
Google Founders' Jet Fleet Loses a Pentagon Fuel Perk - anigbrowl
http://online.wsj.com/article/SB10001424127887323864604579069730686941454.html?mod=WSJ_hps_MIDDLENexttoWhatsNewsForth
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throwaway_yy2Di
Did I understand this correctly: the DoD subsidized several million dollars of
military jet fuel, to a shell company owned by Page and Schmidt, under a NASA
research contract, which they used mostly for business and vacation travel?

(Seriously, did I read the story accurately -- it's confusing).

edit: I found the documents of the NASA contract:

[http://www.nasa.gov/centers/ames/business/foia/H211_LLC.html](http://www.nasa.gov/centers/ames/business/foia/H211_LLC.html)

Apparently these were disclosed by a FOIA filed by the New York Times:

[http://bits.blogs.nytimes.com/2008/10/23/a-new-fighter-
jet-f...](http://bits.blogs.nytimes.com/2008/10/23/a-new-fighter-jet-for-
googles-founders/)

~~~
ars
> Did I understand this correctly

No. According to the article the DoD charged google what it cost them, so it
was null to them. There might be some savings of local tax, but google is
supposed to pay that separately (don't know if they did).

This is mostly a non-story.

~~~
pedrocr
That's not quite what the article says:

> _The agency says it recently charged H211 on a cost-plus basis, and before
> that charged a standard budgetary price that was infrequently reset but over
> time reflected the government 's costs._

So at least for some time the government was charging a standard accounting
price that wasn't updated with rising fuel costs. This won't necessarily
compensate over time. If you're smart when the government is below market you
buy and when above do what they're doing now:

> _Since the fuel cutoff, the Google executives ' planes have been coping by
> flying back to Moffett with extra fuel purchased elsewhere, Mr. Ambrose
> said._

The reference to cost-plus does seem to imply they fixed this hole at some
point.

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ajays
Don't let the sugar-coating fool you: the Google guys got a sweet deal from
NASA, all in the guise of "research". The stats from the article prove it: of
their massive fleet of aircraft, only 1 was used for any 'research', and that
too sparingly. No other private individual is allowed to use Moffett Field,
regardless of how much they're willing to pay.

It's a shame, really, that the Google founders feel the need to misuse the
system like this. "Don't be evil", my ass.

~~~
turing
Google flew 155 missions for NASA. There are definitely serious questions to
be asked here, but it's not as if Google wasn't contributing something.

~~~
greedo
No, Google flew 155 missions that were claimed to be for NASA. The Alphajet is
a German military trainer from the early 1970s, not a research aircraft. I
would like to see some documentation from NASA about what these "missions"
accomplished. NASA is always whining about budgets, but on the surface, it
looks like they were just shilling for Google. Next thing we'll see is Larry
Ellison getting research money for flying his MIG jets...

~~~
throwaway_yy2Di
This is in the NASA contract under "Purpose":

" _The Alpha Jet aircraft owned and operated by Partner offers unique
capabilities due to its performance and altitude range, coupled with the
proficiency of the pilots in high-performance and formation flying. The
combination of aircraft and pilot capabilities allows ARC to design unique
sampling profiles to study the Earth 's atmosphere from the surface up to
51,000 ft in very tightly defined columns. This sort of profiling is valuable
for comparison with satellite observations and for exploring small-scale
phenomena at various altitudes._"

[http://www.nasa.gov/centers/ames/pdf/675605main_SAA2-402663....](http://www.nasa.gov/centers/ames/pdf/675605main_SAA2-402663.pdf)

The Gulfstream flights to Tahiti are less credible.

------
tfe
I think the fuel thing is just an inconsequential side-effect of having their
aircraft based at Moffett. It's not like there is a commercial vendor selling
fuel at Moffett, so of course they bought it from the only place available on
the airport. And apparently that's subsidized government fuel or not taxed in
the same way. What else were they supposed to do if the aircraft are based
there?

I don't see how that's a big deal. It seems like it's just a matter of course.
The bigger question is why they're basing the entirety of their fleet at
Moffett when only one aircraft is involved in research.

As for the folks with their eyebrows raised over the "shell company" that owns
the aircraft, this is a very common practice in the aviation business. Nothing
out of the ordinary or shady at all.

~~~
cowsandmilk
when did convenience become an excuse for ignoring contract terms? They broke
the terms of their contract, that were clearly spelled out, so they should
face the consequences.

I'm not saying you should always follow the terms of contracts, there are
plenty of business reasons to ignore a contract, you just have to do so with
the knowledge of the potential consequences.

