60 Minutes - 05/21/2023: Defense Spending, Cyber Con Artists, Jeff Koons

Episode Date: May 22, 2023

An investigation exposed that the Pentagon, and taxpayers, get taken advantage of by U.S. defense contractors. Bill Whitaker sits down with a former top contract negotiator who says the accountability system is broken. Cyber con artists are using artificial intelligence, apps and social engineering to scam Americans out of $10 billion dollars a year. Sharyn Alfonsi reports. Famous for his giant sculptures, Jeff Koons holds the record for the highest price ever paid at auction for a work by a living artist. He shares his next big idea with Anderson Cooper. To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices

What's better than a well-marbled ribeye sizzling on the barbecue? A well-marbled ribeye sizzling on the barbecue that was carefully selected by an Instacart shopper and delivered to your door. A well-marbled ribeye you ordered without even leaving the kiddie pool. Whatever groceries your summer calls for, Instacart has you covered. Download the Instacart app and enjoy $0 delivery fees on your first three orders. Service fees, exclusions, and terms apply. Instacart. Grocer $0 delivery fees on your first three orders. Service fees, exclusions, and terms apply. Instacart. Groceries that over-deliver. A 60 Minutes investigation is exposing price gouging at the Pentagon,

and you would be hard-pressed to find a better example than this. This, Bill, is an oil pressure switch that NASA used to buy. Well, their oil switch, with all of the cabling, costs $328. This oil switch, we paid over $10,000 for it. Elizabeth, sorry, need my passport number because the Ukraine trip is on. Can you read that out to me? That's my voice, but that's not me. It's the digital result of a clever hacker and a cheap voice-altering app. Did you think it was me?

Yes. This is one of the scams that are costing American citizens $10 billion a year. And as you'll hear, people over 60 are the main target. It's like a death in the family. Well, she's worked so hard, you know, for my money. I sure have. I believe the first piece was... Jeff Koons is one of the most prominent and polarizing art stars in the world. His creations may look simple, but they can take decades to make and often push the boundaries of technology and sometimes taste.

Critics may scoff at times, but that's nothing new. Jeff Koons has been controversial since he first started showing his art more than 40 years ago. I'm Leslie Stahl. I'm Bill Whitaker. I'm Anderson Cooper. I'm Sharon Alfonsi. I'm John Wertheim. I'm Cecilia Vega. I'm Scott Pelley. Those stories and more tonight on 60 Minutes. Podcasts are great because they help us make the most out of our routine. We learn about the fall of the Ottoman Empire while we drive, keep up with news while we take the dog for a walk,

or turn folding laundry into a comedy show. Make the most out of your time with the PC Insider's World Elite MasterCard, a credit card that can get you unlimited free grocery delivery and the most PC Optimum points on everyday purchases. The PC Insider's World Elite MasterCard, the card for living unlimited. With the U.S. supplying billions of dollars of munitions to Ukraine and growing tensions in the Taiwan Strait, some Pentagon generals are sounding alarms about the dwindling supply of U.S. weapons at a time when the cost of replacing them is skyrocketing.

We wondered why the Pentagon is finding it hard to procure weapons it needs at a price taxpayers can afford. A six-month investigation by 60 Minutes found it has less to do with foreign entanglements than domestic ones, what can only be described as price gouging by U.S. defense contractors. The gouging that takes place is unconscionable. It's unconscionable. Perhaps no one understands the problem better than Shay Assad, now retired after four decades

negotiating weapons deals. In the 1990s, he was executive vice president and chief contract negotiator for defense giant Raytheon. Then he switched sides. Under Presidents George W. Bush, Barack Obama, and Donald Trump, Assad rose to be the Defense Department's most senior and awarded contract negotiator. The Pentagon, he told us, overpays for almost everything. For radar and missiles, helicopters, planes, submarines, down to the nuts and bolts. This, Bill, is an oil pressure switch that NASA used to buy. Well, their oil switch, with all of the cabling, costs $328. This oil switch, we paid over $10,000 for it.

