The Department of Defense and the National Aeronautics and Space Administration have decided to end a little known arrangement with Larry Page and Sergey Brin that allowed the two Google Inc. (NASDAQ:GOOG) co-founders to operate their fleet of private jets using fuel that was supplied to them at a significant discount.
Google’s agreement with Pentagon
The agreement that was entered between the Google Inc. (NASDAQ:GOOG) founders and the government began in 2007 and continued until a couple of weeks ago when the Pentagon declined to renew what was viewed as a mutually beneficial arrangement. It’s difficult to believe that the termination of the contract will cause either executive to lose sleep or curb their jet use. Without doing the math I remain quite confident that if both spent the remainder of their lives circling the earth at full price in the largest jet they own each would remain a billionaire a few times over when their lives ended.
The agreement came to an end when it was suggested that the two may have exceeded contract terms by using fuel for non-government flights, according to a letter from a Pentagon official released by Sen. Charles Grassley a Republican Senator from Iowa.
“Are some executives getting a special deal on fuel that isn’t available to other businesses?” he asked, saying the setup raises concerns about the government’s role as a “fair broker with businesses and responsible steward of tax dollars.”
Defense Department’s budget
Does it really matter? With the ridiculous size of the Defense Department’s budget, is it worth worrying about Sen. Grassley? I guess it is if you’re simply grandstanding.
The discounted fuel was provided to the two based on an agreement with NASA whose Ames Research Center is located at Moffett Federal Airfield. The form U.S. Navy base is a mere three miles from Google Inc. (NASDAQ:GOOG)’s headquarters.
While Moffett is generally closed to non-governmental aircraft, H211, and LLC representing the Google Inc. (NASDAQ:GOOG) execs fleet of jets, agreed to pay about $1.3 million in annual rent and cost recovery, while Google separately is leasing some Moffett land for a future office campus.
“NASA is always looking for innovative, public-private partnerships to help advance our mission and provide benefit to the American taxpayer,” a spokeswoman for NASA Ames said in a statement.
So, without boring you further with the details, this mutually beneficial arrangement has reached its end because Brin flew to a wedding in Croatia with cheap fuel and the DOD and NASA are constantly bickering over budgetary concerns.