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positr0n
There are so many weird things about this article. Here is another one:

"I don't see how in the hell anybody can buy it that cheap," said Fred Fitts,
president of the Corporate Aircraft Association, a nonprofit that negotiates
discounted jet-fuel prices for 1,600 corporate flight departments at airports
around the U.S.

What the heck is a _nonprofit_ doing negotiating jet-fuel prices for
corporations? I can't think of any reason although my knowledge of tax
loopholes is admittedly small..

~~~
lnguyen
Being a non-profit sets an expectation of the actions the organization will
take.

Also remember that until recently, Visa and Mastercard were also non-profit
entities.

~~~
abraham
> Also remember that until recently, Visa and Mastercard were also non-profit
> entities.

[citation needed]

~~~
mburns
>"Prior to its initial public offering, MasterCard Worldwide was a cooperative
owned by the 25,000+ financial institutions that issue its branded cards."

>"Prior to October 3, 2007, Visa comprised four non-stock, separately
incorporated companies that employed 6000 people worldwide: Visa International
Service Association (Visa), the worldwide parent entity, Visa U.S.A. Inc.,
Visa Canada Association, and Visa Europe Ltd"

From their respective Wikipedia company pages.

~~~
scott_karana
How does that have anything to do with being non-profit?

~~~
mburns
MasterCard Worldwide was a non-profit cooperative until 2006.

~~~
scott_karana
For some reason I'd thought that for-profit cooperatives existed. Thanks!

~~~
vidarh
They do.A lot of coops are for-profit.

E.g. it is common for cooperative store-chains to pay out dividends from
profits to all members proportional to the amount of money you spend with
them.

------
staunch
Step 1. Become billionaires by organizing the world's information.

Step 2. Spend hundreds of millions on a fleet of jets and helicopters.

Step 3. Conspire in the backrooms of government offices to save money on gas.

The final stroke of their master plan has finally been revealed!

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AmVess
"Even so, the contract between H211 and the Pentagon stated that the fuel was
supposed to be used only "for performance of a U.S. government contract,
charter or other approved use," and said violations could trigger civil or
criminal penalties. There is no indication of any such investigation."

Kick-back for Google granting NSA quick and easy access to their servers? A
little too tin foil hat for my tastes, but it wouldn't surprise me.

~~~
craigmccaskill
The dollar amount saved on fuel costs would be under $2 million. Their 2012
cash reserves were just shy of $4.8 billion. You're barking up entirely the
wrong tree.

~~~
bowlofpetunias
I don't quite get your point here. They have so much money they wouldn't care
about a bit more?

My experience with wealthy people/companies is exactly the opposite, they
didn't get there by leaving a "measly" $2 million on the table.

~~~
DannyBee
You should try meeting these particular people sometime, before making mean-
spirited assumptions about them?

~~~
lostlogin
Ah, the character witness.

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tehwalrus
I'm astonished at that graph. Jet fuel is more expensive than normal petrol
("gas") right?

So, if it's $5 a gallon in the US for Jet Fuel, in the UK for petrol you'd pay
roughly £6.10 for a gallon of normal car fuel[1] which is like $9.60 .

Seriously? it's cheaper to fuel a _private jet_ in the US than a car in the
UK?

[1] estimated from
[http://www.petrolprices.com/search.html?search=London%2C+Mid...](http://www.petrolprices.com/search.html?search=London%2C+Middlesex)
based on the cheapest price in London. Prices quoted are for 1 Litre.

~~~
pjc50
The cost of UK fuel is mostly tax. Jet fuel is tax-free by international
treaty, I believe (treaty of Rome?)

~~~
andrewpi
Jet fuel is definitely not tax free.

~~~
pjc50
Ah, you're right; misreading of
[http://ec.europa.eu/taxation_customs/taxation/excise_duties/...](http://ec.europa.eu/taxation_customs/taxation/excise_duties/energy_products/aircraft_fuel/index_en.htm)
\- it's only tax-free within the EU.

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magicalist
> _The Pentagon probably didn 't lose much, if any, money on the fuel sales.
> The agency says it recently charged H211 on a cost-plus basis, and before
> that charged a standard budgetary price that was infrequently reset but over
> time reflected the government's costs._

Oh, ok.

~~~
dangero
Yeah this is totally a words game. So if I bought an ounce of gold for $600
ten years ago and sold it today for $600, yes technically, I didn't lose any
money, even though gold is worth a lot more than that now. I wasted potential
money which is pretty much as good as losing money.

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huhtenberg
What a rookie mistake. They really should've not encrypted that cross-
datacenter traffic.

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peterkelly
I suggest we start a donation fund so we can all chip in to help out Larry &
Sergey with their fuel expenses.

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chiph
> 767

It's good to be a billionaire.

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plg
don't be evil

