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NASA Admits It Gave Jet Fuel Discounts To Google Execs' Company

Posted by timothy on from the only-tax-money-after-all dept.

An anonymous reader writes "In a letter to Senator Grassley of the Senate Judiciary Committee, NASA 'admits the agency was selling jet fuel at below market rates to H2-11, a company owned by the founders of Google.' The agency has since raised its rates to reflect market prices but has informed the Senator that it would be impossible for NASA to recoup the money that tax payers have paid in order to subsidize Google's jet fuel discounts."

126 comments

  1. Not a subsidy? by Dominare · · Score: 5, Interesting

    Maybe I'm a simpleton, but the one page letter linked to seems to suggest fairly explicitly that NASA was selling the fuel at "full cost" not at any kind of loss, and therefore the claim in the article that tax payers are somehow out of pocket is a load of crap. Please do correct me if I'm wrong.

    1. Re:Not a subsidy? by lgftsa · · Score: 3, Informative

      I *think* that the meaning of the quoted words "full cost" is that NASA was selling to H2-11 at NASA's cost price. This would be less than "market rate" because NASA does not collect tax on the fuel.

      The customary difference between cost and market would be tax, handling and profit margin, none of which were added by NASA.

    2. Re:Not a subsidy? by erice · · Score: 4, Insightful

      Right. It looks like NASA was simply selling fuel based on their own cost. They may have long term contracts and/or just not buy fuel all that often so it is possible for that on any given day, their costs are askew with average retail rates. Now I guess they will hire someone to monitor retail fuel prices every day to make sure they don't undercharge startups resident at Moffett Field when they occasionally buy fuel. Maybe this will make a little bit more money for Federal Government. Maybe the extra revenue will be lost in the extra overhead.

    3. Re:Not a subsidy? by WWJohnBrowningDo · · Score: 1

      You missed the next part:

      Further, in accordance with Federal law, NASA does not collect state and local fuel taxes as such taxes are not payable for fuel sold at civil airports owned by the United States.

      The federal government is immune from state and local taxes, therefore fuel sold on a federally-owned airport meant for use by federal agencies is exempt from state and local taxes. The problem is that Google brought and used some of this below-market-price fuel and thus skipped the state and local fuel taxes.

    4. Re:Not a subsidy? by Arethan · · Score: 4, Insightful

      Sounds like the taxing agencies that got stiffed on the previous sales should contact H2-11 to collect the back taxes owed. Problem solved. No story here. Stop sensationalizing nothingness; it's lame.

    5. Re:Not a subsidy? by Charliemopps · · Score: 3, Informative

      It wasn't even remotely Google. It's a different company entirely.

    6. Re:Not a subsidy? by fche · · Score: 1, Funny

      Rumack, Randy: [together] It's an entirely different kind of flying.

    7. Re:Not a subsidy? by msauve · · Score: 2

      Sounds to me like either NASA gets a good deal for bulk or long term contracts, and sold off what they didn't need at "full cost," which would seem to be a wash.

      The market (I'd assume they mean the immediate "spot") price can be expected to be higher because there's no contractual commitment, and the volume is less.

      I don't see any problem - the gov't didn't subsidize anyone, and Google found a cost-saving source for jet fuel. It's not clear what the submitter thinks would be fair, but it seems that they think the gov't should be in the market to make a profie or the fuel companies should make even more profit?

      --
      "National Security is the chief cause of national insecurity." - Celine's First Law
    8. Re:Not a subsidy? by Anonymous Coward · · Score: 2, Interesting

      It wasn't even remotely Google.

      You're interrupting Slashdot's regularly scheduled Scroogling.

      Now Dice won't get all that lovely Microsoft payola. Let the 'Softies have their two minutes of hate, you fascist.

    9. Re:Not a subsidy? by sumdumass · · Score: 5, Informative

      Its a little deeper then this. This letter is confirmation on an audit by some inspector. NASA leases several of the google jets for earth science related tasks and NASA was only allowed to sell them fuel to the extent of covering those missions.

      What ended up happening is that H2 11 purchased fuel for private flights under the same account that had nothing to do with NASA or the government so the selling of that fuel was against the contract (possible law too). So the audit came out, someone asked about it, NASA confirmed it and said they didn't have any way to address it previously but do now.

      http://oig.nasa.gov/Special-Re...

      Now I didn't read the audit enough to see whether or not anyone explicitly made it clear that only fuel used for government services could be purchased under the contract. I'm going to assume it was an oversight or misunderstanding and the proper accounts weren't changed over when fueling. Pilots probably don't give one rats ass about the cost of fuel for someone else's aircraft they have to fly. They certainly wouldn't be privileged to the contracts NASA and H2 11 were part of and likely just gave the account name or number or charge card they were given for the government usages. I used to work for a company that operated heavy equipment and off road use fuel was tax free also. We had two fuel cards for when they were on site, one for the trucks and one for the equipment to keep tax credits separate and drivers often used the same card for everything. When asked why they thought they had a second fuel card for, they said in case they needed to get fuel at a stop the first one wasn't accepted at. Either management lacked something, the drivers and operators lacked something, or the fact that they could fuel the equipment in the yard and rarely needed to get more on site (outside what was brought with them), allowed them to forget what they were told once a long time ago.

    10. Re:Not a subsidy? by Guspaz · · Score: 3, Informative

      The NASA letter states clearly that fuel sold at government-owned civil airports is not taxable. There are no back taxes owed.

    11. Re:Not a subsidy? by LifesABeach · · Score: 0, Flamebait

      What I find interesting is that NASA knows how much was sold, accepts that the sale was below market value. So my first question is, "why did NASA sell fuel to anyone?" Is NASA a public fuel station for anyone? Have the "Enlighted ones who do not suffer from 'Go Fever' decided that NASA should become a "Profit Center?" What else has NASA sold, at Tax Payer expense?

