NASA audit says Google execs saved millions with jet fuel discount

SAN FRANCISCO -- Google executives got a steep discount on jet fuel from the federal government for their fleet of private aircraft over a six-year period, a new audit from the NASA inspector general says.

A company owned by tech billionaires Larry Page, Sergey Brin and Eric Schmidt got a discount worth $3.3 million to $5.3 million, NASA Inspector General Paul Martin estimated.

Martin called on NASA to explore whether it could recover the funds from the company, H211.

H211, which manages the Google executives’ private aircraft, began paying market rates for jet fuel on private flights in September amid controversy in Washington that it was getting a special deal on jet fuel that was not offered to other businesses.

“While we concluded that the fuel arrangement between Ames and H211 did not result in an economic loss,” the audit says. “H211 nevertheless received a monetary benefit to which it was not entitled. Accordingly, we recommend that NASA explore with the company possible options to remedy this situation.”

The Google executives rent a hangar at Ames Research Center at Moffett Federal Airfield, a former U.S. Navy base that is less than four miles from its Mountain View, Calif., headquarters. The airfield is not open to most commercial aircraft. But H211 was able to rent the hangar in part by allowing NASA to use its aircraft for scientific research.

H211 pays NASA $1.4 million each year to rent approximately 70,000 square feet of space and stores up to nine aircraft, including two helicopters and seven planes, from a Boeing 767 to a two-seat military aircraft known as the Alpha Jet, according to Martin.

It fuels its fleet with aviation fuel supplied by Defense Logistics Agency Energy, or DLA Energy, an arm of the Department of Defense, which charges higher rates to NASA and NASA contractors to cover its costs, but does not charge state and local taxes, making the fuel cheaper than at local airports.

The relevation may further inflame tensions in Silicon Valley and San Francisco, where the growing wealth and influence of the technology industry has begun to meet with protests.

“A bunch of billionaires managed to get special favored treatment from NASA to park their fleet of jets at Moffett and buy discounted fuel saving them up to $5.3 million. This wasn’t the result of any misunderstanding. It was deliberate, willful misconduct,” said Google critic John Simpson, whose organization Consumer Watchdog drew attention to the discount in 2011. “What makes the situation more egregious is that others, including a nonprofit, were unable to gain access to the airfield. NASA needs to get the money it is owed and the Google executives’ planes should be banned from Moffett.”

Google could not be reached for comment. Kenneth Ambrose, an executive with H211, told the Wall Street Journal earlier this year that the company pays “full retail” for the hangar with none of the support typical of business aircraft hangars. He also estimated that NASA and taxpayers are “$2 million a year to the good from our presence at Moffett.”

The Google executives are building their own $82-million hangar at the San Jose airport.

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