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Google Loses Sweet Deal for Cheap, US-Subsidized Jet Fuel

Image: Google Loses Sweet Deal for Cheap, US-Subsidized Jet Fuel

By Melanie Batley   |   Friday, 13 Sep 2013 10:26 AM

Google has lost a sweetheart government deal that for years gave the tech giant significantly discounted fuel rates to fly its fleet of private jets, even for non-governmental business.

According to The Wall Street Journal, since 2007, H211 LLC, the company that operates Google's aircraft fleet, had a special arrangement with NASA in which it paid $1.3 million to lease space at Moffett Federal Airfield near its Silicon Valley headquarters. The airfield, a former naval air station at the sourth end of San Francisco Bay is normally closed to non-governmental traffic.

In a related deal, Google executives were to perform scientific flights and other NASA-related transport.

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"NASA is always looking for innovative, public-private partnerships to help advance our mission and provide benefit to the American taxpayer," a spokeswoman for NASA told the Journal, explaining that the rent collected from H211 and other tenants helps defray the cost of operating the airfield.

The arrangement, however, meant that even for non-governmental flights, the company could buy fuel at the base supplied from the Pentagon at rates significantly below market prices. The Journal noted, for example, that dozens of times, Google executives were flown to exotic locations and vacation spots such as Tortola, Hawaii, Nantucket and Tahiti, effectively on the government dime.

H211 defended the arrangement saying the company bought "the only fuel available at Moffett," and pays "full retail for hangar space that includes none of the ground support typically included at business aircraft hangars. He added that the total value of H211's payments and scientific flights means NASA and taxpayers are "$2 million a year to the good from our presence at Moffett."

Still the contract between H211 and the government states that fuel was supposed to be used only "for performance of a U.S. government contract, charter or other approved use," and says that violations could trigger civil or criminal penalties.

Iowa Republican Sen. Charles Grassley is seeking an audit of the arrangement by the Pentagon's inspector general.

"Are some executives getting a special deal on fuel that isn't available to other businesses?" he asked, according to the Journal, adding that the setup raises concerns about the government's role as a "fair broker with businesses and responsible steward of tax dollars."

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