    12. Re:Not a subsidy? by LifesABeach · · Score: 1

      If only Jet Fuel were like selling bags of sand.

    13. Re:Not a subsidy? by Anonymous Coward · · Score: 0

      Of course, Sashdot will not consider this to be news, because they're paid not to.

      I'm paid to suck dick and I'm damn good at it. Your point?

    14. Re:Not a subsidy? by LifesABeach · · Score: 1

      A case of Co-Mingling funds?

    15. Re:Not a subsidy? by JakartaDean · · Score: 1

      What I find interesting is that NASA knows how much was sold, accepts that the sale was below market value. So my first question is, "why did NASA sell fuel to anyone?" Is NASA a public fuel station for anyone? Have the "Enlighted ones who do not suffer from 'Go Fever' decided that NASA should become a "Profit Center?" What else has NASA sold, at Tax Payer expense?

      I would guess that there is a long tradition of people buying fuel on credit from most or all airports. It's not like your car where you can pass one gas station you don't like and go to the next one a mile down the road. You can't take off without a flight plan and enough fuel to get you to your destination plus a reserve. The system would have evolved to allow anyone to buy fuel from the airport they're parked at now -- any other system would be at best inefficient, at worst unsafe.

      --
      The subject who is truly loyal to the Chief Magistrate will neither advise nor submit to arbitrary measures (Junius)
    16. Re:Not a subsidy? by sumdumass · · Score: 5, Informative

      It doesn't appear to be. It seems that it is a complete misunderstanding by the fuel company. From the audit,

      "We found that a misunderstanding between Ames and DLA-Energy personnel rather than intentional misconduct led to H211 enjoying the discounted fuel rate for flights that had no NASA-related mission. From September 2007 until August 2013, H211 purchased fuel at Moffett from DLA-Energy either directly or through NASA for both its personal (non-NASA related) flights and NASA science flights at a rate intended only for government agencies and their contractors. Even though Ames officials accurately reported to DLA-Energy the nature of the Centerâ(TM)s agreement with H211, DLA-Energy misunderstood that H211 was drawing fuel for both private and NASA-related missions."

      The audit also says that the h211 company has flown over 200 missions for NASA at no cost to NASA and as a result of the misunderstanding, H211 paid between 3.3 and 5.3 million less than market rate for fuel in the time frame because of it. It's a pretty interesting read once you start into it.

    17. Re:Not a subsidy? by elbonia · · Score: 3, Informative

      You don't seem able to follow simple facts. The fact of the matter is that these are private jets bought by executives, who happen to work for Google, with their own private money and for their own private needs. That makes it have nothing to do with the Google corporation. Not a single penny from Google Inc. went to this company. You're clearly the mook on this one.

    18. Re: Not a subsidy? by Anonymous Coward · · Score: 1

      That's not the case. I've never once seen a gas pit at an airport-from tiny municipal airports to international ones-that didn't require preauthorizarion. Same with fuel trucks.

      And an inability to afford fuel is never an acceptable reason for a pilot in command to plan a flight poorly.

    19. Re:Not a subsidy? by Anonymous Coward · · Score: 1

      Maybe I'm simple minded, but they sold it to a private company. Just because they use a "government owned" civil airport shouldn't lead to h2-11 not paying the taxes. If it was a government owned entity, at which point they would probably get discounted fuel [I assume to push a project thru faster]I would see your point.

      Not you, but its how they wrote up the rules [or I guess the tax code} for "government-owned civil airports", which is just stupid.

    20. Re:Not a subsidy? by peppepz · · Score: 2
      In fact, arguably it's not NASA that got ripped. It's the federal government that lost money, between $3.3 million and $5.3 million according to TFA, in taxes that would be collected from that fuel, had Google execs bought it like everyone else does.

      Basically what is happening here is poor people paying to let the richest people on Earth fly they own private jets. But the company that is benefiting from that is only in personal union with Google, so "don't be evil" doesn't apply here. IANAL.

    21. Re:Not a subsidy? by camperdave · · Score: 5, Informative

      NASA's Moffett field is only a ten minute from Google Headquarters. H2-11 is paying $108,000+ a month to rent hangar space at the airport PLUS NASA gets to use the aircraft for science missions. That's $1.3million per year plus an obligation to fly science missions for NASA. When they're fuelling up at Moffett, they pay full price for the only fuel available: non-taxed government fuel. I don't see the problem. Any other civilian organization could have organized similar arrangements. This isn't any sort of "billionaires only" club. Essentially it's no different than civilian workers eating government chow at Federal cafeterias.

      --
      When our name is on the back of your car, we're behind you all the way!
    22. Re:Not a subsidy? by Anonymous Coward · · Score: 0

      Your post basically sums up my experiences in the public sector, explaining why there is so much pointless bureaucracy. Most of it is to comply with more rules and regulations than any private business has ever seen - all of it implemented by politicians claiming to be reducing/preventing waste.

    23. Re:Not a subsidy? by nomadic · · Score: 2

      Eh, I was ready to be outraged but after glancing through the OIG report it doesn't look that bad. Apparently the Google dudes paid a market rate for the hangar space, and let NASA use one of their planes for free (that would otherwise cost thousands of dollars per flight hour). I would suspect that even taking into account the discounted fuel NASA came out ahead.

    24. Re:Not a subsidy? by peppepz · · Score: 2

      They got the subsidized fuel price, by mistake, even for private flights unrelated to NASA.

    25. Re:Not a subsidy? by nomadic · · Score: 2

      Right, I'm saying that as a taxpayer I'm not going to get angry over that mistake because in the end NASA got a good deal.

    26. Re: Not a subsidy? by Anonymous Coward · · Score: 1

      If someone gets a discount via the government that no one else recives, that's subsidizing. It's the main reason some companies succeed and some don't... Walmart comes to mind. Tax free government funds your building and utilities for a decade to move to town, that kind of stuff... It's good to be American for some!

    27. Re: Not a subsidy? by Anonymous Coward · · Score: 0

      Wow you drank a lot of the cool aid.