So what accounts for that huge difference? Gouging. What else can account for it? To Assad's former defense industry associates, he was the most hated man in the Pentagon for his dogged scrutiny of their pricing practices. No matter who they are, no matter what company it is, they need to be held accountable. And right now, that accountability system is broken in the Department of Defense. So does that affect our readiness? There's no doubt about it. You just can only buy so much because you only have so much money.

And that's why I say, is it really any different than not giving a Marine enough bullets to put in his clip? It's the same thing. Assad points to the Patriot weapons system, a pillar of air defenses for the U.S., NATO, Ukraine, and Taiwan. In 2015, Assad ordered a review, and Army negotiators discovered Lockheed Martin and its subcontractor Boeing were grossly overcharging the Pentagon and U.S. allies by hundreds of millions of dollars for the Patriots' Pac-3 missiles. And over a seven-year period, these companies just keep raking it in.

What level of profit are we talking about? Well, if the average profitability that was negotiated in a firm fixed price contract was typically between 12% and 15%. So a company could make 12%... That's a good profit. Sure. But Shea Asad told us Pentagon analysts found total profits approached 40%. Based on what they actually made,

we would have received an entire year's worth of missiles for free. An entire year's worth of missiles? We would have got them for free. Boeing declined our request for comment. Lockheed told us, we negotiate with the government in good faith on all our programs. But after the review, the Pentagon negotiated a new contract with the company, saving $550 million. Well, that's how you become the most hated man in the Pentagon, when you say, no, no, no, we're actually going to pay attention to this.

Army negotiators also caught Assad's former employer, Raytheon, making what they called unacceptable profits from the Patriot system by dramatically exaggerating the cost and hours it took to build the radar and ground equipment. You called Raytheon on the carpet? Yes, I did. You know, of course, I reported that information up the chain. But then I went to the inspector general, and I also went to the Defense Criminal Investigative Service. And I said,

I want this looked into. Raytheon told us it is working to equitably resolve the matter. And in 2021, CEO Gregory Hayes informed investors the company would set aside $290 million for probable liability. I will say this is an ongoing investigation by DOJ. We think these were one-off events that occurred, should not have occurred, but they did. One-offs? No, it's not one-off. And it's not one-off with a lot of companies. A Department of Defense study released last month found major contractors flush with tens of billions of Pentagon dollars to hand out to shareholders. We have to have a financially healthy defense industrial base. We all want that. But what we don't want to do is get taken advantage of and hoodwinked. And the U.S. has nowhere else to go. We have nowhere

else to go. For many of these weapons that are being sent over to Ukraine right now, there's only one supplier. And the companies know it. It wasn't always like this. The roots of the problem can be traced to 1993, when the Pentagon, looking to cut costs, urged defense companies to merge. Fifty-one major contractors consolidated to five giants. The landscape has totally changed. In the 80s, there was intense competition amongst a number of companies. And so the government had choices. They had leverage.

We have limited leverage now. The problem was compounded when the Pentagon, in another cost-saving move, cut 130,000 employees whose jobs were to negotiate and oversee defense contracts. The watchdogs in the government. The watchdogs, the negotiators, the engineers, the program managers, over 50% was removed. It was the era of downsizing government, getting government out, let business- Let business do their thing.

It was ultimately a disaster. And the government was complicit. Yes. They were convinced that they could rely on the companies to do what was in the best interests of the warfighters and the taxpayers. The Pentagon granted companies unprecedented leeway to monitor themselves. Instead of saving money, Assad told us the price of almost everything began to rise. In the competitive environment before the companies consolidated, a shoulder-fired Stinger missile cost $25,000 in 1991.

With Raytheon now the sole supplier, it cost more than $400,000 to replace each missile sent to Ukraine. Even accounting for inflation and some improvements, that's a seven-fold increase. Industry's motivations and objectives are different than the Department of Defense's. Retired Air Force Lieutenant General Chris Bogdan spent his career overseeing the purchase of some of the country's most critical weapons systems. They are companies that have to, to survive, make profit. The Department of Defense, on the other hand, wants the best weapon systems it can have as quickly as possible and as inexpensively as possible. Those are opposite ends of the spectrum. But in our system, there's nothing wrong with

