Top Google Inc. executives saved millions of dollars by flying their private jet fleet on discounted fuel purchased from the federal government that they weren’t entitled to buy, according to a new inspector general review released Wednesday. The report, by the inspector general of the National Aeronautics and Space Administration, said the Google executives only were authorized to buy the discounted fuel for government business, but instead for six years also were allowed to purchase it for private flights.
The inspector general blamed the situation on an internal government “misunderstanding” rather than intentional misconduct.
The report said the arrangement didn’t result in a loss to the government, but said a company operating the jets for the Google executives “nevertheless received a monetary benefit to which it was not entitled,” and the arrangement “engendered a sense of unfairness and a perception of favoritism.”
The report pegged the unwarranted fuel discount between $3.3 million and $5.3 million.
The inspector general, Paul K. Martin, called on NASA
to discuss “possible options to remedy the situation” with H211 Inc., which operates aircraft for Google co-founders Sergey Brin
and Larry Page, and for Google Chairman Eric Schmidt
Ken Ambrose, an executive with H211, said “we are currently reviewing the report.”
Senator Charles Grassley
(R-Iowa), who has examined the situation, called the deal a “corporate giveaway” and said the “obvious remedy would be for NASA to seek repayment for the taxpayers for the fuel benefit.”
The unusual fuel arrangement was the focus of a Sept. 13 article in The Wall Street Journal.
The fuel deal dates back to 2007, when the Google executives signed an agreement with NASA to base their fleet at Moffett Federal Airfield, a NASA-run facility near Google’s Mountain View, Calif., headquarters. The fleet recently included seven jets and two helicopters.
As part of the arrangement, NASA and an arm of the Pentagon, which controls fuel at the airfield, allowed the Google executives to buy jet fuel at government prices, which are discounted from market prices. In return, the Google executives agreed to provide free flights to NASA for research purposes.
The deal ended Aug. 31, after the Pentagon became aware that H211 was using the fuel for nongovernment flights, the inspector general’s report said.
Flight records from the Federal Aviation Administration
suggest that the vast bulk of the flights by the Google executives’ fleet have been for non-NASA purposes.
The report said officials at NASA’s Ames Research Center accurately reported to the Defense Department
the nature of the agreement with H211, but the Pentagon “misunderstood that H211 was drawing fuel for both personal and NASA-related missions.”