    28. Re:Not a subsidy? by Anonymous Coward · · Score: 1

      Have you been to Ames (where Moffett field is)? I also work a few blocks away, and have had reason to collaborate with NASA on a few projects.

      Ames is a secure base. As a "normal" engineer at a small company working with NASA, I can't just drive on any time I want to. I have to arrange with security first. The idea that I could bring any large equipment with me or house company equipment there is laughable. I don't get access to the cafeteria (don't even know if they have one). I don't get access to very much at all.

      The amount of lawyering, paperwork and background checks required of "any other civilian organization" is huge and it absolutely results in larger organizations having more access to NASA personnel, IP and contracts. That's valuable stuff. This is a club for big defense contractors (Google very much is one of those).

    29. Re:Not a subsidy? by Anonymous Coward · · Score: 0

      It wasn't even remotely Google.

      You're interrupting Slashdot's regularly scheduled Scroogling.

      Now Dice won't get all that lovely Microsoft payola. Let the 'Softies have their two minutes of hate, you fascist.

      That is my main complaint against Slashdot as well, it is always such a Microsoft lovefest.

    30. Re:Not a subsidy? by afidel · · Score: 2

      So the net effect is that the fuel company that screwed up the instructions is out the ~$4.3m in markup they could have made selling the fuel to H211 as a private company, sounds like a complete non-issue to me, if you screw up the paperwork and lose out on potential income too bad. Why this is any kind of an investigation is beyond me, the government is out $0, they got free use of the plane over 200 times, and they got rental income for hanger space that most likely would have been empty if H211's plane wasn't parked there. In fact the government is out money for the audit (or out auditor time which is the same thing since I'm sure there's plenty of actual waste or malfeasance they could have been uncovering).

      --
      There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
    31. Re:Not a subsidy? by maccodemonkey · · Score: 1

      NASA's Moffett field is only a ten minute from Google Headquarters. H2-11 is paying $108,000+ a month to rent hangar space at the airport PLUS NASA gets to use the aircraft for science missions. That's $1.3million per year plus an obligation to fly science missions for NASA. When they're fuelling up at Moffett, they pay full price for the only fuel available: non-taxed government fuel. I don't see the problem. Any other civilian organization could have organized similar arrangements. This isn't any sort of "billionaires only" club. Essentially it's no different than civilian workers eating government chow at Federal cafeterias.

      Because it wasn't part of the deal. The audit said as much, and the fuel was never earmarked for private use.

      If I buy a candy bar at a gas station, I don't get my fuel at cost. Suggesting because they rent a hanger they should get their fuel at cost makes just about as much sense.

    32. Re:Not a subsidy? by reve_etrange · · Score: 1

      In fact the government is out money for the audit (or out auditor time which is the same thing since I'm sure there's plenty of actual waste or malfeasance they could have been uncovering).

      To be fair, uncovering non-malfeasance is probably a not-too-unfrequent side-effect of uncovering real malfeasance.

      --
      .: Semper Absurda :.
    33. Re:Not a subsidy? by chaboud · · Score: 5, Informative

      A number of public and private entities use the field. H211 (and others) typically do two things:

      1. They pay fees to NASA for the storage and operation of their aircraft at this airfield.
      2. They agree to allow NASA to install equipment in these aircraft and afford NASA the use of these aircraft for experiments.

      In exchange for this, they get cheap fuel, but not below NASA's cost. Sure, they're not paying the normal taxes on this fuel because federal regulations prohibit the taxation of fuel sold from government owned airfields, and federal regulations allow for private operations to use NASA facilities under contract with NASA.

      NASA has hangars, fuel storage/delivery facilities, a short supply of aircraft for research, and no money. Private entities have aircraft, no place to park them near their bases of operation, and money.

      Would it piss you off if frequent government contractor Lockheed Martin operated private aircraft out of Moffett? Oh! Wait! They do! Would you be pissed if the highly publicized and technologically interesting solar plane venture Solar Impulse parked their plane in one of the hangars and threw parties around it while in the Bay Area? Oh! Wait! They did!

      People need to chill out about this. This is no big deal. Either change the laws creating this condition or kick private entities out of Moffett, an idiotic action that would likely result in the financial collapse of an already under-funded operation of NASA.

      But, yes, I'm willing to grant your first statement... you are simple minded.

    34. Re:Not a subsidy? by chaboud · · Score: 1

      I've been on base to get a tour of the Solar Impulse plane.

      I filled out a half-page form and brought it with me.

      There are a number of smaller operators that operate out of Moffett. Of course Lockheed Martin has some operations there (They're a couple blocks away), too, but don't make it out to be some grand government conspiracy. A place in desperate need of money and planes, with spare space for planes, found a private party that was:

      A) Willing to give them lots of money.
      B) Wanted to park planes.

      Now and then, they make them available for experiments (i.e. joy rides).

      And despite the billboard advertising it, there's no way that I'd eat at the commissary.

    35. Re:Not a subsidy? by Anonymous Coward · · Score: 0

      imagine if this is a jet company owned by Steve Balmer and Bill Gates from Microsoft, you guys would be all over it

    36. Re:Not a subsidy? by queazocotal · · Score: 1

      'Sounds to me like either NASA gets a good deal for bulk or long term contracts, and sold off what they didn't need at "full cost," which would seem to be a wash.'
      Won't somebody think of the oil companies!

    37. Re: Not a subsidy? by Hognoxious · · Score: 1

      You don't always land at the airport you intend to. What if you land at one you don't have a contract with - get your mates to charter a bus and a load of jerrycans?

      The answer is they'll sell for cash; it's only on account that they need preathorisation. It's happened more than once that an airliner has had a whip-round from the passengers.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    38. Re:Not a subsidy? by peragrin · · Score: 1

      You are also forgetting volume discounts.

      I bet NASA doesn't pay the same price for jet fuel as a small private jet does.

