Hughes Aircraft Company

Hughes Aircraft Company, of Culver City, California, was in its early decades a division of the Hughes Tool Company, the holding company of Howard Hughes. It was formed in the spring of 1932 at Glendale, California, after Hughes leased space in a Lockheed Aircraft Corporation hangar in Burbank to rebuild a Boeing pursuit plane; Donald Barlett and James Steele wrote that it began as "nothing more than a glorified machine shop and a set of books." In 1953 Hughes gave the stock of a newly established Hughes Aircraft Company to the Howard Hughes Medical Institute and transferred to it almost all of the original company's operations, more than seventeen thousand employees and all but a few million dollars of more than 200 million dollars in defense contracts; the remainder became the Hughes Tool Company Aircraft Division.¹ In the Delaware litigation over the Howard Hughes Medical Institute, the Court of Chancery recorded that the institute "was funded by the transfer to it of the electronics division" of the Hughes holdings, through the Hughes Aircraft Company, "all of the stock of which latter company has since been held by the Institute."²

The Medical Institute

The institute was incorporated in Delaware on December 17, 1953; on that day its incorporators named Hughes as sole trustee, a position he held until his death on April 5, 1976, and Hughes established an executive committee with such powers as the trustee might designate.² On July 3, 1968, Hughes allegedly caused to be adopted a "Resolution of Trustee" delegating to the executive committee the powers that Delaware law gave the board of a business corporation. After his death without naming a successor, the Delaware attorney general and William R. Lummis, the Delaware ancillary administrator of the estate, sought the appointment of a trustee; Chancellor Marvel's decisions of June 26 and October 26, 1979 addressed whether the institute should be managed by a trustee or by the committee.²³

Jack Parsons, 1949 to 1950

Aerojet's co-founder Jack Parsons told the FBI in a signed statement of September 26, 1950 that he was employed by Hughes Aircraft on May 8, 1949, and that his position was that of group leader in charge of the propellants, propulsion and launching group of the Research and Development laboratories; a Hughes personnel security questionnaire of April 11, 1949 is cited in the same file.⁴ Parsons said that in September 1950 he worked for Hughes Aircraft on a proposed rocket propellant loading plant that Hughes was to build, gathering data on processes and equipment costs, and that since October 1948 he had negotiated with a man in North Hollywood about a position in Israel involving plans for an explosives plant. An FBI teletype recorded that Hughes Aircraft advised the Bureau when his employment ended on September 26, 1950, and that seven California Institute of Technology reports dated 1941 through 1944, relating to Army Air Corps jet propulsion research and marked confidential, had been kept by him in a drawer at Hughes.⁴ The Department of Justice's Criminal Division in January 1951 found that the facts appeared to constitute a violation of 18 U.S.C. 793 and possibly 794; the U.S. Attorney declined prosecution on October 25, 1951.⁴

The preceding decade connected the two companies in another way. Theodore von Kármán wrote that when he and Frank Malina were considering a rocket manufacturing company in early 1942, he took advice from "several friends at Hughes Aircraft," who did not think a rocket company could survive with the government as its sole customer; the group incorporated Aerojet on March 19, 1942.⁵

The 1971 CIA memorandum

A CIA memorandum for the record of May 20, 1971, by a former agency employee who had been introduced to the president of Intertel, states: "Some time in the early 1960's Maheu closed his D. C. office, picked up Hughes as a sole client and moved to Los Angeles. The undersigned is aware of this because he was in touch with him during the period 1962-1964. Simultaneously the undersigned was working out the details of a nonofficial cover arrangement with the Aircraft Division of the Hughes Tool Company in Culver City, California. Mr. Rhea Hopper, Vice President in Charge of the Aircraft Division was the principle cleared witting official. It is doubtful that details of this arrangement ever reached Mr. Hughes himself but because of Maheu's significant role he was cut in as a pickup for insurance. The undersigned did this himself."⁶ The same memorandum records the engagement of Intertel by the Hughes Tool Company to investigate the activities of Robert Maheu, and states that a source ("Pease") said an attorney, Edward P. Morgan, had been "making noises to certain unnamed Hughes Tool Company officials to the effect that they had better take it easy on Maheu because of the past involvement with CIA in covert operations."⁶ The memorandum is classified Secret and was released under the President John F. Kennedy Assassination Records Collection Act on March 18, 2025.⁶

