Branson: Behind the Mask Read online

  Homans had become a Branson zealot. After reading about the rocket’s success in the Mojave and watching Branson’s video promotion of Virgin Galactic, Homans had found a hero. ‘New Mexico’, he had told Richardson in 2004, ‘should aim for the gold standard of the commercial space industry – and that’s Richard Branson.’ Listing the names of other states that had been enriched by the space and aviation industries, Homans described Branson’s space venture as New Mexico’s ‘biggest economic opportunity for decades. We can’t afford to pass it up.’ If Virgin Galactic moved to New Mexico, Homans told Richardson, he would create over 3,000 new jobs and, according to one study, earn the state about $750 million by 2020. Richardson soon shared Homans’s idolatry of Branson. The visionary, they agreed, should be lured to their desolate state.

  Like dozens of ideas that arrived at Virgin’s headquarters in Hammersmith, west London, the message from Rick Homans was discarded with little thought. Ignoring the rebuff, Homans flew to London to meet Will Whitehorn. Instead, he was greeted by Alex Tai, a Virgin Atlantic pilot who ranked among the headquarters’ gofers. ‘Will’s not available,’ Tai told Homans. ‘They’re not taking me seriously,’ Homans realised. Ninety minutes later, Tai understood what Homans was offering: nothing less than an airport dedicated to Virgin Galactic. The mood changed. ‘Hang on a moment,’ said Tai. Ten minutes later, he reappeared with Whitehorn.

  Whitehorn knew that SpaceShipTwo could easily take off from Mojave, but the desert runway lacked glamour. Branson wanted a prestigious structure to entice more punters to buy a $200,000 ticket. At the end of two hours’ conversation, Whitehorn declared, ‘New Mexico is where Virgin was always destined to be.’ Homans returned to Santa Fe with a two-page memorandum of understanding outlining New Mexico’s agreement to build an airport for Virgin’s exclusive use.

  Naturally, Branson sought a better offer. Early in 2005, along with Burt Rutan and Stu Witt, he visited Arnold Schwarzenegger in his office in Sacramento. The three asked California’s governor to finance the construction of a special facility in Mojave. Branson’s request was not unusual. His philosophy was clear: others always paid. Stu Witt was shocked by the negative reception: ‘We were met with, “Hey, what brings you guys here?” It was cold. Incentives, we were told, are a race to the bottom. Branson wanted to bring $300 million to the state, and he was greeted with such arrogance.’ Rutan agreed: ‘California lost an incredible opportunity. The governor didn’t understand it. And they let that opportunity get away with a smile on their faces.’

  Soon after, Whitehorn called Homans. ‘Richard’s on. He wants to seal the deal with Governor Richardson.’ Branson was a master of identifying men with either hope or money. Governor Richardson had both. ‘Yeah!’ exclaimed the governor in November, blessing Branson’s generosity for planting the Virgin flag in the desert, forty-five miles north-east of Las Cruces, the nearest town. ‘Richard is tying his brand to New Mexico’s promises,’ cheered Homans, echoing Virgin-speak.

  Two weeks later, in December 2005, Homans flew to London to unveil their agreement – by then over 400 pages long – in front of an audience at London’s Science Museum. The New Mexican government, Homans revealed, would sign a twenty-year lease with Virgin Galactic to use the airport. Three thousand eight hundred people from 126 countries, he repeated from Virgin’s script, had paid a deposit for a seat on the spaceship. One hundred, he continued, with Whitehorn’s nodding agreement, had paid the full $200,000 for flights beginning in 2008 or early 2009. No one seemed to notice that the take-off date had slipped, or at least no one appeared to care. And no one questioned the exaggerated statistics about the rocket’s abilities and timetable. The unpublished detail of the contract reflected Branson’s tough negotiation and his optimism. Once the runway and the terminals were completed, Virgin would pay only $1.63 million in rent annually, plus a sliding scale of fees for each take-off.

  Virgin Galactic had committed itself to launching a minimum of 104 flights in 2010 – two a week – carrying a minimum of 592 passengers annually. By 2015, Virgin assumed there would be at least 720 flights per year – two every day – carrying 4,104 passengers. The company would employ at least 174 local staff. Other clauses minimised Virgin’s liability if the rocket did not use the new airport.