      So you get volume discount, taxes, handling and profit margins.

      So in reality NASA didn't make money from the endeavor but didn't lose it either.

      --
      i thought once I was found, but it was only a dream.
    39. Re: Not a subsidy? by Anonymous Coward · · Score: 0

      Getting way off topic; I think this conversation has landed at another airport.

      In this case, the Google-founder planes were very much intended to be at that airfield.

    40. Re:Not a subsidy? by Anonymous Coward · · Score: 0

      You don't see the problem because your Google glasses are heavily rose-tinted.

      Fortunately, the authorities / officials saw the problem and the situation has now been remedied: the Google founders will now pay the tax.

    41. Re:Not a subsidy? by StripedCow · · Score: 1

      Perhaps in the future I should get my groceries at a government-owned supermarket then.

      --
      If Pandora's box is destined to be opened, *I* want to be the one to open it.
    42. Re: Not a subsidy? by Anonymous Coward · · Score: 0

      How many millions did the audit cost to perform?

    43. Re: Not a subsidy? by Anonymous Coward · · Score: 0

      There is some story here. Could you or I get such a deal ? Fuck NO. With wealth comes priviliges, and even better discounts.

    44. Re:Not a subsidy? by Anonymous Coward · · Score: 0

      You can't get access to that particular facility, but there are plenty others. For example, some VA hospitals have stores inside where you can buy anything (even 60" TVs) without being taxed. That's right. You too can get "taxpayer-subsidized" food, clothes, electronics, and whatever else they sell, just by walking into a VA!

      dom

    45. Re:Not a subsidy? by Anonymous Coward · · Score: 0

      Yeah, but you don't make a big deal out of the non-malfesance and cover up the malfeasance- which is what's going on here.

    46. Re: Not a subsidy? by Anonymous Coward · · Score: 0

      sure you xan, if you enter a partnering agreement with a goverbment agency that restricts yiur iperations to a place where they have the only supply. we call that enlisting and the comissary.

    47. Re:Not a subsidy? by Anonymous Coward · · Score: 0

      Clearly; because no one would ever conflate two separate companies founded by the same person. Chill out would you.

    48. Re: Not a subsidy? by nonnald · · Score: 1

      sure you xan, if you enter a partnering agreement with a goverbment agency that restricts yiur iperations to a place where they have the only supply. we call that enlisting and the comissary.

      looks like your keyboard has several off by one errors

    49. Re:Not a subsidy? by hey! · · Score: 1

      The subsidy is the "opportunity cost" of selling something at below market rates. If NASA sells a thousand gallons at $5.00 gallon when the market cost is $10.00, that's effectively a $5000 subsidy, even though the cash is flowing *into* NASA rather than out.

      The situation is complicated, though, by the fact that the Google execs are allowing NASA to use their planes for research. It may well be that overall the relationship is a win-win, but this kind of complicated and cozy relationship between a government agency is probably not a good idea given that it makes telling good vendor relations from special favors impossible.

      --
      Post may contain irony: discontinue use if experiencing mood swings, nausea or elevated blood pressure.
    50. Re:Not a subsidy? by Anonymous Coward · · Score: 0

      Yeah, it's Google. Nothing wrong here...

    51. Re: Not a subsidy? by AK+Marc · · Score: 1

      And what stops the airport from selling the fuel itself, banning all others, and charging too much for it? Most airports have contracts with a single vendor. That's the case here, but to prevent profit seeking from NASA, NASA is required by federal rules to sell it at cost, and no higher.

      --
      Learn to love Alaska
    52. Re:Not a subsidy? by LifesABeach · · Score: 1

      So I can roll up in my Katana at the 'Cape and get some Av Fuel? Your comment is obviously based on real knowledge?

    53. Re: Not a subsidy? by LifesABeach · · Score: 1

      So how is it that Google can buy, but I can't?

    54. Re:Not a subsidy? by LifesABeach · · Score: 1

      You're burying yourself on this one. You might want to check what happened to a General White, and the C-17. The program needed the half-billion dollars, but Congress didn't approve it. He came very close to going to jail over it.

    55. Re: Not a subsidy? by AK+Marc · · Score: 1

      You can. Step 1, pay NASA more than $1,000,000 a year for hangar space at a NASA facility. Step 2, buy it. Google isn't the only one with this arrangement (And it isn't even Google, but one of the richer Google employees). It's a common arrangement that's been around probably longer than you've been alive, it's just now, someone's making a deal about it and linking it to Google.

      --
      Learn to love Alaska
    56. Re: Not a subsidy? by Anonymous Coward · · Score: 0

      Wow you drank a lot of the cool aid.

      Considering that this is a story about NASA, wouldn't Tang be more apropos?

    57. Re:Not a subsidy? by Wootery · · Score: 1

      People need to chill out about this

      you are simple minded

      It was already unnecessary to be an asshole about it, but you made it ironic as well.

    58. Re:Not a subsidy? by Samizdata · · Score: 1

      I tried to check it out. Can you throw in a LITTLE more info for those of us NOT in the know?

      --
      It's not the years, honey, it's the mileage. - Colonel Henry Walton Jones, Jr., Ph.D.
    59. Re: Not a subsidy? by Anonymous Coward · · Score: 0

      Sorry, I wasn't clear. Pre-authorization on a credit card, meaning they'll set a large hold. But I've never once needed a contract to fuel up at an airport–if an airport has fuel for sale, odds are you'll be getting it.

      Anyway, the point is that there's no long tradition of people buying fuel on credit at most airports, (unless you're talking about credit cards). Unless you're in the American midwest and someone feels particularly bad for you, nobody's going to give you fuel for free and hope you pay them back, which is the arrangement he implied.

      In efficiencies abound in aviation, but the pilot is responsible for making prudent and safe decisions, before, during, and after flying. A lack of funds for fuel isn't a scenario that's accounted for as he theorized, and it's far less inefficient than a post-pay system, and the safety factor is a non-issue. If you don't have the fuel required for the flight plan, you just don't fly. It's not a mode of transportation for people who can't get the money together for a tank of gas.

