Google executives received an unfair and inappropriate discount on jet fuel purchased from the government for personal flights on their nine private aircraft, according to a report released on Wednesday by NASA’s Office of the Inspector General. http://bits.blogs.nytimes.com/2013/12/12/google-executives-got-discounts-from-government-on-fuel-for-private-aircraft/?ref=us
For six years, H211, a company that manages aircraft owned or leased by Google’s founders, Larry Page and Sergey Brin, and its chairman, Eric E. Schmidt, paid between $3.3 million and $5.3 million less than market rates for fuel supplied by the Defense Department, according to the report.
The arrangement resulted “in considerable savings for H211 and engendered a sense of unfairness and a perception of favoritism toward H211 and its owners,” wrote Paul K. Martin, NASA’s inspector general.
The arrangement began in 2007, when Google executives started leasing space at Moffett Field, a former Navy base that is minutes from Google’s headquarters in Mountain View, Calif. and is managed by NASA’s Ames Research Center. H211 pays $1.4 million a year to rent 70,000 square feet, where it stores the Google executives’ nine aircraft, including a Boeing 767, two helicopters and a fighter jet.
In exchange for using the airfield — which is generally closed to private jets or commercial aircraft — H211 agreed to permit NASA to use its aircraft for scientific expeditions.
Those flights were permitted to use discounted fuel provided by the Defense Department. That is the only fuel available at Moffett, and when Google executives used their planes for business or vacation travel, they also received the discount.
Yet just 59 flights, a quarter of the flights flown between August 2012 and July 2013, were NASA science missions, while 170 were private.
The discounted fuel did not cost NASA anything, but might have cost state and local governments tax revenue, according to the inspector general, whose findings were first reported by The Wall Street Journal.