was running out of cash. In August 1989, he signed a teaming agreement with Hughes Aircraft Company, a far larger and richer defense contractor with extensive manufacturing experience. Hughes agreed to help produce the short-range UAV if Leading Systems and its Amber were chosen, and to take charge when the program reached full production. Hughes also agreed to help Karem pursue export sales of his Gnat 750, mainly by guaranteeing bank loans to Leading Systems. Hughes would guarantee up to five million dollars initially and as much as twenty-five million if their team won the short-range UAV contract. The collateral for the loans would be Karemâs companyâlock, stock, and barrel. If Leading Systems later proved unable to repay its borrowings, Hughes could foreclose and take ownership of all physical and intellectual property that didnât belong to the government.
Karem sent the JPO a copy of the teaming agreement on August 17, 1989, the day he and Hughes signed it. Less than a month later, the JPO narrowed the competition for the short-range UAV contracts to the other two competitors.
Stymied once again by the JPO, Karem pinned his hopes on the Gnat 750. Within days of losing the short-range competition, he was in Turkey, then Germany, then Washington, talking with possible export agents and foreign manufacturing partners. A planned Gnat 750 flight in Kuwait on October 20 âwas cancelled by the Kuwaitis when they were told I am an ex-Israeli,â Karem reported to a Hughes official. But he also expressed hope that he could find a Turkish manufacturing partner, and he said that Pakistan, another Muslim nation, had shown some interest in the Gnat 750. He was optimistic that Israel might buy some Gnats as well.
As Karem scrambled to rescue his dreams, Leadings Systems dutifully transferred ownership of his companyâs six Ambers to the JPO as requiredâseven had been built, but one had crashed due to engine failure. Then, knowing the JPO would put the Ambers in storage and forget them, Karem tried to get someone in the armed forces to use them and keep the project alive. With help from his old DARPA sponsor Bob Williams, now an adviser to the U.S. Southern Command in Tampa, Florida, Karem and Hughes proposed that SOCOM, as the command is known, use the Ambers to search out drug traffickers in the jungles of South America. On March 30, 1990, a Hughes official briefed the SOCOM commander and described the idea.
But time was running out. The very same day, the Defense Contract Audit Agency refused to honor a Leading Systems invoice for $1,340,000âa devastating financial blow for Karem, who was near the end of his line of credit. By September 14, Leading Systems owed Hughes almost $5 million and couldnât pay an overdue phone bill of $1.81. In October, Leading Systems filed for bankruptcy. In November the JPO ordered Leading Systems to send the six Ambers it had to Naval Air Weapons Station China Lake, in the western Mojave Desert, to be warehoused. Later that month, the JPO officially terminated the Amber program.
âThey didnât really want our airplane around, and Abe was actually told his airplanes wouldnât see the light of day after that,â Pace recalled sadly years later. âAnd true to their word, they took our airplanes and sealed them up, shipped them to China Lake ⦠They had six perfectly flyable airplanes. They closed down our support contract and drove us out of business.â
*Â Â Â *Â Â Â *
Ira Kuhn, the physicist and advanced technologies consultant who had served as a conduit for DARPA to fund the Albatross when Karem was working in his garage, wanted to help Abe, and not just for friendshipâs sake. Kuhn had never taken money from Karem, nor had a financial interest in his projects, and he never would. But after more than a decade of association, Kuhn firmly believed, as he was fond of telling others, that Karem was a ânational
Karem sent the JPO a copy of the teaming agreement on August 17, 1989, the day he and Hughes signed it. Less than a month later, the JPO narrowed the competition for the short-range UAV contracts to the other two competitors.
Stymied once again by the JPO, Karem pinned his hopes on the Gnat 750. Within days of losing the short-range competition, he was in Turkey, then Germany, then Washington, talking with possible export agents and foreign manufacturing partners. A planned Gnat 750 flight in Kuwait on October 20 âwas cancelled by the Kuwaitis when they were told I am an ex-Israeli,â Karem reported to a Hughes official. But he also expressed hope that he could find a Turkish manufacturing partner, and he said that Pakistan, another Muslim nation, had shown some interest in the Gnat 750. He was optimistic that Israel might buy some Gnats as well.
As Karem scrambled to rescue his dreams, Leadings Systems dutifully transferred ownership of his companyâs six Ambers to the JPO as requiredâseven had been built, but one had crashed due to engine failure. Then, knowing the JPO would put the Ambers in storage and forget them, Karem tried to get someone in the armed forces to use them and keep the project alive. With help from his old DARPA sponsor Bob Williams, now an adviser to the U.S. Southern Command in Tampa, Florida, Karem and Hughes proposed that SOCOM, as the command is known, use the Ambers to search out drug traffickers in the jungles of South America. On March 30, 1990, a Hughes official briefed the SOCOM commander and described the idea.
But time was running out. The very same day, the Defense Contract Audit Agency refused to honor a Leading Systems invoice for $1,340,000âa devastating financial blow for Karem, who was near the end of his line of credit. By September 14, Leading Systems owed Hughes almost $5 million and couldnât pay an overdue phone bill of $1.81. In October, Leading Systems filed for bankruptcy. In November the JPO ordered Leading Systems to send the six Ambers it had to Naval Air Weapons Station China Lake, in the western Mojave Desert, to be warehoused. Later that month, the JPO officially terminated the Amber program.
âThey didnât really want our airplane around, and Abe was actually told his airplanes wouldnât see the light of day after that,â Pace recalled sadly years later. âAnd true to their word, they took our airplanes and sealed them up, shipped them to China Lake ⦠They had six perfectly flyable airplanes. They closed down our support contract and drove us out of business.â
*Â Â Â *Â Â Â *
Ira Kuhn, the physicist and advanced technologies consultant who had served as a conduit for DARPA to fund the Albatross when Karem was working in his garage, wanted to help Abe, and not just for friendshipâs sake. Kuhn had never taken money from Karem, nor had a financial interest in his projects, and he never would. But after more than a decade of association, Kuhn firmly believed, as he was fond of telling others, that Karem was a ânational
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