THE BEAL CONJECTURE

How smart is Andrew Beal? Smart enough to astonish some of the smartest people on earth.

AS A BANKER AND BUSINESSMAN, ANDREW REAL USES HIS NUM-ber-crunching abilities 10 make money. As a mathematician, he puts his number-crunching abilities to another use. “Oh no. No. No. I’m not a mathematician.” says the entrepreneur, and the modesty is sincere. “I’m just a hobbyist. I dabble in number theory.”

Two years ago, Beal stunned the rarefied realm of academic mathematicians by coming up with something none of them had thought of-a numerical puzzle thai has since been dubbed the Beal Conjecture.

He worked on the problem himself, then threw il oui for the world to ponder, offering a prize to whoever can come up with a proof. Beal recently added 25,000 additional incentives to the original \$50.000 award.

The American Mathematical Society, which administers the award. receives about 20 calls each month about the proof. A few of the callers are cranks; many are students-some as young as junior high school age-and the rest are a mixed bag of academics, reporters, and the merely curious.

“This helps stimulate interest and research in this field. It’s at the very cutting edge of mathematical development,” says R. Daniel Mauldin. the University Of North Texas professor who chairs the AMS prize committee. He’s referring to the Beal Conjecture, not the prize money.

Bui the cash incentive is unusual, too. Glory, not greenbacks, is often the only reward for unraveling mathematical mysteries. One famous exception is Fermat’s Last Theorem, a problem posed by French mathematician Pierre de Fermat in the mid-1600s. Fermat was reading a chapter by the ancient Greek math-He bought his first house in the early 1970s with a \$500 deposit and a \$65-a-month mortgage, then rented out the house for \$119 a month. Beal knew a good thing when he saw it. He continued buying houses and eventually added apartment buildings to his real estate holdings. In 1976 he transferred to Baylor in Waco (but never graduated). Three years later, he was in Dallas.

The market was booming, Beal quickly found his way around in Dallas real estate circles. “He has an incredible ability to quickly cut to the chase and see and analyze the key components of any deal,” says longtime friend Steve Houghton, a Dallas real estate developer. Then the savings-;md-loan crash hit Texas. So Beal, of course, started a bank.

“All the other banks were failing. What better time to start a bank?” says Beal. “If everybody else is going broke, thai simply means your competition is going away.” Houghton calls his friend “the consummate contrarian.”

ematician Diophantus on a particular problem in Pythagorean number theory (these problems tend to hang around for a while) when he scribbled next to the text, “I have discovered a truly remarkable proof which this margin is too small to contain.” He died before he could share his proof with anyone, leaving historians and mathematicians baffled for the next 300 years. Gentian physician Paul Wolfskehl. who died in 1906. was so intrigued by the question that he bequeathed 100.000 marks to whoever solved il. selling a deadline of September 12.2007.

Princeton University Professor Andrew Wiles claimed the prize in 1993, but a gap in his reasoning was discovered, so he went back to the drawing board. Two years later, the professor offered a conclusive proof that the equation xn + yn = zn has no non-zero integer solutions for x, y, and z when n is greater than 2. Wiles’ proof, however, is very complicated, and that has left mathematicians wondering whether Fermat’s own proof- the one he didn’t write down-wasn’t much simpler.

Speculating on the same mystery led Beal to a generalization of the Fermai theorem. Beal bcnévê^hatmesoTuTiornonis equation could provide a simpler solution to the Fermat equation. Over the last three centuries, attempts to grapple with the Fermat problem have led to important discoveries in algebra and number analysis. Mauldin says a solution to the Beal Conjecture could have further applications in cryptology. Already, the challenge has forced mathematicians to think in new ways about number theory. More important, though, in Maudlin’s mind, is the mathematical interest the challenge is sparking in young people.

In 1988 ai the age of 35, Beal launched Beal Bank with \$3 million and started buying up defaulted loans from struggling or defunct institutions at bargain basement prices. Il was the clearance safe of a lifetime, the stuff fortunes are made of. “He cherry-picked and bought the good assets and bought them at the lowest price.” says fellow banker Oates. “It was brilliant.”

Within eight years Beal was a multimillionaire, and Beal Bank was among the most profitable banks in Texas.

So when this idea of an aerospace company surfaced in his mind. Beal didn’t hesitate. The Loan Ranger became a Rocket Man. “If you know Andy, you just come to expect these things,” Houghton says.

Though Beal declines (politely, but firmly) to talk about Beal Aerospace’s finances, he will say he is financing the company himself from his “fairly substantial resources,” When he announced the company’s plans for the BA-1 rocket that was eventually scrapped, he said he”d be spending about \$250 million in development. The BA-2 he says now, “is twice as large a rocket, and we’ll leave il at that.”