  Homans flew from London to Los Angeles to meet Branson. The tycoon arrived from Australia and then crossed the city to an airport used by executive planes. Homans was waiting there with the governor’s jet and the actress Victoria Principal, Branson’s mascot for Virgin Galactic. Branson himself was in ‘ensnaring mode’. He intended to effusively lard his commitment to Richardson with praise, making it nearly impossible for the politician to abandon the $200 million project. Not that Richardson had any doubts. On the flight south, Homans wrote Branson’s speech, filling it with flattery for Richardson.

  ‘Where is this place we’re heading to?’ asked Branson.

  ‘Nearest small settlement is Truth or Consequences,’ replied Homans, referring to a godforsaken strip named after a 1950s TV game show.

  After they had transferred to a helicopter in Santa Fe, Homans told Branson through the headphones they were all wearing, ‘We need a name for the airport.’ Branson gazed wearily out of the window as Homans thought, ‘This is the world’s best marketing and branding man. He’ll have the best idea.’

  ‘Spaceport America,’ said Branson.

  ‘Great,’ gushed Homans.

  At that moment, Branson leant against the helicopter’s door to catch some sleep. The door flew open. Amid shrieks and shock, and with Branson held by the straps in his seat, the door was hauled back into place.

  The sight after landing in the desert satisfied Branson’s expectations. On a dry plateau 4,300 feet above sea level, not far from where the first atomic bomb had been tested, the governor was waiting to be wooed. Behind him were thirty-five journalists who had been bussed to an obscure exit on the Upham highway. Branson’s appearance in the wilderness was embellished by his opening comment: ‘We’re going where no one has gone before. There’s no model to follow, nothing to copy.’ Richardson looked grateful to be hooked. He would immediately ask the state legislature, he said, for $100 million. The spaceport with launch pads and a giant runway would cover 1,800 acres. ‘We’re expecting 50,000 customers in the first ten years,’ chipped in Branson. Each passenger, he said, would experience a unique view of Earth during six minutes of weightlessness (the media’s reports of the duration always changed). Upping the ante, the governor outlined his bolder ambition: ‘We’ll have a cargo service from New Mexico to Paris taking a couple of hours and there’ll be flights to and from orbital hotels where space fliers could take vacations of cosmic dimensions.’ No one questioned which industries would ship their cargo to New Mexico or which rocket Richardson was speaking about. SpaceShipTwo was not designed to fly through space, and Branson could not afford the billions of dollars it would require to develop such a craft. Those details were irrelevant. All that mattered was Richardson’s timetable dovetailing with Branson’s certainty. After the first flights started in 2007, said Branson, ‘Virgin expects to launch three flights a day from the spaceport by 2010. Each flight will carry six passengers.’ The spaceport terminal, he said, would be designed by Lord Rogers, the famous British architect. He was mistaken. Lord Foster, another well-known British designer, was appointed.

  After the ceremony, there was a celebration at a steak house in Santa Fe. ‘Our first job’, Richardson told Branson, ‘is building the road across the desert. Ten miles long.’ Branson smiled. He enjoyed benefiting at other people’s expense. The governor agreed that Branson could fly back to Necker on the state’s jet. ‘I’ll pay for the fuel,’ offered Branson. He was accompanied by Homans, who, after spending the night in Branson’s house, flew back to New Mexico. Not many people, he reflected, enjoyed such intimate moments with the great man and played Scrabble with him and his wife Joan after dinner.

  In Mojave, Stu Witt was irritated. He could not
see why anyone would want to take off from New Mexico rather than taking a helicopter ride from Los Angeles to Mojave airport. But he consoled himself: ‘Branson hasn’t invested a dime in New Mexico, and people will want destinations. They’ll want to go somewhere, not return to the same point.’

