Claims of alien activity were first reported by Albuquerque businessman Paul Bennewitz. In 1979, Bennewitz became convinced that he was intercepting electronic communications from alien spacecraft and installations outside of Albuquerque. By the 1980s he believed he had discovered an underground base near Dulce. The story spread rapidly within the UFO community and by 1990, UFOlogist John Lear claimed he had independent confirmations of the base's existence.
Bennewitz claimed the existence of a plot involving an extensive network of UFO bases tied to an extraterrestrial colonization and control scheme to subjugate the human race. After he saw the hypnosis sessions of Myrna Hansen, who claimed to have UFO experiences, he became convinced that cattle mutilations were due to aliens. As a result, Bennewitz claimed to have uncovered evidence of aliens controlling humans through electromagnetic devices, and furthermore claimed that UFOs were regularly flying near Kirtland and the nearby Manzano Nuclear Weapons Storage Facility and Coyote Canyon Test Area.
Convinced that he was intercepting electronic communications originating from alien spacecraft located outside of Albuquerque, New Mexico, Bennewitz soon believed that he had located a secret alien facility that he called Dulce Base. By 1982, Bennewitz began to spread his ideas regarding Dulce Base to others in the UFOlogy community. In 1988 he wrote a paper entitled "Project Beta" detailing how the base might be successfully attacked.
Bennewitz detailed his assertions to the Aerial Phenomena Research Organization, who regarded him as deluded and paranoid. UFOlogist Bill Moore claims that he tried to push Bennewitz, who had been in a mental health facility on three occasions after suffering severe delusional paranoia, into a mental breakdown by feeding him false information about aliens.
Former special agent for the U.S. Air Force Office of Special Investigations Richard Doty claimed that in the 1980s, he was tasked with hoaxing documents and feeding false information to UFO researchers, including Bennewitz.