  2. Good old NASA... by rmdingler · · Score: 2, Funny

    helping out the little guy!

    --
    Happiness in intelligent people is the rarest thing I know.

    Ernest Hemingway

  3. Recouping the money is probably impossible by grahamsaa · · Score: 2

    But I'm much more interested in hearing about the rationale for offering this deal. Did NASA get anything in return? Did H2-11 request a subsidy? Was this a simple accounting error or due to corruption. The "what" here is far less interesting to me than the "why".

    --
    Facts have a liberal bias.
    1. Re:Recouping the money is probably impossible by sumdumass · · Score: 1

      My guess would be that it was just there and they needed fuel one day. When H2-11 discovered how much cheaper it was, they probably needed fuel quite often. It's not uncommon for airports to supply fuel services for crafts not controlled explicitly for them.

    2. Re:Recouping the money is probably impossible by sumdumass · · Score: 1

      Correction, it appears that NASA was using their planes for "earth science" projects and was authorized to sell the fuel for the government work. What happened is that for some reason, all the fuel for the planes were purchased using this government discount so fuel for private flights not related to the government was purchased at the discounts.

    3. Re:Recouping the money is probably impossible by Anonymous Coward · · Score: 1

      Perhaps reading the article?

    4. Re:Recouping the money is probably impossible by phantomfive · · Score: 1

      Did NASA get anything in return?

      Yes. And stuff.

      --
      "First they came for the slanderers and i said nothing."
    5. Re:Recouping the money is probably impossible by vakuona · · Score: 1

      Aircraft are fuelled at airports. And aircraft typically only fuel enough to get them to their destination. So these planes would have to be fuelled at the airfield anyway. Now the question is whether NASA should have sold the fuel at full price and included taxes (which they can't do), whether they should ask H2-11 to provide their own fuel, which is probably a very inefficient way to run an airfield, or whether the government should change the law to ensure that government owned airfields are ableto sell fuel at the market price.

      Oh, and someone needs to think of Exxonmobile!

  4. Why by macraig · · Score: 0

    Just WHY?

    1. Re:Why by CrimsonAvenger · · Score: 4, Insightful

      Hmm, from TFA, it seems that they're required, when they sell this sort of stuff (surplus to needs fuel, in this case) to sell it at cost.

      Since "cost" is below "retail" (pretty much by definition), and since the government doesn't pay fuel taxes (to itself or any State government), "cost" works out to be quite a bit below "retail".

      So, NASA got rid of some fuel that was excess to their needs, got paid for it at exactly the rate that they paid for it (making it a wash in bookkeeping), and did it entirely in accordance with applicable law.

      In other words, nothing to see here, move along.

      --

      "I do not agree with what you say, but I will defend to the death your right to say it"
    2. Re:Why by Anonymous Coward · · Score: 0

      If this would have been a non-Google company you would be bitching and moaning about how bad NASA has it without the need for corporate welfare and the breakdown for everything so much as the cost of the electricity to run the fuel pumps.
       
      More Slashdot hypocrisy.

    3. Re:Why by sumdumass · · Score: 4, Informative

      The fuel wasn't surplus. But the problem was altogether different.

      An audit was conducted concerning Google's aircraft being stored that the ames facility. It turns out that they lease a hangar from NASA as market rates but also allow their aircraft to be used by NASA for Earth Science projects.

      http://oig.nasa.gov/Special-Re...

      In the course of this, the supplier of fuel for the site charges a market rate for everyone but NASA who gets charged a cost plus rate. NASA had them fueling the aircraft (which is more then just their jet) on the cost plus rate for the NASA projects but an oversight happened and they ended up being charged cost plus for everything including private non-government flights. The audit doesn't place blame or malice in it and writes it off as a misunderstanding. The letter in the article is confirmation that NASA was doing it, didn't have anything in place to detect it, cannot go back and fix it, but have that all taken care of now and the separate rates will be applied appropriately.

    4. Re:Why by WankersRevenge · · Score: 4, Interesting

      Considering Grassley investigated NASA last year about some viking photo, my guess this has little to do with governmental accounting, and more about someone in NASA pissing in his Cheerios.

    5. Re:Why by Anonymous Coward · · Score: 0

      Try reading the fucking article.

    6. Re:Why by Anonymous Coward · · Score: 0

      An audit was conducted concerning Google's aircraft being stored that the ames facility. It turns out that they lease a hangar from NASA as market rates but also allow their aircraft to be used by NASA for Earth Science projects.

      How is this +5 Informative, when you get basic details like the owner of the aircraft wrong? The plane was owned by H2-11, which in turn is owned by some of the founders of Google. It is not owned by Google in any way, shape or form, so to call it "Google's aircraft" is a flat out lie.

    7. Re:Why by Anonymous Coward · · Score: 0

      This is a really interesting possibility. I wonder if congressmen would ever start an investigation into a gov't agency for blackmail purposes, and then i.e. drop it when their donors get a contract.

    8. Re:Why by sumdumass · · Score: 1

      Does the association to google make you cry or something? Are you afraid it will somehow lead to more graft or something when people notice the connection to other shell companies that google benefits from??

      So I guess the question might be is who cares? Obviously not you- or you don't care enough to put a name close to your post so the dog can chase the rabbit down the hole. So you car just enough to mention something but not enough to be associated with that mentioning which makes me wonder why you even bothered.

    9. Re:Why by Anonymous Coward · · Score: 0

      You sound like a fag.

  5. They sold it at cost? by ZorinLynx · · Score: 2

    From what I read, it looks like they sold the fuel at "full cost", rather than "market rate".

    Does this mean they sold the fuel at the same cost NASA paid for it? If so, what's the big deal? NASA is a government agency, not a business. They don't have to sell fuel at a profit.