profit. No, there isn't. But taken to an extreme, industry may not make the best decisions in the best interests of the government. General Bogdan says we've only begun to feel the full impact. Morning. In 2012, he was tapped to take the reins of the troubled F-35 Joint Strike Fighter program. It was seven years behind schedule and $90 billion over the original estimate. But Bogdan told us the biggest costs are yet to come for support and maintenance, which could end up costing taxpayers $1.3 trillion. We won't be able to buy as many F-35s as we thought, because it doesn't make a whole lot

of sense to buy more airplanes when you can't afford the ones you have. The Pentagon had ceded control of the program to Lockheed Martin. The contractor is delivering the aircraft the Pentagon paid to design and build, but under the contract, Lockheed and its suppliers retain control of design and repair data, the proprietary information needed to fix and upgrade the plane. So you spend billions and billions of dollars to get this plane built, and it doesn't actually belong to the Department of Defense? The weapon system belongs to the department,

but the data underlying the design of the airplane does not. We can't maintain and sustain the planes without Lockheed's... Correct. And that's because we didn't up front either buy or negotiate getting the technical data we needed so that when a part breaks, the DOD can fix it themselves. When a part breaks, it's likely to come from a subcontractor like Transdive, which has seen its stock soar as it buys up companies the military depends on for spare parts. Founder Nick Howley has twice been called before Congress over accusations of price gouging. Shea Assad's review team found the government will pay the company $119 million for parts that should cost $28 million.

Could you sell to the DOD these parts at a lower price and still make a reasonable profit? I don't believe that's the question for us. Transdime told us it follows the law and charges market prices. But in 2006, Shay Asad says Apache helicopters were unable to fly without a crucial valve. Transdime had taken over the manufacturer and hiked the price of the valve by $747, up almost 40 percent. We said, look, we need these parts to go on aircraft that are in Iraq. They simply said, we're not going to ship it until you cough up. To the battlefield. That's correct. This was going to the battlefield.

By 2018, the valve would grow to cost almost $12,000. A Pentagon report called it extortion. In March, the Pentagon announced its largest budget ever, $842 billion. Almost half will go to defense contractors. While contract spending is going up, Pentagon oversight is going down through cuts and attrition. We met with recently retired auditors Julie Smith and Mark Owen and contracting officer Catherine Forsman, who are part of the downsizing. They told us with less oversight and Shay As Assad now gone, the Pentagon is losing the battle to hold down prices. So explain to me, why can't the Department of Defense just step up to Transdime and say, no, we're not going to pay that? Because we don't have another source for a lot of the spares that they provide right now. They are the literally only game in town in order to make an aircraft fly. So we're at their mercy.

Does that make sense to any of you? No. It is very concerning to me. Contractors see that they can do this. They are the ones that hold the power. So it's not really a true capitalistic market because one company is telling you what's going to happen. So if it's not a capitalistic system, what is it? It's a monopoly. Monopoly. If you're happy with companies gouging you

and just looking you right in the eye and say, I'm going to keep gouging you because I know you don't have the guts in the eye and say, I'm going to keep gouging you because I know you don't have the guts to do anything about it, then I guess we should just keep doing what we're doing. In reporting this story, the Defense Department allowed 60 Minutes some background interviews with analysts, but ultimately decided not to provide anyone to speak on camera. Hit pause on whatever you're listening to and hit play on your next adventure.

Stay three nights this summer at Best Western and get $50 off a future stay. Life's a trip. Make the most of it at Best Western. Visit bestwestern.com for complete terms and conditions. Sometimes historic events suck. But what shouldn't suck is learning about history. I do that through storytelling. History That Doesn't Suck is a chart-topping history-telling podcast chronicling the epic story of America, decade by decade. Right now, I'm digging into the history of incredible infrastructure projects of the 1930s, including the Hoover Dam, the Empire State Building, the Golden Gate Bridge, and more. The promise is in the title, History That Doesn't Suck, available on the free Odyssey app or wherever you get your podcasts. More Americans than ever rely on alarm systems, gates, or doorbell cameras to help protect their families. But statistically, you are now more likely to be the victim of theft online

than a physical break-in at home. A new report from the FBI reveals that Americans lost more than $10 billion last year to online scams and digital fraud. People in their 30s, who are among the most connected online, filed the most complaints. But we were surprised to learn the group that loses the most money to scammers is seniors. Tonight, we will show you how cyber con artists are using artificial intelligence, widely available apps, and social engineering to target our parents and grandparents. It's like a death in the family, almost. Well, she's worked so hard, you know, for my money.

