MOUNTAIN VIEW -- Google's (GOOG) cofounders got an improper subsidy worth $3.3 million to $5.3 million when their private aircraft company was allowed to buy jet fuel at discounted rates from a federal agency at Moffett Field, according to a report issued Wednesday by NASA's Inspector General.
While finding no "intentional misconduct," the NASA watchdog official said the Google founders were allowed to buy fuel for their fleet of private jets at a rate meant for U.S. government contractors, while using the fuel for numerous private trips as well as NASA-related research flights.
The report upheld other aspects of the arrangement between NASA and H211, a private aviation company owned by Google's top three executives: CEO Larry Page, cofounder Sergey Brin and chairman Eric Schmidt. But the findings were trumpeted by critics who complain NASA has given favorable treatment to the Google bosses, by letting them park their fleet of seven private planes and two helicopters at Moffett, a site that is conveniently close to Google's main campus.
"These billionaire executives got a sweetheart deal at Moffett Field, basing their aircraft there when others could not, and then got an improper fuel discount. The only fair remedy now is to recoup the money they should have paid and evict them," said John Simpson of Consumer Watchdog, an advocacy group and frequent Google critic.
Google did not respond to a request for comment Wednesday. Spokesmen for NASA and H211 said they are reviewing the ten-page report. Since questions were raised last summer, the report noted, the military agency that supplies the fuel has charged H211 a market rate for fuel used on private trips.
NASA's Inspector General had previously chided space agency officials for not advertising the availability of hangar space at Moffett Field before negotiating the H211 lease in 2007. While public notice wasn't required, the report said, it would have "ensured a more transparent leasing process."
Auditors concluded, however, that H211's annual rent of $1.4 million is comparable to what it would pay for similar hangar space at a commercial air field.
H211's lease is set to expire this summer. The Google executives and a private contractor are planning a new jet facility for their planes at Mineta San Jose International Airport. The fleet includes a Boeing 767, a Boeing 757 and four smaller Gulfstream V jets.
NASA officials defend the arrangement with H211 by noting the Google executives had agreed to install scientific instruments on their planes and make them available for atmospheric tests and other research. When aviation authorities were slow to approve the instruments' use on passenger planes, the Google executives bought an experimental military jet for NASA's research flights.
After reviewing records for 229 flights over a year's time, the auditors found 170 or roughly three out of four of the flights were for personal travel, while the remaining 59 flights were used to collect air samples for NASA.
H211 was eligible to pay government rates for the fuel it used on those research flights, but not for the majority of flights that didn't involve research, the Inspector General concluded.
Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/BrandonBailey