Itek
Encyclopedia
Itek Corporation was a US
defense contractor
that initially specialized in the field of camera systems for spy satellite
s. In the early 1960s they built a conglomerate
in a fashion similar to LTV
or Litton
, during which time they developed the first CAD system and explored optical disk technology. These efforts were ultimately unsuccessful, and the company shed divisions to various companies, returning to its roots in the reconnaissance market. The remaining portions were eventually purchased by Litton in 1983, and then Hughes, Raytheon, and Goodrich Corporation.
's European division, and started writing about the "Open Skies
" proposal, which he strongly supported.
Open Skies proposed to allow any signing nation to overfly any other, which Leghorn believed would lower international tensions by allowing countries to verify the actions of their adversaries. Eisenhower raised the issue at the 1955 Geneva summit meetings as a way to reduce mutual fears of a surprise attack. At the time, the US would have had a huge advantage if Open Skies was adopted, as their numerous European and Asian airbases would allow them access to the Soviet heartland, while the lack of USSR bases in the Americas - this being prior to the Cuban Revolution
- would have made the treaty an empty promise. Unsurprisingly, the Soviets opposed Open Skies, something Eisenhower later admitted he fully expected.
While Leghorn's writings on the topic were being widely read, he was secretly informed that the US had already taken him up on his initial proposal, and the US Air Force (and Royal Air Force
) were in the process of flying reconnaissance flights over the USSR. Aware that this would generate vast amounts of photography over long periods of time, Leghorn realized that a major problem would be storing the resulting imagery and allowing it to be easily retrieved for study. Kodak was in the process of introducing its "Minicard" aperture card
product, and Leghorn felt this was a natural solution for the problem. Leghorn felt he could do one better by combining it with machinery dedicated to the task of indexing the information required for reconnaissance. Leghorn contacted his long-time friend Theodore "Teddy" Walkowicz about forming a new company to build such a machine for the Air Force. Walkowicz was an associate of venture capital
ist Laurance Rockefeller
, and eventually secured a seed loan for $600,000 in exchange for a directorship. Leghorn became president of the new company, whose ITEK name was a phonetic short form of "information technology". Since Leghorn formerly worked at Kodak, there is speculation that the company name was an acronym for "I Took Eastman Kodak".
and SR-71.
The CIA quickly informed them of their top secret
CORONA
to produce the first spy satellites, and asked them to bid on the camera systems. Itek returned a design that used a rotating mirror to record panoramic swaths of the ground. Film was delivered from a canister and wrapped around a cylindrical window that allowed the maximum length of film to be used in a single exposure, increasing resolution. The rotation of the mirror was timed to properly account for the movement of the satellite to avoid stretching out the images on-film. The result was a single long photograph showing a "strip" of land. At the time, the CIA had already contracted Fairchild Camera and Instrument
to supply cameras, but Itek's submission was technically superior and won them the contract in March or April 1958. In order to soften the blow, the CIA had Fairchild build the devices until Itek could bring up its own manufacturing capabilities.
Leghorn was upset by the terms of the agreement, and at one point in 1959 issued a "stop work" order on the project in order to change its terms. The CIA quickly acquiesced, although they were spooked by the event. Had Itek lost the CORONA contract, it was highly likely that the company would have collapsed. This possibility so worried the CIA that they arranged a personal meeting between Rockefeller and the CIA's chief of technical development, Richard Bissell
, to inform Rockefeller of the CORONA project and make him aware that national security rested on the company's well-being. Leghorn, he felt, needed direct supervision.
Shortly after winning CORONA, Itek also won the contract for the Air Force's own satellite program, SAMOS
. SAMOS originally envisioned a semi-real-time system that downloaded imagery via an onboard scanner, but later expanded to envision a number of different imaging systems based on a single airframe. One of these, E-5, was a project to provide low-resolution wide-area imagery for mapping purposes, which the Air Force needed to plan ingress routes for their bombers during a hot war. The SAMOS project was eventually abandoned, leaving several of the E-5 cameras in storage at a Lockheed
facility.