I sure have. Susan Monahan and her daughter Tamara are talking about how the 81-year-old was conned out of thousands of dollars in what law enforcement calls a grandparent scam. Tell me about the call that you got. There was a young adult on the line saying, Grandma, I need your help. In a frantic voice, scared, saying, I was driving and suddenly there was a woman stopped in front of me.

She's pregnant and I hit her and they're going to take me to jail. And Grandma, please don't call my mom and dad because I don't want them to know. And I said, Brandon, it doesn't sound like you. He said, oh, I have a cold, grandma. You think it's your grandson. I do. And he said, grandma, a friend of mine has an attorney that we can use and that we can do something about me going to jail. And I said, yes, of course. Monahan said the scammer, pretending to be a helpful attorney, got on the line. It was June of 2020 during the pandemic,

and he promised to keep her grandson out of jail if she could get $9,000 for bail to him quickly. What other instructions were you given? I needed to make an envelope that was addressed to this certain judge that he was going to coordinate this through. And right on there, and they gave me the name, the address, and everything else for this envelope. Did it sound pretty legitimate? Oh, absolutely. He had the legalese.

Monahan is a tax preparer with an MBA. The scammer kept her on the phone as she rushed to the bank. What did he say? He said, when you go there, make sure you tell them that it's for home improvements because they might question the fact that you're withdrawing $9,000. Minutes after Monahan got home with the cash, a courier showed up to take it. This is video from the doorbell camera. You can hear Monahan on the phone with a scammer as she hands off the money.

She said to move your butt because they're on a deadline. She says as soon as the courier left and the adrenaline left her body, she was filled with a sick feeling she'd been scammed. It's just devastating. What did they do to your mom? Beyond the money, beyond taking $9,000 from her? Well, it's your livelihood. Sorry.

It just gets you, like, in your gut. The Federal Trade Commission reports scams like these skyrocketed 70% during the pandemic when seniors, home alone, went online to shop or keep in touch with family. How much money were you scammed out of? $11,300. $14,000.

$7,600. Judy Adig and her husband Ron, a retired iron worker, were victims of the same grandparent scam as Susan Monahan. That's the view from their doorbell camera, as the same courier took off with $7,600 of their savings. $7,600 hits hard. Well, that was for our, you know, if we wanted to go on a trip or something. It was terrible. I was a mess. Steve Savage, a retired scientist, was scammed when he opened a fake email from the Geek Squad. The email said that your bank account is being charged $399 for another year.

And I'm like, wait a minute, I don't remember it being anywhere close to that. The customer service number went to a scammer posing as a representative of the company. Savage was duped out of $14,000. Esther Maestret was scammed too. The retired nurse says an alarm sounded on her iPad with a message to call tech support. She did. He said that last night between 4 and 9 p.m. your bank account has been hacked. And your heart probably stopped. You know, I felt so nervous. But he said, I am going to transfer you to another guy who is a security at Chase Bank.

That fake bank employee told her hackers might be able to access her bank account and instructed her to immediately withdraw money and deposit it into a new account for safekeeping. Maestra did and lost $11,000. And have you been able to recover any of your money? Nothing. Nothing. I'm the one that pulled the money out of the bank, so I won't be reimbursed. If your house gets broken into, you call the police.

If this happens... There's no one to call. Scott Parello is a deputy district attorney who runs San Diego's Elder Justice Task Force and connected us to the victims you just heard from. He says studies show only one in every 20 seniors who've been scammed report it. Often they're embarrassed. Most people who have not experienced this think, well, these people must have dementia or Alzheimer's. It's not the case. Our victims are sharp as a tack. We had a woman, 66 years old.

