Google's founders have been getting an improper bargain on jet fuel at Moffett Field, according to a report released Wednesday by the NASA Inspector General. The reduced price saved the group between $3.3 million and $5.3 million since 2007.
While no "intentional misconduct" was found, the inspector general reports that Google's founders, who have a private fleet of planes in a leased Moffett Field hangar, paid only $2 million for jet fuel in 2012 that would have cost $3 million to $3.6 million if purchased at market rate at the San Jose Mineta International airport. The executives were also spared from paying $240,000 to $300,000 in state and local taxes that year.
The report attributes the improper discount to a "misunderstanding" by fuel provider DLA-Energy, which operated under the assumption that the planes were being used for NASA research and could purchase it at a reduced rate for government contractors. But according to the report, only 26 percent of the 229 flights between August 2012 to July 2013 were for NASA missions. The other 170 were private flights.
As of August, , the Google group's H211 is now paying market jet fuel rates for non-NASA flights.
Through H211 LLC, Google founders Sergei Brin, Larry Page and Google executive Eric Schmidt own two helicopters and seven planes stationed at Moffett Field's Hangar 211, including a pair of jumbo jets, several Gulfstream jets and an Alpha jet plane.
The report notes that the majority of the flights for the controversial Alpha Jet -- a small jet fighter once called "a toy" for the executives -- were for NASA research. The Alpha Jet was purchased when the FAA was slow to approve modifications to the executive's other planes needed to carry NASA earth atmosphere observation sensors to do research required of H211 under its agreement with NASA.
The report notes that H211 pays a fair market rent for its space, $1.4 million a year, which the Inspector General reports to have been of benefit to NASA. H211 also saved NASA between $1,800 and $6,500 per hour on over 200 research flights since 2009.
H211's lease has been extended twice and expires in July, 2014. After criticism of NASA by two Congress members and the Inspector General for permitting the lease without a bidding process, there is no extension of the lease in the works.