. In public the company stated that while their work was classified, they were working in the field of "information management" (some writers have commented that this may be the first use of the term). The real reasons for this growth - the BURPL purchase - remained secret, so on paper it appeared that Itek's information systems were generating huge orders that demanded a large staff. Writers speculated that the military might allow the company to release their work to the public, making the company highly valuable. Over the space of a few months, the value of the stock grew from $2 to $255, triggering a 5-for-1 split.
Using the newly inflated value of their stock, Leghorn started an aggressive diversification effort. In 1960 Leghorn agreed to fund development of a computerized drafting system, EDM
, based on the PDP-1
that had earlier been experimented on at MIT. The same year he arranged a merger with Hermes Electronics (originally Hycon Eastern), makers of various military communications systems. This was followed by the 1961 purchase of Photostat Corp., maker of offset printing systems using Kodak patents. In 1962 he lured Gilbert King away from IBM
, where he had worked on the Automatic Language Translator
and had developed the world's only working optical disk. Meanwhile, work continued on the original archiving system, but the company proved unable to deliver a working product.
Meanwhile none of Itek's purchases turned into commercial successes, and in 1961 Itek reported a $2,500,000 loss. Its stock began to drop, hitting a low of $9.50. In spite of the CIA's warnings, Rockefeller did little to address Leghorn's problems, which grew out of control. Frustrated by Leghorn ignoring the reconnaissance side of the company in favor of the continuing string of information projects, the engineers revolted and demanded that he be removed. Walkowicz brought in Franklin Lindsay, a former CIA operative, to help Leghorn get the company back on track. This effort backfired, as Leghorn was insulted by the effort and refused to cooperate. In May 1962 Leghorn was pushed out in favor of Lindsay, who became Itek's president and CEO.
With Lindsay at the helm, Itek returned to focussing mostly on reconnaissance efforts, although by this point their photocopying machines were starting to become successful as well. As a side-effect of this newfound focus, Lindsay shed a number of Leghorn's acquisitions. The first to go was the EDM project in 1962, which ironically became a profitable division of Control Data as their Digigraphics
system.
By 1964 Lindsay had returned the company to profitability. By this time the CORONA program had overcome its initial failures and turned into an enormous success. Itek would eventually deliver about 200 panoramic cameras for the CORONA program. A further success involved the E-5 cameras originally built for the SAMOS project. In 1961 CORONA delivered low-resolution imagery of a new installation that became known as the "Tallinn line". A debate broke out over their significance; some suggested that it was an antiballistic missile installation using the SA-5 Gammon missile, while others pointed out that the resolution was too low to say anything of the sort. A rush effort started at Lockheed to adapt the E-5 camera to the existing CORONA airframe, resulting in the LANYARD project, today known as the KH-6
"Hexagon". The project was, generally, a failure.
(NRO) in 1961, with the overall mission of ensuring that satellite data was distributed properly, and that the satellite time was not wasted, either by photographing the same area twice, or by allowing an area of interest to be photographed by the first available means. Although the Air Force was able to work within the new environment without any apparent problems, creation of the NRO led to serious political infighting with the CIA.
In 1963 Albert "Bud" Wheelon took over from Bissell as the CIA's chief of technology development. Unlike Bissell, who worked almost entirely with outside contractors, Wheelon started internalizing the process and built up a much larger department. In October 1963 he suggested forming the "Satellite Photography Working Group" to study their current efforts and suggest improvements. Under the new agreements, the NRO was supposed to supply funding for the effort, and on 18 November they agreed. In a following experiment the team attempted to determine the optimal resolution for satellite photography, degrading a series of high-quality photographs in stages to see how much information could be pulled from them at different levels of detail. The results strongly suggested building a new satellite with a 2 foot resolution, something what would not be able to be done by improving the existing CORONA system, which offered 10–25 foot resolution. The NRO declined to offer funding for the satellite, however, so Wheelon arranged funding from its own budget and started the "FULCRUM" effort.
