Don’t Be Cronies

Google execs flew private jets filled with government-funded fuel

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Months after the federal government came under fire for subsidizing one company’s corporate executives’ private jet travel, it gave that company a multi-million dollar contract to manage the federally owned airfield where those executives stored their private jets.

The turn of events highlighted what observers have described as a sudden reversal for tech giant Google: initially averse to the Washington, D.C., influence game, it has in recent years worked to establish a large political footprint that has provided significant benefits for the firm.

Google has been highly active during the current election cycle, raising $1.5 million, spending $1.13 million, and sitting on an additional $1.4 million war chest, Politico reported last week.

Campaign contributions are only the most visible aspect of the company’s public affairs effort. It has organized ostensibly academic events promoting its position on controversial legal issues, while a company backed by Google executives has picked up a top White House official to direct its government relations efforts.

While Google is adept at the political game, it may be a reluctant participant, experts say. Like many tech companies, its initial aversion to a prominent D.C. presence became untenable as the federal government grew more involved in regulation of the technology sector.

Some say the efforts to sway D.C. powerbrokers are less an attempt at rent-seeking than a reaction to de facto extortion by federal policymakers and regulators.

“The common view is that corporate lobbyists corrupt politics. But just as often, politics corrupt businesses,” said Tim Carney, visiting fellow at the American Enterprise Institute and a director of the group’s Culture of Corruption project.

Google’s increased presence in D.C. has offered tangible benefits to the company and its executives.

It was revealed late last year that a Google subsidiary was purchasing jet fuel from the National Aeronautics and Space Administration (NASA) for below market rates and for significantly less than non-subsidized fuel purchasers to power a small fleet of private jets owned by company executives.

The discount was intended to subsidize only travel related to official government contracting work. But subsidized jet fuel reportedly powered, among other trips, flights to and from Croatia on a private 767 for three executives to attend the wedding of Google CEO Larry Page’s brother.

Google employees were not required to pay property taxes on their jets, which were stored at the federally owned Moffett Airfield, potentially foregoing $500,000 per plane per year in tax revenue.

The federal government ended its discounted jet fuel purchases to Google late last year. However, months later it awarded Google subsidiary Planetary Ventures a large contract to manage and renovate Moffett, which is located less than three miles from the company’s headquarters.

The move immediately came under fire from critics of Google’s cozy relationship with NASA and the Department of Defense.

“This is like giving the keys to your car to the guy who has been siphoning gas from your tank,” said John Simpson, the director of Consumer Watchdog’s privacy project. “It is unfairly rewarding unethical and wrongful behavior.”

“These Google guys seem to think they can do whatever they want and get away with it—and it’s beginning to look like that is true,” Simpson added.

The company’s ties to NASA go beyond Moffett. Page and executive chairman Eric Schmidt have both financially backed a private space exploration company called Planetary Resources—which is unrelated to Planetary Ventures—that recently hired a top White House space policy official months before landing a NASA contract.

Planetary Resources hired White House director of space policy Peter Marquez in June of last year as its vice president for global engagement. He “engage[s] with key U.S. government entities on matters of strategic domestic and global interest to assist Planetary Resources in achieving its long-term mission,” according to the company.

That engagement paid off quickly: Four months after hiring Marquez, the company landed a NASA contract to build an algorithm allowing the agency to crowdsource asteroid detection.

Google touts its political work as bipartisan, saying the positions it takes are not specific to Democrats or Republicans.

“Technology issues are a big part of the current policy discussion in Washington. We think it is important to be part of that discussion and to help policymakers understand our business and the work we do to keep the Internet open and to encourage economic opportunity,” a company spokesperson said in an emailed statement.

While the company’s political contributions during the current election cycle benefit both Republicans and Democrats, its top executives have ingratiated themselves with the White House through massive donations to President Obama. Several have subsequently been appointed to influential administration positions.

Two of the company’s executives collectively bundled at least $600,000 for Obama’s reelection. Google’s PAC and employees comprised the third largest source of corporate cash for the campaign, behind only Microsoft and the University of California system.

Schmidt was an adviser and major donor to the Obama campaign and advised the Obama transition team. He now sits on the President’s Council of Advisers on Science and Technology.

Google’s footprint in Washington has grown since the tech community realized D.C. regulators could no longer be ignored, an industry insider based in Washington told the WashingtonFree Beacon. 

“People learned a lot from [Microsoft] coming to Washington,” the insider said, referring to the company’s efforts to battle a federal anti-trust probe. “They ignored Washington and got hammered, so you learn a lesson from the people who come before you.”

Carney has spotlighted the trend with respect to Microsoft and Apple.

“While companies may first come to Washington to play defense, they soon learn how to profit off big government,” he wrote in 2012.

Google turned heads in Washington as it battled its own anti-trust probe. According to emails obtained last year by the Washington Post, it surreptitiously organized ostensibly academic events around D.C. promoting its position on the investigation. Regulators involved in the probe were invited to the events.

“We see more and more as the Internet and the economy grows, as the tech industry grows overall, the more it intersects with government and regulation,” the industry insider said.

Lachlan Markay   Email | Full Bio | RSS
Lachlan Markay is a staff writer for the Washington Free Beacon. He comes to the Beacon from the Heritage Foundation, where he was the conservative think tank's first investigative reporter. He was also a contributing editor for Newsbusters.org. His work has appeared in the Wall Street Journal, the Washington Times, and the Washington Examiner. He graduated from Hamilton College in 2009, and currently lives in Washington, D.C. His Twitter handle is @lachlan. His email address is markay@freebeacon.com.