during the Cold War. We broke down barriers because we're not different than our Russian counterparts. We live in different places; have different governments, cultures and views, but we all want our kids to grow up and get good educations, have fulfilling careers, be healthy, and enjoy life.
The gains for me are that I learned so much about governments, policy, and business. I met and interacted with so many talented and amazing people, especially the original players in IPP. There were so many incredible experiences.
The pains were quite personal for me. Just as we were getting serious momentum going in IPP in 1994, I went home for a weekend expecting to do a triathlon Saturday. Instead, Monday morning I called Hugh to tell him I was going into surgery and I likely wouldn’t be back in the office for weeks. I spent the next 8 months dealing with surgeries and chemotherapy battling ovarian cancer. Being part of IPP kept me focused on more than myself and was a key motivation in my recovery.
There were pains in program implementation and bureaucracy. My interest in working for the government soured after watching the IPP program we built be weakened and depleted. I saw the worst that goes on in government with people who are more concerned about themselves than about being a small player in a much greater effort. I learned a great deal about commercializing and starting businesses. Going through this interview has been a walk down memory lane. For the most part, I am grateful to have had those experiences.
My biggest disappointment is that Russia settled into an authoritarian regime.
SH: So tell me, what I would take away from that is regardless of the ups and downs of IPP and your interactions with them, your sense is you were there during a period where, literally, the world could go down the hill - and it didn't; and you take some pride that you played a role in the fact that the world didn’t go to hell. So is that sort of a way?
MC: Yes. If the US had not made the effort that we did to support the weapons institutes and Russia in the 1990s, there is no shortage of scenarios that could have occurred in terms of nuclear accidents, materials trade, terrorism and possibly more. Russia and many former Soviet Republics suffered so much financially in the 1990s and that could have manifested in major disaster. We got in there and immediately offered hope then solutions. I think about what Louie Rosen pushed for way back in the 80s - if we're going to solve our biggest global problems, we have to do it together. We're still not there yet in terms of solving problems for the better of humanity, but we have proved we are capable of working together to make money.
SH: I think that is a very good way to look from where you came from; with your background, your concerns, and now looking back. Yeah, we haven't solved those problems. We did get through the hard times and there were actually some connections made that could help us if we would get back on some saner path than what we have.
MC: In the end, it’s about communication. We're connected now in many ways. It never occurs to me if I hire a Russian software developer that there's something odd about that. I don’t hesitate to connect to a Russian friend or colleague on social media. I have so many people in my life who are Russian. The Millennials and Gen Z don’t remember or were not alive during the Cold War. The current issues surrounding fake news, hacking, etc. are threatening, but in a different way. We will continue to evolve from where we are now to a better situation between the US and Russia as new generations gain governance and global challenges continue to weigh more heavily on the entire world than within our current grievances.