When news of the FULCRUM efforts later found their way to the NRO, a major fight broke out that eventually landed on the desk of Robert McNamara
. NRO was supposed to be in charge of coordinating development, and was at that point funding development of the Air Force's 18-inch resolution design, KH-7
"GAMBIT". Stung by the outcome, the project suffered a further setback when Itek announced that they would no longer work on FULCRUM's camera because of a demand that they felt was unreasonable, although other sources suggested it was the final result of a long stream of demands and design changes coming from the newly-enlarged CIA division. Wheelon retaliated by handing the contract to Perkin-Elmer, which delivered the cameras for what would become the successful KH-9
"HEXAGON", better known as "Big Bird".
There are two different versions of the story of what followed. Richelson states that the NRO quickly handed Itek a contract for their own "S-2" system, a follow-on to the Air Force's troubled SAMOS program. This project had originally selected a Kodak camera, and changed to an Itek design after their FULCRUM announcement. He notes the suggestion that the offer was pre-arranged, in order to deprive the CIA of their camera, and thereby doom the FULCRUM effort. Lewis states that both the FULCRUM and S-2 projects had already been handed to Itek, and it was the internal power struggles between the CIA and NRO that led to Wheelon's stream of demands as punishment for accepting the S2 work. Whatever the story, Itek was no longer the CIA's primary supplier after CORONA and LANYARD ended, allowing Perkin-Elmer to become a major supplier. S-2 was later downgraded.
, who used them both on Project Apollo
for mapping the lunar surface, as well as Project Viking's Mars landers. Later they built the back-up mirror for the Hubble Space Telescope
as well as portions of the Keck Telescope and similar projects.
During the same period, Itek's Graphic Systems division, originally supplying the printing systems, had greatly diversified and remained a
was attempting to diversify their military holdings, and engaged Lehman Brothers
to arrange the purchase of a company specializing in electronic warfare
. Lehman found a number of companies that Litton might be interested in, including Itek, presenting a report on 20 September 1982. In October, Litton started purchasing Itek stock in the market in an effort to gain control of about 4.9% of the common shares before making a friendly takeover offer.
On 23 November the chairmen of the two companies met, and by January 1983 the negotiations had progressed to the point of making a formal offer. At the advice of Lehman Brothers, Litton made an offer of the current market price plus a 50% premium. During this period the value of Itek stock was rising, so Litton had to up their offer on several occasions. Finally, on 12 January 1983, Litton made an offer of $48, which succeeded on 4 March 1983. Itek became Litton's Itek Division, although the Itek Graphic Systems division was sold off in 1985.
In 1986 it was revealed that a Lehman Brothers trader had been purchasing Itek stock during the negotiations, part of a wider insider trading
scandal. Ira Sokolow, part of the Lehman team arranging the Itek purchase, had leaked information about the deal to another Lehman employee, Dennis Levine. They agreed to make insider trades
to drive up the stock price and then split the profits. Levine and other traders at Lehman (either tipped off or simply following Levine's trades) started collecting Itek stock and were thus rewarded with part of the 50% premium when the deal closed.
Litton later sued Lehman, claiming that their purchase would have been at a lower price had the insider trading not occurred. The stock price rose from $26 to $33 during this period, meaning that had the price stayed at $26 a fair offer would have been $39. A lengthy series of court cases followed.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
defense contractor
Defense contractor
A defense contractor is a business organization or individual that provides products or services to a military department of a government. Products typically include military aircraft, ships, vehicles, weaponry, and electronic systems...
that initially specialized in the field of camera systems for spy satellite
Spy satellite
A spy satellite is an Earth observation satellite or communications satellite deployed for military or intelligence applications....
s. In the early 1960s they built a conglomerate
Conglomerate (company)
A conglomerate is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate structure , usually involving a parent company and several subsidiaries. Often, a conglomerate is a multi-industry company...
in a fashion similar to LTV
Ling-Temco-Vought
Ling-Temco-Vought was a large U.S. conglomerate which existed from 1969 to 2000. At its peak, its component parts were involved in the aerospace industry, electronics, steel manufacturing, sporting goods, the airline industry, meat packing, car rentals and pharmaceuticals, among other...
or Litton
Litton Industries
Named after inventor Charles Litton, Sr., Litton Industries was a large defense contractor in the United States, bought by the Northrop Grumman Corporation in 2001.-History:...