She came home. She got a message on her computer from Microsoft. And the message said that she had a virus on her computer. And then that virus had somehow infected her financial accounts. Within a matter of weeks, this victim had lost $800,000. Oh my gosh. The scariest part of these scams is that these victims have no recourse. They're left bewildered. What typically happens?

The seniors that have the courage to report that this has happened are being told that I'm sorry, there's nothing we could do. And that is the reality, that a local police detective in Kansas City doesn't have the reach to go investigate a case that's being operated from the Caribbean or from Nigeria or Ghana. Investigators have also traced scams to Europe, Southeast Asia and Canada. Under reporting. To combat them, San Diego's Elder Justice Task Force has taken a new approach. Investigators collect every local fraud case, then collaborate with federal authorities to connect them.

If we have a victim that lost $12,000 here in San Diego, there is without question dozens of other victims to the same scam and millions of dollars in losses. And then once we identify that the scam is part of something much larger, then we can deliver that to our federal partners with the reach to go around the country because these are networks. These are transnational organized criminal networks.

In 2021, Parello helped the FBI bring down a network of criminals who stole millions of dollars from elderly victims. Remember those doorbell videos from the grandparent scam? The courier, a 22-year-old Californian, was the starting point for the FBI's case. She's serving time for her role, but the FBI says the scam's ringleaders, two Bahamian nationals based in Florida, fled the country before they could be arrested. If you don't know how a criminal thinks, then you really don't know how you can protect yourself online. Rachel Toback is what's called an ethical hacker. She studies how these criminals operate.

So ethical hackers, we step in and show you how it works. Toback is the CEO of Social Proof Security, a data protection firm that advises Fortune 500 companies, the military, and private citizens on their vulnerabilities. We hired her to show us how easy it is to use information found online to scam someone. We asked her to target our uns easy it is to use information found online to scam someone. We asked her to target our unsuspecting colleague, Elizabeth. Toback found Elizabeth's cell phone number on a business networking website. As we set up for an interview, Toback called Elizabeth, but used an AI-powered app to mimic my voice and ask for my passport number.

Oh, yes, yes, yes, I do have it. Okay, ready? It's me. Toback played the AI-generated voice recording for us to reveal the scam. Elizabeth, sorry, need my passport number because the Ukraine trip is on. Can you read that out to me? Does that sound familiar? Yes. And I gave her, wow.

I was duped. I was sitting over there. What did it say on your phone? Sharon, how did you do that? So I used something called a spoofing tool to actually be able to call you as Sharon. Oh, so I was hacked and I failed. Everybody would get tricked with that. Everybody would.

It says Sharon. Why would I not answer this call? Why would get tricked with that. Yeah. Everybody would. It says Sharon. Why would I not answer this call? Why would I not give that information? Toback showed us how she took clips of me from television and put it into an app that cloned my voice. It took about five minutes. I am a public person. My voice is out there.

Could a person who's not a public person like me be spoofed as easily? Anybody can be spoofed. And oftentimes, attackers will go after people. They don't even know who these people are. But they just know this person has a relationship to this other person. And they can impersonate that person enough just by changing the pitch and the modulation of their voice that I believe that's my nephew and I need to really wire that money. Toback says hackers no longer need to infiltrate computers through a back door. She says 95% of hacks today happen after a user clicks on a text, a link, or gives personal information over the phone.

You were able to hack my colleague Elizabeth, who is a tech-savvy millennial. What does that tell you? Anybody can be hacked. Anybody can fall for what Elizabeth fell for. In fact, when I do that type of attack, every single time the person falls for it. She said hackers armed with basic information, like a relative's name found online or an app that can mimic a voice or change the caller ID can create a convincing story. If you were to receive a phone call, a text message, an email, and it's asking for something sensitive, urgent, or with fear,

that's when the alarm bells have to go off in your head, and they want me to give something to them. I'm going to take a beat, and I'm going to check that this person is who they say they are. I call it being politely paranoid. Politely paranoid. Being politely paranoid. Politely paranoid? Politely paranoid. Toback has worked as a consultant for Aura, a Boston-based technology company that created software to protect the identity, passwords, finances, and personal data for entire families