Beal has built the assembly plant in Frisco, an engine-testing facility in McGregor near Waco, and he has signed an agreement with the tiny Caribbean island of Anguilla for a launch site within its territory.

Beal Aerospace is not the only firm attempting to capitalize on the heavenly commercial launch market. The FAA is in licensing talks with more than a dozen companies, including Beal. But the Frisco start-up is one of only a few that is being taken seriously by the industry. “I think everybody realizes this guy has a vision and the funds to back it up.” says industry analyst Caceres, “The one thing he doesn’t have to worn,’ about is funding. If he wants to lose his money, it’s up to him.”

Some reported rocket rivals are struggling for funding, hoping to score business development aid from the federal or a slate government Others rely on funds from investors who may have high demands for return on investment and a low tolerance for long-term risk. Beal does not have to worry about his funding being yanked, But there are other dangers.

The rocket could fail, the market could fail, or Beal might have made the wrong choice when he went with an expendable rocket over a re-usable one.

Every new launch vehicle developed in the past five years has misfired at least once. The failure last May of a Boeing Delta 3 rocket temporarily put the kibosh on Delta 3 launches and on the launches of three Atlas rockets, which use the same component that failed in the Delta 3. Beal considers the possibility-some say the probability-his rocket will fail with characteristic determination. “If that happens,” he says, “we’ll do failure analysis, then we’ll launch again.”

While he has control over what he will spend to make his rocket successful. Beal has no control over ils potential market. 1999 is a point in case. Industry insiders had expected to exceed last year’s number of commercial space launches, in part because of an ambitious plan by the Iridium consortium 1o sell high-end satellite telephone service. But subscriber rales for the service were drastically below projections, and the consortium has filed for bankruptcy.

What if he’s made the wrong choice about what kind of rocket to build? Some industry people swear by re-usable rockets and think Beal is wasting his lime on what they consider the old-fashioned concept of disposable rockets. “This should be his biggest concern,” says industry analyst Caceres. “In 10 years or so, the demand for re-usable rockets is what’s going to make the market explode. If he doesn’t plan for that, he could be Ief1 behind.” Beal has considered the re-usable rocket-and dismissed it. The way to go. he believes, is offering low-cost access to space, and expendable rockets aie cheaper rockets. If he’s there first, with the lowest price, Beal is convinced he’ll corner the market. And he is well on the way to getting there first. Beal actually has a. rocket that has been test-fired. Many of his competitors have only their dreams and some high-tech drawings.

THE QUESTION REMAINS: WHY WOULD A REASONABLE MAN WITH A personal income of more man \$50 million a year decide to launch a rocket company? The pragmatic facade of the businessman is not a mask, but behind if lurks a space buff.

When Andy Béai turns those laser-beam eyes on you and tells you: one, it’s a mathematical certainty thai an asteroid will hit the earth one day: two, all life will he extinguished; three, the only way to save mankind is to colonize other planets: and lour, he finds it fulfilling to think that Beal Aerospace might play some tiny part in making that happen-well, you believe him.

“I don’t lose sleep over that because it could be a billion years or hundreds of millions of years or lens of millions of years away,” he says. “But the fact is it could be 20 years away. And to the extent that our efforts speed up the colonizing of other planets-you just never know all the implications of efforts like this…. So all the knowledge, all the answers to questions that we don’t even know to ask-all that will be furthered by what we’re doing. And I like that.”

And a lot of people in the industry like Real’s plan. NASA is working with him so he can launch test flights from Cape Canaveral, and the slate of Florida is reportedly putting together a package of financial incentives to gel Beal to do more business in Florida, Last June the organizers of WorldSat ’99 Space & Satellite Finance Conference asked him to be a speaker at the event. (“These are Wall Street money people.” notes Caceres. “They don’t ask just anyone to speak at this thing.”) According to several accounts, Beal was a hit with the insider crowd of industry analysts, Wall Street financiers, and aerospace executives.

Beal has enticed people from most of the top aerospace firms to work for him-Lockheed. Boeing. Thiokol. Orbital Services, even NASA. And he’s convinced the industry to take him seriously. They’re not convinced he’s right, but many of them are beginning to think he might be. “He’s doing pretty well for a Texas millionaire from out of nowhere,” says Eric Stallmer, president of the Space Transportation Association, a national trade organization,

Most importantly, though, Beal has vision and the passion to pursue it.

That is what makes him leave his Highland Park home to make il to his office in Frisco by 7:30 a.m. That’s what makes him slay, often, until 7 or 8 p.m. It’s what makes him cheerfully answer endless questions from prospective employees, industry peers, reporters, and curious friends. It’s what has made him plunk down his own money to play in this race to space. And it’s what has convinced others to share his vision.

The smart money-that is, Beal’s own money, and lots of it-says he’s going to pull this off.