, during which time they developed the first CAD system and explored optical disk technology. These efforts were ultimately unsuccessful, and the company shed divisions to various companies, returning to its roots in the reconnaissance market. The remaining portions were eventually purchased by Litton in 1983, and then Hughes, Raytheon, and Goodrich Corporation.
Beginnings
Richard Leghorn was a former US Air Force aerial reconnaissance expert who had first proposed flying reconnaissance missions over enemy territory in peacetime. Leghorn left the Air Force to become head of Eastman KodakEastman Kodak
Eastman Kodak Company is a multinational imaging and photographic equipment, materials and services company headquarted in Rochester, New York, United States. It was founded by George Eastman in 1892....
's European division, and started writing about the "Open Skies
Treaty on Open Skies
The Treaty on Open Skies entered into force on January 1, 2002, and currently has 34 States Parties. It establishes a program of unarmed aerial surveillance flights over the entire territory of its participants...
" proposal, which he strongly supported.
Open Skies proposed to allow any signing nation to overfly any other, which Leghorn believed would lower international tensions by allowing countries to verify the actions of their adversaries. Eisenhower raised the issue at the 1955 Geneva summit meetings as a way to reduce mutual fears of a surprise attack. At the time, the US would have had a huge advantage if Open Skies was adopted, as their numerous European and Asian airbases would allow them access to the Soviet heartland, while the lack of USSR bases in the Americas - this being prior to the Cuban Revolution
Cuban Revolution
The Cuban Revolution was an armed revolt by Fidel Castro's 26th of July Movement against the regime of Cuban dictator Fulgencio Batista between 1953 and 1959. Batista was finally ousted on 1 January 1959, and was replaced by a revolutionary government led by Castro...
- would have made the treaty an empty promise. Unsurprisingly, the Soviets opposed Open Skies, something Eisenhower later admitted he fully expected.
While Leghorn's writings on the topic were being widely read, he was secretly informed that the US had already taken him up on his initial proposal, and the US Air Force (and Royal Air Force
Royal Air Force
The Royal Air Force is the aerial warfare service branch of the British Armed Forces. Formed on 1 April 1918, it is the oldest independent air force in the world...
) were in the process of flying reconnaissance flights over the USSR. Aware that this would generate vast amounts of photography over long periods of time, Leghorn realized that a major problem would be storing the resulting imagery and allowing it to be easily retrieved for study. Kodak was in the process of introducing its "Minicard" aperture card
Aperture card
An aperture card is a type of punched card with a cut-out window into which a chip of microfilm is mounted. Such a card is used for archiving or for making multiple inexpensive copies of a document for ease of distribution...
product, and Leghorn felt this was a natural solution for the problem. Leghorn felt he could do one better by combining it with machinery dedicated to the task of indexing the information required for reconnaissance. Leghorn contacted his long-time friend Theodore "Teddy" Walkowicz about forming a new company to build such a machine for the Air Force. Walkowicz was an associate of venture capital
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
ist Laurance Rockefeller
Laurance Rockefeller
Laurance Spelman Rockefeller was a venture capitalist, financier, philanthropist, a major conservationist and a prominent third-generation member of the Rockefeller family. He was the fourth child of John D. Rockefeller, Jr. and brother to John D...
, and eventually secured a seed loan for $600,000 in exchange for a directorship. Leghorn became president of the new company, whose ITEK name was a phonetic short form of "information technology". Since Leghorn formerly worked at Kodak, there is speculation that the company name was an acronym for "I Took Eastman Kodak".