in one app. So here you can see a full footprint of everything that's happening inside the family. Hari Ravachandran is the CEO of Aura. He says their software can reroute scam calls away from grandparents. If the parent is getting a call and we are identifying using AI that the call is a potential scam call, then they can route that call to me. Does this stop the call from getting in? It does. So it just blocks the call? When the call comes in, it will have a recording that says,

let me know who you are, what's your intent. If it's an unknown person, if it's a known person that's already in your contacts, it'll go right through. Ravishandran says AI is also used to monitor finances and alert users of problems in real time. If I see a charge from my mom for $10 at Starbucks, that feels okay. But if there's a $500 charge from Starbucks, something's off kilter. So we try to figure out with AI, contextually, what's different. But if something is off pattern, you can look at that and say, okay, well, something's off here. I need to go take care of this. San Diego Deputy District Attorney Scott Pirello says more help is needed from law enforcement

and the banking and retail industries to protect seniors. The FBI reports over the past two years, the losses from digital theft have doubled. The trends and the data are horrifying. We have the senior population is growing exponentially every year. We have this dynamic of underreporting. And then we have the technology coming. People are convinced that AI is playing a part in maybe pretending it's the grandchild's voice. We're all just next on the conveyor belt, and we all need to do a better job.

Hear what it sounds like to be targeted by a grandparent scam. The cash does have to go directly to the notary's office. At 60minutesovertime.com. Wendy's most important deal of the day has a fresh lineup. Pick any two breakfast items for $4. New four-piece French toast sticks, bacon or sausage wrap, biscuit or English muffin sandwiches, small hot coffee, and more. Limited time only at participating Wendy's Taxes Extra. Jeff Koons is one of the most prominent and polarizing art stars in the world. Perhaps you've seen one of his giant balloon dog

sculptures, or the stainless steel inflatable rabbit he made that resold for $91 million a few years ago, the highest price ever paid at auction for a work by a living artist. I bought a much less expensive work of his at a charity auction about 10 years ago. His creations may look simple, but they can take decades to make and often push the boundaries of technology and sometimes taste. Critics may scoff at times, but that's nothing new. Jeff Koons has been controversial since he first started showing his art more than 40 years ago. You'll find the largest collection of Jeff Koons' work at the Broad Museum in Los Angeles. Visiting it is like showing up at a strange children's party long after the kids have gone to bed.

There's a giant painting of a party hat, a porcelain Michael Jackson and his chimp Bubbles, a kind of pop culture pieta. The Hulk even makes an appearance. The star attraction, a 10-foot-tall stainless steel balloon dog sculpture. Kuhn showed it to us after hours. We had to make machines to make this work. They didn't exist. It may look like it's filled with air,

but balloon dog weighs more than a ton and took Jeff Kuhn six years to make. I started with a balloon, and I blew it up. I twisted a balloon dog. Did you know how to make a balloon dog? No, I just got a little book, and I blew it up. I twisted a balloon doll. Did you know how to make a balloon doll? No, I just got a little book, and I saw how you do it, so I twisted it up. I probably made about 50 of them, and I made a mold of it, and then that was used to make the stainless steel pieces. You know, originally when I made this piece,

I thought that I could make it for about $300,000, which still, that's a lot of money. But it ended up, just to create the piece, ended up costing me $1.6. Wow. And that was more than what I had sold the work for. That's Classic Koons. He's famous for going over budget, and his obsessive attention to detail is legendary. He spent 20 years figuring out how to turn this mass of aluminum into a 10-foot

tall pile of Play-Doh. To get these basketballs to appear suspended in air, he enlisted the help of a Nobel Prize-winning physicist, and he used more than 60,000 living flowers to create this 40-foot sculpture of a puppy. Koons often takes famous characters or artworks and plays with them, adding a gazing ball to the Mona Lisa. Or he elevates everyday things, making them larger, shinier, or surreal versions of themselves. The rabbit's from 86. 86. Like that rabbit resold a few years ago for $91 million. He made four that look at first as if they're just plastic inflatables, but they're highly polished stainless steel and weigh about 150 pounds. It's iconic because it can represent so many different things. I can think of Easter. I can