    It's not like they were giving it away or losing money on it!

    1. Re:They sold it at cost? by Anonymous Coward · · Score: 0

      Exactly. Now, I think NASA should be forced to sell at market rate so as to not unfairly compete but I doubt they had even considered a process for that when this all started. As for past recovery, they should send a letter to Google with a -request- for funds in the amount determined to be the difference but without a requirement to pay. (As they legally sold the fuel in the past to Google, Google is under no obligation to pay more for it). Drop that in Googles lap and see what they do. (And the press can choose to harass them over it and leave NASA alone)

    2. Re:They sold it at cost? by Required+Snark · · Score: 0, Flamebait
      You have the mentality of a peasant. Whatever the nobles do, it must be OK because they would never take advantage of their position at your expense. They're so much more deserving then you.

      Let's use a car analogy: suppose that you buy gas at the same station that Google execs do. They get charged the rate that the gas costs at the refinery, and you pay retail. Their gas is 25% cheaper (made up value) then yours. You have to pay for shipping costs, infrastructure costs for the service station (electricity, upkeep), the salaries of everyone involved between the refinery and the pump, etc. All that stuff has to be paid for to get the gas to the pump, so you are subsidizing their gas.

      Except it's not a private company selling the gas, it's government services paid for by your taxes.

      Look at Eric Schmidt's compensation at Google.

      In its 2011 'World's Billionaires' list, Forbes ranked Schmidt as the 136th-richest person in the world, with an estimated wealth of $7 billion. Google gave him a $100 million equity award in 2011 when he stepped down as CEO.[57]

      According to insider transaction data available at Yahoo! Finance, Schmidt sold Google stock worth more than $6 billion from January to May 2013.

      So you think it's fine to use tax money to make it cheaper for a guy worth $7 Billion to fly his private jet. What the hell is wrong with you?

      --
      Why is Snark Required?
    3. Re:They sold it at cost? by Anonymous Coward · · Score: 0

      Only true if you live in a world where Google wouldn't have paid taxes normally. By not paying taxes here, Google denied the public (ie the rest of us) the millions of dollars. So, Google stole from the public with the help of NASA.

    4. Re:They sold it at cost? by Anonymous Coward · · Score: 0

      My cousin buys fuel at cost from some company that uses it for their cars.
      What's the big fucking deal?
      Just because you don't know anyone who will sell you fuel at cost doesn't mean the rest of us shouldn't be allowed to use our friendships in this way.

    5. Re:They sold it at cost? by JakartaDean · · Score: 5, Informative

      You have the mentality of a peasant. Whatever the nobles do, it must be OK because they would never take advantage of their position at your expense. They're so much more deserving then you.

      Let's use a car analogy: suppose that you buy gas at the same station that Google execs do. They get charged the rate that the gas costs at the refinery, and you pay retail. Their gas is 25% cheaper (made up value) then yours. You have to pay for shipping costs, infrastructure costs for the service station (electricity, upkeep), the salaries of everyone involved between the refinery and the pump, etc. All that stuff has to be paid for to get the gas to the pump, so you are subsidizing their gas.

      Except it's not a private company selling the gas, it's government services paid for by your taxes.

      +5 Insightful? I could see +5 Vituperative, but your post lacks both insight and manners. Rather than calling him a peasant, why didn't you spend time reading the linked letter and article widely cited above? NASA says, for example, "While we concluded that the fuel arrangement between Ames and H211 did not result in an economic loss to NASA or DLA-Energy..." The cost H211 paid was the fully loaded cost. Go look that up in an management accounting text. There were no government services paid for by anyone's taxes. The price they paid was below market rates -- at the time the deal was signed all fuel was provided by DoD and sold at subsidized price (DoD craft) or fully loaded cost (non-DoD craft, including the H211 craft that NASA sometimes used). Here's a flash for you: sometimes these craft just flew in the air, so they didn't have the option of going to another "gas station" down the road -- Moffet Field was the only game in town for NASA, and was often convenient for H211 folks. Cost recovery is the default option for charges at most airports, and managers are very good at calculating fully loaded costs.

      The problem is that H211 was getting a better deal than other craft at other airports in the area, not that the government or taxpayer was losing money. Given how much NASA was saving by having easy access to H211's aircraft, everyone was winning. However, NASA decided it looked bad, so to avoid any allegations of impropriety (like yours), it was in the government's interest to collect market rates and pass the profit on to the Treasury, so they've been doing that since September 2013. Mr. Schmidt's compensation is irrelevant.

      --
      The subject who is truly loyal to the Chief Magistrate will neither advise nor submit to arbitrary measures (Junius)
    6. Re:They sold it at cost? by Anonymous Coward · · Score: 1

      The big fucking deal is that it's TAX PAYER MONEY.

    7. Re:They sold it at cost? by Anonymous Coward · · Score: 0, Insightful

      Could you PLEASE learn the difference between "then" and "than"? You sound like such a fucking idiot.

    8. Re:They sold it at cost? by Anonymous Coward · · Score: 0

      So you think it's fine to use tax money to make it cheaper for a guy worth $7 Billion to fly his private jet. What the hell is wrong with you?

      Clearly you remain confused. There is no tax money involved. NASA purchased fuel for $N and sold it for $N. What tax dollars are used?

    9. Re:They sold it at cost? by Chas · · Score: 0, Troll

      And where...EXACTLY...did the taxpayer LOSE money?

      Oh yeah! THEY DIDN'T!

      And where...EXACTLY...is it stated in NASA's charter that they MUST turn a monetary profit on things?

      Oh yeah! THEY DON'T!

      Plus NASA got free use of a jet for science missions out of it!

      So, basically, you, Senator Grassley, and "the taxpayer" DON'T HAVE A LEGITIMATE BITCH.

      So, still sandy about this?

      --


      Chas - The one, the only.
      THANK GOD!!!
    10. Re:They sold it at cost? by Hognoxious · · Score: 1

      And where...EXACTLY...did the taxpayer LOSE money?