CORONA
Only weeks after the company formed in late 1957, Leghorn took it in an entirely different direction by purchasing the Boston University Physical Research Laboratory (BUPRL), which researched reconnaissance cameras. BURPL was designing the HYAC-1 camera for the USAF's reconnaissance balloon efforts, cameras that would eventually fly on the WS-461L balloons during 1957. Now at Itek, the company won contracts for similar cameras for aircraft like the U-2Lockheed U-2
The Lockheed U-2, nicknamed "Dragon Lady", is a single-engine, very high-altitude reconnaissance aircraft operated by the United States Air Force and previously flown by the Central Intelligence Agency . It provides day and night, very high-altitude , all-weather intelligence gathering...
and SR-71.
The CIA quickly informed them of their top secret
Top Secret
Top Secret generally refers to the highest acknowledged level of classified information.Top Secret may also refer to:- Film and television :* Top Secret , a British comedy directed by Mario Zampi...
CORONA
Corona (satellite)
The Corona program was a series of American strategic reconnaissance satellites produced and operated by the Central Intelligence Agency Directorate of Science & Technology with substantial assistance from the U.S. Air Force...
to produce the first spy satellites, and asked them to bid on the camera systems. Itek returned a design that used a rotating mirror to record panoramic swaths of the ground. Film was delivered from a canister and wrapped around a cylindrical window that allowed the maximum length of film to be used in a single exposure, increasing resolution. The rotation of the mirror was timed to properly account for the movement of the satellite to avoid stretching out the images on-film. The result was a single long photograph showing a "strip" of land. At the time, the CIA had already contracted Fairchild Camera and Instrument
Fairchild Camera and Instrument
Fairchild Camera and Instrument Corporation was a company founded by Sherman Fairchild. It was based on the East Coast of the United States, and provided research and development for flash photography equipment...
to supply cameras, but Itek's submission was technically superior and won them the contract in March or April 1958. In order to soften the blow, the CIA had Fairchild build the devices until Itek could bring up its own manufacturing capabilities.
Leghorn was upset by the terms of the agreement, and at one point in 1959 issued a "stop work" order on the project in order to change its terms. The CIA quickly acquiesced, although they were spooked by the event. Had Itek lost the CORONA contract, it was highly likely that the company would have collapsed. This possibility so worried the CIA that they arranged a personal meeting between Rockefeller and the CIA's chief of technical development, Richard Bissell
Richard Bissell
Richard Bissell may refer to:*Richard M. Bissell Jr. , CIA Director for Plans*Richard Pike Bissell , author/playwright...
, to inform Rockefeller of the CORONA project and make him aware that national security rested on the company's well-being. Leghorn, he felt, needed direct supervision.
Shortly after winning CORONA, Itek also won the contract for the Air Force's own satellite program, SAMOS
Samos (satellite)
The Samos E or SAMOS program was a relatively short-lived series of reconnaissance satellites for the United States in the early 1960s, also used as a cover for the intitial development of the KH-7 Gambit system...
. SAMOS originally envisioned a semi-real-time system that downloaded imagery via an onboard scanner, but later expanded to envision a number of different imaging systems based on a single airframe. One of these, E-5, was a project to provide low-resolution wide-area imagery for mapping purposes, which the Air Force needed to plan ingress routes for their bombers during a hot war. The SAMOS project was eventually abandoned, leaving several of the E-5 cameras in storage at a Lockheed
Lockheed Corporation
The Lockheed Corporation was an American aerospace company. Lockheed was founded in 1912 and later merged with Martin Marietta to form Lockheed Martin in 1995.-Origins:...
facility.
Diversification efforts
After winning the CORONA contract, Itek quickly grew from the executive staff to a company employing over a hundred scientists, engineers, and technicians. After only a year its revenues were in the millions, and the company started the process of raising an initial public offeringInitial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
. In public the company stated that while their work was classified, they were working in the field of "information management" (some writers have commented that this may be the first use of the term). The real reasons for this growth - the BURPL purchase - remained secret, so on paper it appeared that Itek's information systems were generating huge orders that demanded a large staff. Writers speculated that the military might allow the company to release their work to the public, making the company highly valuable. Over the space of a few months, the value of the stock grew from $2 to $255, triggering a 5-for-1 split.