Satellites and the National Reconnaissance Office

The Space Systems Division of Hughes Aircraft built Syncom 2, the first geosynchronous communications satellite, in 1963, and Intelsat I (Early Bird), according to Dwayne Day and Nicholas Watkins in The Space Review (December 21, 2020).⁷ Drawing on a recollection by the Hughes engineer Anthony Iorillo, they report that after Hughes won the Air Force's TACSAT contract it won a classified National Reconnaissance Office contract designated HS-318, probably awarded in 1967, and the Intelsat IV contract; that the HS-318 work was called the "green" program from the color of the badges worn by staff, and that Iorillo described the satellite as "a multi-mission vehicle carrying an electro-optical precision pointed payload and a very wide band ELINT payload with large steerable receive and downlink antennas." Day and Watkins identify HS-318 as JUMPSEAT, the first of which was launched in March 1971 into a Molniya-type orbit.⁸ They state that Hughes vice president and general manager Lawrence "Pat" Hyland was among the officials who chose TACSAT as the target.⁸

General Motors

Effective December 31, 1985, General Motors acquired Hughes and its subsidiaries for 2.7 billion dollars in cash and cash equivalents and 100 million shares of GM Class H common stock, estimated at 2,561.9 million dollars, "which carried certain guarantees"; the purchase price exceeded net book value by 4,244.7 million dollars, of which 500 million was assigned to patents and related technology.⁹ On February 28, 1989 General Motors and the Howard Hughes Medical Institute agreed to terminate GM's guarantee obligations on the institute's Class H holding; the institute received put options at 30 dollars a share for 20 million shares on March 1, 1991, 10 million on March 1, 1992, 10.5 million in 1993 and 15 million in 1995, and exercised the first three, while GM held call options at 35 dollars (37.50 dollars for the last 15 million).⁹ Redemption of the institute's put options cost GM 315.0 million dollars in 1993, 300.0 million in 1992 and 600.0 million in 1991.⁹

Kit Green, who in 1985 left the Central Intelligence Agency after sixteen years, began at General Motors in March 1985, according to his curriculum vitae, as head of Automotive Safety and Health Research at the company's North American Operations Research and Development Center in Warren, Michigan, a post he held until September 1993. The same document lists, among his earlier CIA activities, "Life Science space reconnaissance officer to the national space tasking effort (1969-1979)" and "his work on the Glomar Explorer project" (see Project Azorian); Green wrote the document himself.¹⁰ GM Hughes Electronics Corporation reported a backlog of 13.4 billion dollars in defense and commercial contracts at the end of 1993, and the corporation's annual report counted 33 major plants, offices and research facilities relating to the operations of Hughes Aircraft Company.¹¹

Litigation and investigations under General Motors

In September 1973 Hughes sued the United States in the Court of Claims over the "Williams Patent" on velocity control and orientation of spin-stabilized satellites; in late 1983 the Federal Circuit held the patent valid and infringed by the government, and in 1993 the Court of Claims was still determining compensation and whether additional government satellites infringed.¹² General Motors reported in 1993 that Hughes was cooperating with a federal grand jury investigation in Boston into the delivery and quality of components of two missile guidance systems, and that "Hughes has been advised that it is a target of the investigation."¹² Hughes also faced class actions in Arizona alleging that toxic substances disposed of at a government-owned facility in Tucson, Arizona which Hughes operated under an Air Force contract had migrated into the city's water supply; an earlier settlement (Valenzuela) was funded by insurers with 70.7 million dollars and by Hughes with 13.8 million.¹² In 1992 Hughes acquired the missile business of General Dynamics for 21.5 million shares of Class H stock and 62.8 million dollars in cash.¹²

On January 16, 1997 General Motors and Hughes announced the spin-off of the Hughes defense business to holders of GM stock and its merger with Raytheon Company, the transfer of Delco Electronics to GM's Delphi Automotive Systems, and the recapitalization of Class H stock into a tracking stock for the Hughes telecommunications and space business.¹³ General Motors reported the completion of the transactions on December 17, 1997.¹³

Bill Turner and Danny Casolaro

A Department of Justice document in the INSLAW files describes Bill Turner (William Turner) as having been "an employee of the Hughes Aircraft Corporation" who "apparently had been fired," and states that Turner "was never a 'whistleblower,' as some have described him." It records that Turner claimed to have met Danny Casolaro in the parking lot of Casolaro's hotel in Martinsburg on Friday, August 9, 1991, the afternoon before Casolaro died, that no one witnessed the meeting, that his accounts of the documents involved varied, and that on September 13, 1991 Turner pleaded guilty to a felony count of making a false statement to the Veterans Administration.¹⁴