      In the taxes that should have been levied on the fuel for private use .i.e. non NASA activities.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    11. Re:They sold it at cost? by Anonymous Coward · · Score: 0

      Then don't bitch about the taxes they hit your happy ass with. Seriously. Even if you become a lotto winner and a multimillionaire- NO BITCHING, PERIOD.

    12. Re:They sold it at cost? by Chas · · Score: 1

      Again, NASA is under no obligation to be a tax collection agency for the US government (it's not in their charter).
      Also, at the airfield in question, fuel sold is NOT supposed to BE taxable.

      So the government wasn't entitled to taxes. Period. Thus, the taxpayer didn't lose out on jack squat.

      --


      Chas - The one, the only.
      THANK GOD!!!
    13. Re:They sold it at cost? by jollyreaper · · Score: 1

      Should not have been modded down. Shame on you guys.

      --
      Kwisatz Haderach
      Sell the spice to CHOAM
      This Mahdi took Shaddam's Throne
  6. Free Google Jet Fuel Give-out for SF Poor Kids! by PolygamousRanchKid+ · · Score: 4, Funny

    In an attempt to spin this correctly, Google announced that it will be giving out free jet fuel for SF area slum kids to sniff!

    --
    Schroedinger's Brexit: The UK is both in and out of the EU at the same time!
    1. Re:Free Google Jet Fuel Give-out for SF Poor Kids! by Anonymous Coward · · Score: 1

      Could be worse. Years ago Google was giving out Chromium 6 for the kids to sniff. Fortunately they've stopped and are currently distributing Chromium 35, which is way better.

  7. Not just Google by Todd+Knarr · · Score: 5, Insightful

    It reads like it wasn't a subsidy to Google, it's that NASA sold fuel to all it's qualified partners at cost rather than at market rates. So the taxpayers didn't pay anything for a subsidy. NASA recouped what it paid for the fuel, it just didn't make a profit on the transaction. I don't see any compelling reason to require a government agency like NASA to turn a profit on it's deals, as long as it doesn't lose money on them either.

    1. Re:Not just Google by sumdumass · · Score: 2

      It's deeper then that. The fuel at costs was supposed to be only for fuel used on the NASA missions the planes do. All the fuel for private flights were supposed to be purchased under a different account for market rates.

      This letter is in response to an internal audit that disclosed all the fuel was being purchased at costs instead of separating them like they were supposed to be.

      http://oig.nasa.gov/Special-Re...

    2. Re:Not just Google by Anonymous Coward · · Score: 0

      It was less deep than that. It was a tit-for-tat deal between NASA and H211: cheap fuel for free use of the aircraft (H211 didn't charge NASA for the use of the aircraft which did 200 missions per year for NASA).

      However tit-for-tat doesn't look very nice for accountancy, so they reversed this in 2013. I am guessing NASA now pays for the use of the aircraft. and H211 now pays market value for non-NASA-mission flights.

    3. Re:Not just Google by sumdumass · · Score: 1

      No, the deal, according to the audit report was for NASA fuel rates for NASA missions and regular fuel rates for other flights not concerning or connected to the government. The audit found that a mistake or misunderstanding by the provider of the fuel caused all the fuel to be at NASA's rate.

      And according to the audit, NASA always paid for some flights, they just had something along the order of over 200 flights at no cost to them also. The deal they had was actually fair for both parties in many respects and h211 or google depending on how you look at them, actually went above and beyond the deal some 200+ times.

  8. Really? by The+Cat · · Score: 0, Troll

    Corporate executives drinking deeply from the public well? Shocking.

  9. priorities by hilather · · Score: 4, Insightful

    Seriously. Google and other companies in silicon valley skip out on billions worth of taxes by funneling it through Ireland and this is what you want to focus on. Jet fuel?

    1. Re:priorities by Anonymous Coward · · Score: 0

      Of course, gas is always funny.

    2. Re:priorities by Anonymous Coward · · Score: 0

      I'm curious if it's standard policy for such 'sales', that are most likely tax deducted, to be normal. That H211, is Google exec affiliated, makes this just news fodder.

      If such sales like this are done fairly often, what's the big deal? If they were given a below market rate, rather than what NASA paid, why were they given that rate? Did someone lowball for a reason, or this just administrative ineptitude.

  10. Red Herring by Above · · Score: 2, Insightful

    The issue here is that Google got to keep their jets at AMES at all, not that they got fuel subsidies. NASA sold them fuel the only way NASA knew how, and probably in full compliance with regulations. The issue is not with the fuel sales, but with Google being able to keep their jets their at all.

    Anyone familiar with the area knows that AMES is much more convenient for a private plane of the size the Google Execs own than pretty much any other option. SFO, OAK, and SJC are all busy, and have various red-tape on them. Airports like SQL are too small for the google jets. Normally no non-NASA flights can be at AMES. There are no Apple Jets, no Cisco Jets, no Facebook Jets at this airport. Google attempted to get around this by offering free instrumentation on their jets to NASA.

    This is the first step in calling bullshit. This should have never happened. A few instruments does not make it a NASA project. Google should have never been there in the first place. Someone gave them preferential treatment using the instruments as an excuse.

    1. Re:Red Herring by kqs · · Score: 5, Informative

      From what I have heard, some years ago the government cut funding to NASA and told them "you need to have public/private partnerships to make money".

      As part of this initiative, NASA leased part of AMES which they were not using to Google (for quite a lot of money), and did a deal where they could use planes for NASA science missions. Note that they didn't do this because they wanted to; they did this because the US govt told them to do this sort of thing.

      So Google got preferential treatment by... renting excess space at market rates. A good deal for Google since it is close to their headquarters, and a good deal for NASA because they could continue doing science even when Congress cut their funding.

      I suspect that if Apple, Cisco, and Facebook had wanted to pay the same market rates then they could have also leased space at AMES, though since that is a farther distance from their headquarters (especially with Bay Area traffic) it would be less tempting to them.