Using the newly inflated value of their stock, Leghorn started an aggressive diversification effort. In 1960 Leghorn agreed to fund development of a computerized drafting system, EDM
Digigraphics
Digigraphics was one of the first graphical computer aided design systems to go on sale. Originally developed at Itek on the PDP-1 as EDM , the efforts were purchased by Control Data Corporation and ported to their machines, along with a new graphics terminal to support it...
, based on the PDP-1
PDP-1
The PDP-1 was the first computer in Digital Equipment Corporation's PDP series and was first produced in 1960. It is famous for being the computer most important in the creation of hacker culture at MIT, BBN and elsewhere...
that had earlier been experimented on at MIT. The same year he arranged a merger with Hermes Electronics (originally Hycon Eastern), makers of various military communications systems. This was followed by the 1961 purchase of Photostat Corp., maker of offset printing systems using Kodak patents. In 1962 he lured Gilbert King away from IBM
IBM
International Business Machines Corporation or IBM is an American multinational technology and consulting corporation headquartered in Armonk, New York, United States. IBM manufactures and sells computer hardware and software, and it offers infrastructure, hosting and consulting services in areas...
, where he had worked on the Automatic Language Translator
Automatic Language Translator
IBM's Automatic Translator was a machine translation system that converted Russian documents into English. The Translator used an optical disk that stored 170,000 word-for-word and statement-for-statement translations and a custom computer to look them up at high speed...
and had developed the world's only working optical disk. Meanwhile, work continued on the original archiving system, but the company proved unable to deliver a working product.
Meanwhile none of Itek's purchases turned into commercial successes, and in 1961 Itek reported a $2,500,000 loss. Its stock began to drop, hitting a low of $9.50. In spite of the CIA's warnings, Rockefeller did little to address Leghorn's problems, which grew out of control. Frustrated by Leghorn ignoring the reconnaissance side of the company in favor of the continuing string of information projects, the engineers revolted and demanded that he be removed. Walkowicz brought in Franklin Lindsay, a former CIA operative, to help Leghorn get the company back on track. This effort backfired, as Leghorn was insulted by the effort and refused to cooperate. In May 1962 Leghorn was pushed out in favor of Lindsay, who became Itek's president and CEO.
With Lindsay at the helm, Itek returned to focussing mostly on reconnaissance efforts, although by this point their photocopying machines were starting to become successful as well. As a side-effect of this newfound focus, Lindsay shed a number of Leghorn's acquisitions. The first to go was the EDM project in 1962, which ironically became a profitable division of Control Data as their Digigraphics
Digigraphics
Digigraphics was one of the first graphical computer aided design systems to go on sale. Originally developed at Itek on the PDP-1 as EDM , the efforts were purchased by Control Data Corporation and ported to their machines, along with a new graphics terminal to support it...
system.
By 1964 Lindsay had returned the company to profitability. By this time the CORONA program had overcome its initial failures and turned into an enormous success. Itek would eventually deliver about 200 panoramic cameras for the CORONA program. A further success involved the E-5 cameras originally built for the SAMOS project. In 1961 CORONA delivered low-resolution imagery of a new installation that became known as the "Tallinn line". A debate broke out over their significance; some suggested that it was an antiballistic missile installation using the SA-5 Gammon missile, while others pointed out that the resolution was too low to say anything of the sort. A rush effort started at Lockheed to adapt the E-5 camera to the existing CORONA airframe, resulting in the LANYARD project, today known as the KH-6
KH-6
Codenamed Lanyard, the KH-6 was the unsuccessful first attempt to develop and deploy a high-resolution optical reconnaissance satellite by the United States National Reconnaissance Office. Launches and launch attempts spanned the period from March to July 1963. The project was quickly put together...
"Hexagon". The project was, generally, a failure.
Formation of the NRO
Both the CIA and Air Force continued development of new satellite systems, which led to concerns about the proper use of these extremely valuable, and expensive, resources. These concerns eventually led to the formation of the National Reconnaissance OfficeNational Reconnaissance Office
The National Reconnaissance Office , located in Chantilly, Virginia, is one of the 16 U.S. intelligence agencies. It designs, builds, and operates the spy satellites of the United States government.-Mission:...