think of a politician with a kind of a microphone, somebody making proclamations. I can think of a playboy rabbit. But I think one of the most important things to me, the reason it's reflective and reflecting you, reflecting me, you know, the viewer finishes a work of art. It's about your feelings, your experiences. It's about your potential. Maybe you're thinking Jeff Koons sounds like a phony self-help prophet. Plenty of critics do. But he does see art as something that can help people have a personal transformation. Art can be anything. I mean, it really can be. My personal experience of art is that you just don't have to bring anything to it other than yourself. So your message to people is you don't need to have a thesis in

art history to interact with art and what you feel from it is valid. It's as valid as anybody else could experience. Why balloon dogs? Why gazing balls? Inflatable rabbit? Memories. You know, around Easter time, I would see a lot of inflatable rabbits in the yards. I would see gazing balls in people's yards, in their gardens. Our neighbors who do that, I mean, how generous they are for us that we're just driving by or walking by, and we can look, and we can have a little awe and wonderment just for that second. To me, they're symbols of cultural history. Koons grew up outside York, Pennsylvania, in a rural community where you can still find gazing balls in people's yards.

He has eight children, six with his second wife, Justine, to whom he's been married for 21 years. They still live part-time in Pennsylvania in Koons' grandparents' house, part of an 800-acre farm where they raise horses and cows. I think most people don't envision that this is the life you have as a world-famous artist. I'm very involved with my work, but on the weekends and summers, holidays, it's a really important part of my life. Kuntz has been drawing and painting since childhood. In 1974, while studying art in college,

his mother helped him meet one of his favorite surrealist painters. My mother called me and she said, I just saw in a magazine that Salvador Dali spends half his year in New York City at the St. Regis Hotel. And I thought, oh, okay, maybe, you know, I'll call. Wait a minute, you just thought you'd call him? I called the St. Regis. I asked for Salvador Dali's room, and they put me through. You know, I was quite nervous, but I told him I was a fan and that I would enjoy very much to meet him. And he said, can you come to New York this weekend on Saturday? And I said, yes. He said, be in the lobby at 12 o'clock, and I'll meet you then.

And he was spectacular. It would never have occurred to me to, like, just call Salvador Dali in his hotel room. I had nothing to lose, you know. Koons and Dali spent the afternoon together, and at the end of it, he asked the world-renowned artist to pose for this picture. I remember he put his mustache up, and he was telling me, you know,

kid, hurry up, I can't hold this pose all day. But I left New York that evening feeling like I could do this. After finishing school, he hitchhiked to New York and started making art in his Lower East Side apartment, buying cheap plastic inflatables and putting them on mirrors. Koons had grand ambitions, but he needed cash to realize them. So eventually I became licensed and registered to sell commodities and mutual funds. And so, you know, that's what I started to do, to be able to make more money to make the works. That's not a career move a lot of artists make. You know, I did it only that I could make enough money to make my vacuum cleaner pieces.

The vacuum cleaners he's talking about were what first got him noticed in 1980. He bought about 20 brand new vacuums and displayed them in cases with fluorescent lights. It was part of a series called The New. I was showing them for their newness that this was a brand new object. It was never used. You can see that it's clean, it's pristine, its lungs are pure. And there's also some sensual aspects to it too. Sensual aspects? Sensual, I mean you have the handle and you have the bag right there. It could be looked at as masculine.

Or you could look at it and say, oh, you know, the bag is the womb. Art definitely is in the eye of the beholder. What did you think of Jeff Koons as an artist when he first sort of came on the scene? I was interested in him, and I also was kind of repulsed by him. Robert Storr, former dean at the Yale School of Art, was a curator at the Museum of Modern Art in New York when it acquired some of Koons' vacuums in 1996. I think some of the work is really unpleasant,

but it doesn't mean it's not serious. What's unpleasant about it? The imagery is vulgar, okay? Now, vulgar means many things. It means of the people rather than of the elites. So it's taking an object which the New York elites might look at and think, oh, that's tacky, that's trashy, that's something you buy in a gift shop, and it's blowing it up and making it perfect

and saying that this has value? It has meaning, not necessarily value, but it has meaning. What is the message of that? The message is that it is there to be embraced, that it is not to be mocked, that one should not be smugly sure of one's own taste to the point of denying the possibility of other tastes. And is he being honest about that?