    2. Re:Red Herring by phantomfive · · Score: 1

      The issue here is that Google got to keep their jets at AMES at all, not that they got fuel subsidies....... Google should have never been there in the first place

      Why? What's wrong with it? If the administrators at NASA are ok with it, I'm having trouble seeing why I should feel outrage.

      I feel mild outrage that I don't have a billion dollars, but I feel no jealousy that a couple of losers do have it.

      --
      "First they came for the slanderers and i said nothing."
  11. Oh come on! by sgt+scrub · · Score: 1, Insightful

    H2-11 should be prohibited from refueling at NASA Ames. That way they can crash, die, and people can bitch about how NASA refused to help a brother out.

    --
    Having to work for a living is the root of all evil.
  12. "What difference does it make?" by Anonymous Coward · · Score: 0

    How very Clintonian of you.

  13. seems kosher... by Anonymous Coward · · Score: 1

    If you come to my house and do some work I'm not going to charge you market rates on coffee... Maybe share the cost.

  14. seriously by PortWineBoy · · Score: 1, Funny

    Thank God that Google has never given anyone anything at below cost and has in no way benefited this country, Senator. /portwineboy@gmail.com

    --

    this sig deleted by another sig

    1. Re: seriously by Anonymous Coward · · Score: 0

      Hahaha. Are you for real? So if a company has does anything that "benefits the country" then their obligation to pay taxes magically disappears? This is what a fanboy looks like.

  15. Bio Jetfuel has been made since by Anonymous Coward · · Score: 1

    10 years now in the south of USA using algae. Why is it more expensive?? Even Indian Technology makes a mockery out of this subject, by making it even cheaper: http://www.thehindu.com/sci-tech/energy-and-environment/new-process-to-make-bioaviation-fuel-cheaper/article5743796.ece
    All it takes to make fuel is a high pressure vessel, high temps, absence of air and right material to turn into fuel. (almost anything will work except metals)
    Junkyards in Canada have been making biodiesel since the 1990's out of garbage, using the same process.
    South America has known how to turn back old tires into gasoline for at lest a decade.

  16. U Like it better... by Anonymous Coward · · Score: 0

    On "INVISO-POWER"...

  17. Giant Chicken by Anonymous Coward · · Score: 0

    Did anyone else notice the woman walking through the background of the video carrying a giant chicken?

    Are they doing some sort of psychology experiment?

    1. Re: Giant Chicken by poptix · · Score: 1

      Maybe they're trying to reCOUP their losses? (Eh? Ehh?)

      --
      Just because you disagree doesn't mean it's not true.
  18. NASA's been using the jets themselves... by Trax3001BBS · · Score: 1

    This was set in motion 2011. Searching for H2-11 (to see what it was) I came across how the jets were in the position to get the fuel, that "Google has no official relation with H211", and heck of a lot of information on this -in one link (dated Dec 11, 2011).

    "The Google leaders and their friends are not the only ones using the jets. NASA conducts flights on the planes with its own researchers and equipment to gain scientific data. That deal was part of the unusual agreement with NASA allowing the Google team the use of Moffett Field, an airport closed to private aircraft."

    Below is from the same link and explains NASA and Google's ties at least at Moffit field, I added the links for hanger one.

    "The Mercury News reported the three top executives at Google, Larry Page, Sergey Brin and Eric Schmidt, are offering to pay $33 million to finish the restoration of the historic airship hangar at Moffett Field. The giant structure, built in the 1930s and called Hangar One, "

    http://en.wikipedia.org/wiki/H... (1930s as a naval airship hangar for the USS Macon)

    Save Hanger one
    http://www.savehangarone.org/

    "The jets are not owned or operated by Google. Instead, the 3 Google leaders operate the fleet through an LLC called H211. Google has no official relation with H211. Ken Ambrose, the Director of Operations for H211, announced the funding offer at a public meeting this week. He also complained that NASA, which owns Hangar One, has taken too long to respond to the offer.

    On first glance, it sounds like a purely noble gesture by the Google trio. The building is in the middle of a project to strip toxic materials in its siding. Lack of taxpayer funding to complete the project has raised fears that could lead to the demolition of one of the world’s largest freestanding structures.

    But, as the Mercury News reported, “There’s a catch: They want to use up to two-thirds of the floor space of the hangar to house their fleet of eight private jets.” Most of the members on the Hangar One committee, along with the local congresswoman, support the idea, although there is some concern about the public-private partnership."

    http://techcrunch.com/2011/12/...

  19. Security Through Obscurity by mlookaba · · Score: 2

    That memo is a wonderful example of why exposing poor practices is difficult. The terminology is so dense that only those on the inside can truly understand it without a good deal of research. Most times people probably give up because they fear looking stupid for not knowing the lingo.

  20. This quote comes to mind... by Stormwatch · · Score: 1

    "We don't pay taxes. Only the little people pay taxes" -- Leona Helmsley

    --
    Circumcision is child abuse.
    1. Re:This quote comes to mind... by Anonymous Coward · · Score: 0

      In Leona's case that might be true since she tried to avoid paying taxes. But it could be seen that the little people don't pay taxes, the employer has to pay them for hiring someone. May just be me, since I don't look at hourly rate, I just look at how much my paycheck after Federal/state/SS is taken out since I will none of that money back ever.

  21. we all do it by Anonymous Coward · · Score: 0

    This is were fuel was for them. We do the same thing when driving. This is capitalism. Come on, Google provides value, leave them be.

  22. Of course this can be fixed by bytesex · · Score: 1

    Google is just going to have to be a little bit more compliant when it comes to FISA orders, that's all.

    --
    Religion is what happens when nature strikes and groupthink goes wrong.
  23. H2-11 fuel discount is not breaking news by Anonymous Coward · · Score: 0

    This story is known since last year.... what is now new about it?