(NRO) in 1961, with the overall mission of ensuring that satellite data was distributed properly, and that the satellite time was not wasted, either by photographing the same area twice, or by allowing an area of interest to be photographed by the first available means. Although the Air Force was able to work within the new environment without any apparent problems, creation of the NRO led to serious political infighting with the CIA.
In 1963 Albert "Bud" Wheelon took over from Bissell as the CIA's chief of technology development. Unlike Bissell, who worked almost entirely with outside contractors, Wheelon started internalizing the process and built up a much larger department. In October 1963 he suggested forming the "Satellite Photography Working Group" to study their current efforts and suggest improvements. Under the new agreements, the NRO was supposed to supply funding for the effort, and on 18 November they agreed. In a following experiment the team attempted to determine the optimal resolution for satellite photography, degrading a series of high-quality photographs in stages to see how much information could be pulled from them at different levels of detail. The results strongly suggested building a new satellite with a 2 foot resolution, something what would not be able to be done by improving the existing CORONA system, which offered 10–25 foot resolution. The NRO declined to offer funding for the satellite, however, so Wheelon arranged funding from its own budget and started the "FULCRUM" effort.
When news of the FULCRUM efforts later found their way to the NRO, a major fight broke out that eventually landed on the desk of Robert McNamara
Robert McNamara
Robert Strange McNamara was an American business executive and the eighth Secretary of Defense, serving under Presidents John F. Kennedy and Lyndon B. Johnson from 1961 to 1968, during which time he played a large role in escalating the United States involvement in the Vietnam War...
. NRO was supposed to be in charge of coordinating development, and was at that point funding development of the Air Force's 18-inch resolution design, KH-7
KH-7
Codenamed Gambit, the KH-7 was a reconnaissance satellite used by the United States from July 1963 to June 1967. Like the older CORONA system, it acquired imagery intelligence by taking photographs and returning the undeveloped film to earth. It achieved a typical ground-resolution of to...
"GAMBIT". Stung by the outcome, the project suffered a further setback when Itek announced that they would no longer work on FULCRUM's camera because of a demand that they felt was unreasonable, although other sources suggested it was the final result of a long stream of demands and design changes coming from the newly-enlarged CIA division. Wheelon retaliated by handing the contract to Perkin-Elmer, which delivered the cameras for what would become the successful KH-9
Big Bird (satellite)
KH-9 HEXAGON, commonly known as Big Bird, was a series of photographic reconnaissance satellites launched by the United States between 1971 and 1986. Of twenty launch attempts by the United States Air Force, all but one were successful. Photographic film aboard Big Bird was sent back to Earth in...
"HEXAGON", better known as "Big Bird".
There are two different versions of the story of what followed. Richelson states that the NRO quickly handed Itek a contract for their own "S-2" system, a follow-on to the Air Force's troubled SAMOS program. This project had originally selected a Kodak camera, and changed to an Itek design after their FULCRUM announcement. He notes the suggestion that the offer was pre-arranged, in order to deprive the CIA of their camera, and thereby doom the FULCRUM effort. Lewis states that both the FULCRUM and S-2 projects had already been handed to Itek, and it was the internal power struggles between the CIA and NRO that led to Wheelon's stream of demands as punishment for accepting the S2 work. Whatever the story, Itek was no longer the CIA's primary supplier after CORONA and LANYARD ended, allowing Perkin-Elmer to become a major supplier. S-2 was later downgraded.
Through the 1970s
Into this void came a number of different projects. One of these was the KA-80 "Optical Bar Camera" that flew on both the U-2 and SR-71, as well as a further development of the mapping camera from SAMOS/LANYARD that was used on some of the Big Birds. Itek also found a customer for their panoramic cameras with NASANASA
The National Aeronautics and Space Administration is the agency of the United States government that is responsible for the nation's civilian space program and for aeronautics and aerospace research...