  Branson had a spaceport and ticket-holding passengers. He now needed more money to develop the spaceship. Boosted by Burt Rutan’s encouraging reports, he flew in March 2006 to Dubai, a haven of cash-rich sheikhs. Amid the publicity for the start of Virgin Atlantic’s daily flights to the Gulf state, he hoped to persuade the Maktoums, the ruling family, to invest in Virgin Galactic. ‘A number of companies around the world are offering space travel,’ he said, ‘but they haven’t tested and built any spaceships. They certainly haven’t had any test flights into space. Virgin is the only company in the world that has achieved that.’ To embellish Virgin’s victory in space, Branson described his discussions with Robert Bigelow, an American aerospace entrepreneur, about developing inflatable pods so Virgin’s space tourists could stay in ‘a space hotel by the end of the decade’. During the visit to Dubai, he said that Virgin had registered ‘seventy-five fully paid bookings’. The sceptics were dismissed. ‘Personally,’ said Branson, ‘I think there’s a demand for space hotels.’

  One year later, in March 2007, the tempo increased. Selling tickets and rooms in space hotels needed agents, so forty-seven ‘space agents’ associated with the Virtuoso travel network were invited by Virgin to a two-day training course at the Kennedy Space Center in Cape Canaveral. The session started with a slick film. ‘It blew me away,’ Mike Melvill, the pilot, told the viewers as he stepped out of SpaceShipOne. ‘It really did. You really do feel you can reach out and touch the face of God.’ Melvill was followed by George Whitesides, the executive director of the National Space Society. ‘Stephen Hawking plans to hop a flight on Virgin Galactic,’ he said. ‘Virgin Galactic is the private company with the only reusable manned spacecraft that has successfully flown to space and back.’ Virgin Galactic, the travel agents were told, would be taking off on schedule from the spaceport. The agents departed as enthusiasts. They were convinced there were many Americans eager to spend their pocket money on a unique thrill.

  In New Mexico, not everyone was convinced by Governor Richardson’s ‘pay to play’ spaceport or Branson’s promises. ‘This is your classic Old West story of your snake-oil salesman’, scoffed John Grubesic, a member of the New Mexico senate, ‘who comes to the dying town promising to revitalise it. Unfortunately people have bought it, hook, line and sinker.’ But no one had any reason to assume that Branson did not sincerely believe that Scaled could deliver the rocket as promised.

  Soon after, Grubesic resigned from politics in disgust. His isolated protest was ignored. Branson’s trumpeting of Virgin Galactic had forced America’s power brokers finally to recognise the tycoon’s importance.

  3

  The Club

  Al Gore, the former American vice-president, flew to London in his private jet in April 2006 to meet Richard Branson at his home in Holland Park, west London.

  Long before he entered politics, Gore had campaigned about climate change. An Inconvenient Truths his documentary film warning about the imminent catastrophe of global warming, was due to be released the following month. To mount a popular crusade, Gore needed support from influential businessmen, and was persuaded by environmentalists that Branson embodied the ‘can-do’ dream. His newfound celebrity in America had magnified his global fame.

  Until then, Branson had played at the periphery of the green movement. Invited in 2004 to sponsor the launch of the Climate Group at a celebration at the Banqueting House, in London’s Whitehall, attended by Tony Blair, bankers and industrialists, Branson had declined to donate any money and paid only lip service to those classified as ‘mission driven’. In the following two years, the Climate Group had attracted support from HSBC, Starbucks, Google and other global brands. Virgin could no longer afford to ignore the environment.

  ‘This is a wake-up call,’ Gore told Branson during the three hours he spent with him at his Holland Park home, which adjoined another house that served as his office. ‘I’ve got a plan for you. You’re a well-known business leader and you could make more of a difference than almost any other business leader if you do something dramatic and try and get people to pay attention.’ An aviation company, said Gore, needed to be seen as caring for the environment.

  Branson was conscious of his personal vulnerability. In 2002, Virgin Atlantic had rejected the option of two-engined jets, leasing instead four-engined Airbuses, with Branson promoting Virgin’s ‘safe’ planes for transatlantic flights through advertisements on his aircrafts’ fuselages stating, ‘4 Engines 4 Long Haul’. Four years later, Branson recognised his mistake. Four-engined planes polluted more and were not safer. His awakening coincided with the environmental movement focusing on aviation’s greater responsibility for pollution compared to power stations and ground transport. Within thirty years, the campaigners argued, 50 per cent more aircraft would be in the air, yet aviation’s carbon emissions were being reduced by only 1 per cent a year. Many supported taxation and strict carbon allowances on air travel. Banning aircraft was not an option for those environmentalists wary of alienating the public who were keen to holiday in foreign countries. Until Gore arrived, Branson had not addressed the conundrum of profiting from a business that polluted the environment. The question, suggested Gore, was how Branson could pose as the ‘responsible face of aviation on emissions’. Environmentalists, he said, could embrace aircraft and simultaneously campaign for them to reduce their emissions. In a nutshell, continued Gore, Branson’s airline should abandon its boast that ‘Virgin produces less ice cubes’ and show instead how its core decisions were driven by ‘green’ credentials. The latest fashion of corporate self-cleansing had been labelled as ‘greenwashing’.