I think he's being totally honest. And I think that he has made all of that fair game in a way that we have not seen since Warhol. Like Andy Warhol, Jeff Koons has a factory of sorts, with an assembly line of painters meticulously following his instructions, and dozens of digital assistants, sculptors, and craftsmen all over the world helping make his complex pieces, which are often inspired by very simple things. This is like a very modern grandmother's closet.

Turns out Kuhns was fascinated by his grandparents' porcelain figurines as a child and has collected hundreds of them. Where did you find this? I found it online. He decided to make this $150 ballerina into a multi-million dollar, eight-foot-tall marble sculpture. But it wound up taking him 12 years. First, he used a CAT scan machine to digitally map every detail of the figurine inside and out.

Then it took him five years, and the help of MIT scientists, to begin translating all those details into instructions for machines to carve the sculpture. The actual carving took another seven years. Now the work will really progress quickly because... We went with Kunz to a workshop in Pennsylvania to check on the progress, and found Ayami Aoyama and her team carefully polishing the ballerina by hand. Do you have a sense of how many hours of work is done on a piece?

33,000 hours. 33,000 hours? Hours for just the handwork. It must be exhausting. I mean, the level of detail and monotony and difficulty of it is incredible. Yeah, it is like a really unique job, I would say. I mean, that looks like a sort of a dental tool. What is this? Yeah, that's nail polisher that, you know, ladies actually use.

You'll notice Jeff Koons isn't doing the sculpting or painting. He comes up with the ideas and sets the standards, but his artisans do the labor, which has led to criticism, including from our own Morley Safer. So what do you say to the man? 30 years ago, Morley did a story critiquing contemporary art and likened Koons to a P.T. Barnum selling to suckers. He doesn't actually paint or sculpt. He commissions craftsmen to do that. Or he goes shopping for basketballs and vacuum cleaners. Is that a legitimate criticism? It's a legitimate criticism if you look at art in a way that you kind of want everything to be done by the artists themselves.

But it becomes very limited what you can do within one life if you're being responsible for everything. It's like the production of this program right now. Anderson, if you had to be responsible for the lighting, if you had to be responsible for editing... If I was responsible for the lighting, we wouldn't see you or myself. But if you'd have to be responsible for everything, I mean, how many programs would you be able to create? I've designed, worked on the systems,

so that the whole process, at the end of the day, it's as if every mark was made by myself. At 68, Koons has reached a level of commercial success few artists ever imagined. He's helped design cars for BMW, an album cover for Lady Gaga, even a super yacht. And later this year, he hopes to create a permanent art exhibit on the moon.

He's made 125 small stainless steel moon sculptures and mounted them on a lunar lander that'll hitch a ride aboard a SpaceX rocket. Is there something about the atmosphere on the Moon that would affect the lifespan of a work? Yeah, almost everything. You know, you have tremendous radiation, you have the temperature change, at least 250 degrees difference from night to day.

One of the most inhospitable environments that, you know, you could imagine for a work of art. The moon sculptures are for sale of course along with an NFT or non fungible token which serves as digital proof your artwork is actually up there. You'll also get one of these larger moons to show off here on earth. He won't say how much it'll cost you but with Jeff Koons it's a safe bet the price tag will be out of this world. side. Or both side. Order yours on the Tim's app today at participating restaurants in Canada for a limited time. Thank you for watching our 55th season of 60 Minutes. We've been on some amazing adventures this year, and 60 Minutes has interviewed some fascinating characters, among them presidents and princes,

prime ministers, and controversial members of Congress. We learned a bit about the nature of our pets and tried never to be predictable. We have viewed nature's awes and war's atrocities. Along the way, we've been entertained by some musicians and performers. We've explored evidence of miracles at pilgrimage sites and evidence of desperation at our borders. And we've introduced a new correspondent who has plunged right in. Thanks for coming along with us. I'm Bill Whitaker. We'll be back next week for a summer of classic and updated stories while we begin reporting and shooting for this fall, our 56th season of 60 Minutes.