, who used them both on Project Apollo
Project Apollo
The Apollo program was the spaceflight effort carried out by the United States' National Aeronautics and Space Administration , that landed the first humans on Earth's Moon. Conceived during the Presidency of Dwight D. Eisenhower, Apollo began in earnest after President John F...
for mapping the lunar surface, as well as Project Viking's Mars landers. Later they built the back-up mirror for the Hubble Space Telescope
Hubble Space Telescope
The Hubble Space Telescope is a space telescope that was carried into orbit by a Space Shuttle in 1990 and remains in operation. A 2.4 meter aperture telescope in low Earth orbit, Hubble's four main instruments observe in the near ultraviolet, visible, and near infrared...
as well as portions of the Keck Telescope and similar projects.
During the same period, Itek's Graphic Systems division, originally supplying the printing systems, had greatly diversified and remained a
Litton purchase
In 1982 Litton IndustriesLitton Industries
Named after inventor Charles Litton, Sr., Litton Industries was a large defense contractor in the United States, bought by the Northrop Grumman Corporation in 2001.-History:...
was attempting to diversify their military holdings, and engaged Lehman Brothers
Lehman Brothers
Lehman Brothers Holdings Inc. was a global financial services firm. Before declaring bankruptcy in 2008, Lehman was the fourth largest investment bank in the USA , doing business in investment banking, equity and fixed-income sales and trading Lehman Brothers Holdings Inc. (former NYSE ticker...
to arrange the purchase of a company specializing in electronic warfare
Electronic warfare
Electronic warfare refers to any action involving the use of the electromagnetic spectrum or directed energy to control the spectrum, attack an enemy, or impede enemy assaults via the spectrum. The purpose of electronic warfare is to deny the opponent the advantage of, and ensure friendly...
. Lehman found a number of companies that Litton might be interested in, including Itek, presenting a report on 20 September 1982. In October, Litton started purchasing Itek stock in the market in an effort to gain control of about 4.9% of the common shares before making a friendly takeover offer.
On 23 November the chairmen of the two companies met, and by January 1983 the negotiations had progressed to the point of making a formal offer. At the advice of Lehman Brothers, Litton made an offer of the current market price plus a 50% premium. During this period the value of Itek stock was rising, so Litton had to up their offer on several occasions. Finally, on 12 January 1983, Litton made an offer of $48, which succeeded on 4 March 1983. Itek became Litton's Itek Division, although the Itek Graphic Systems division was sold off in 1985.
In 1986 it was revealed that a Lehman Brothers trader had been purchasing Itek stock during the negotiations, part of a wider insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
scandal. Ira Sokolow, part of the Lehman team arranging the Itek purchase, had leaked information about the deal to another Lehman employee, Dennis Levine. They agreed to make insider trades
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
to drive up the stock price and then split the profits. Levine and other traders at Lehman (either tipped off or simply following Levine's trades) started collecting Itek stock and were thus rewarded with part of the 50% premium when the deal closed.
Litton later sued Lehman, claiming that their purchase would have been at a lower price had the insider trading not occurred. The stock price rose from $26 to $33 during this period, meaning that had the price stayed at $26 a fair offer would have been $39. A lengthy series of court cases followed.
Hughes, Raytheon, and Goodrich purchase
Litton downsized dramatically in the 1990s, selling off many of its components. In 1996 Hughes Electronics purchased what was then left of Itek, Itek Optical Systems. At the time they announced that Itek's own facilities in Lexington, MA and fold it into their own Hughes Danbury Optical Systems in Danbury, CT. Later in the 1990s, after Raytheon's purchase of Hughes, ITEK became Raytheon Optical Systems Company. In early 2000, Raytheon divested the Optical Systems group and it was purchased by Goodrich Corporation, and is currently Goodrich ISR Systems, head-quartered in Westford, MA.Further reading
- A.W. Tyler, W.C. Myers and J.W. Kuipers, "The Application of the Kodak Minicard System to Problems of Documentation", American Documentation, 6:1, (January 1955), pp. 18–30
- James Marquardt, "Transparency and Security Competition: Open Skies and America's Cold War Statecraft, 1948-1960", Journal of Cold War Studies, Volume 9 Number 1 (Winter 2007), pp. 55–87