  Branson found Gore irresistible. Attractive, popular, rich and famous, the politician embodied the qualities Branson admired. He was also offering a solution to a problem. By joining Gore’s campaign, Branson would be introduced into the elite of America’s Democrats, chief among them Bill Clinton. Over the previous year, the former president had positioned himself as an environmental evangelist. Branson spotted an unusual opportunity: by embracing the cause, he could glow and at the same time earn serious money. He was following a recently established path.

  As a normal consequence of the personal relationships between those with political power, in 2004 the Climate Group’s leaders had been introduced by Tony Blair to Clinton and his staff at the Clinton Institute. With Gore’s help, the group had supplied Clinton, a voracious reader, with documentary evidence for the possible ways of avoiding the ‘inevitable’ environmental catastrophe. Once immersed, Clinton developed a passion for ‘green’, combined with a desire to curtail America’s dependence on foreign oil supplies. Global warming, he believed, could be stopped without threatening the American way of life.

  In My Life, the book he published in 2005, Clinton highlighted the importance of billionaires embracing philanthropy. One of the more virtuous ways in which the rich could improve the world, he wrote, was to combat global warming and the constant rise in oil prices by investing in renewable energy. The ideal investment was ethanol manufactured from corn, which, when mixed with petrol, could power cars. The biofuel, wrote Clinton, was a win-win: a tick for American farmers profiting by selling corn to American biofuel manufacturers, and a tick for reducing carbon emissions. Above all, political resistance would be minimal because Americans could still drive their big cars.

  Clinton’s advocacy of ethanol was not entirely philanthropic. ‘Clean technology’ and ‘green’ politics provided a profitable answer to those preaching about ‘peak oil’. In their scenario, the world’s oil supplies were in permanent decline, leading to a future shortage and an irreversible rise in prices. Clinton’s contribution to the debate was called ‘big-footing’. His commitment tilted m
ore to mythology than reality – but he intended to profit from the vogue.

  Since 2002, Clinton had been a paid adviser to Ron Burkle, a Californian who had earned at least $3 billion from supermarkets and was now seeking other investments and political leverage. At Clinton’s behest, Burkle’s company, Yucaipa, had invested in a manufacturer of ethanol from sugar cane. The company’s owner was Vinod Khosla, who co-founded Sun Microsystems in Silicon Valley before selling it for over $1 billion. He was also an early investor in Amazon and Google. Like many other dotcom billionaires, Khosla foresaw renewable fuels as the next multi-billion fortune-maker. ‘We need to declare war on oil,’ he said, advocating renewables as the ‘mainstream solution’ to replace 80 per cent of oil-based energy. If the world failed to heed his prediction, he warned, ‘the planet is history the way we know it today’. Powered by his convincing salesmanship, Khosla had become a friend, political ally and commercial partner of Burkle, Gore and Clinton. Together, the ‘ethanolites’ were promoting the ‘drop-in solution’ to potential investors: ethanol was easy to produce, easy to mix with petrol and, with generous government subsidies, delivered guaranteed profits.

  Branson was introduced to Khosla by the organisers of the Climate Group. Branson’s endorsement of ethanol, the campaigners calculated, would electrify their cause. ‘We need to dispel the notion that we must make a choice between saving the planet and saving money,’ Khosla told him. ‘We must find solutions which are good for the environment and also profitable.’ For Branson, focused on money since his late teens – as he admitted, his agenda ‘was always 99.5 per cent business’ – ‘green’ was an ideal vehicle for new profits. His introduction to Khosla would work out better than the Climate Group had expected.