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Questions for Mr. Holder on Google Drugs

January 21, 2014

Americans are freedom loving people, and nothing says freedom like getting away with it.

From “Long, Long Time” by Guy Forsyth.

MTP readers will recall the infamous Google Drugs settlement.  Google was the subject of several sting operations over a multiyear period conducted by a variety of Federal criminal investigators as well as a federal grand jury in Rhode Island.  This was no small thing–Google produced over 4,000,000 documents in the grand jury proceeding.

There are a few other reasons why it is no small thing.  Google signed a nonprosecution agreement with the federal government that was remarkably favorable to Google, but still cost the company $500,000,000.   And they got off very cheap if you ask me.  It takes Google 4 days or so to make $500,000,000, so while that may sound like a lot of money, it really isn’t.

This was in 2011–knowing what we now know about Google’s connections to the Administration, untold data mining during the 2012 election, and cozy relationships with the National Security Agency and FBI, are you surprised that Google got off lightly on something as serious as violations of the Controlled Substances Act?

It’s also not surprising that when Google Chairman Eric Schmidt testified at a hearing of the US Senate Antitrust Subcommittee, he invoked his right to refuse to answer on the advice of counsel–some might call that invoking his right against criminal self-incrimination–under questioning from Senator John Cornyn.  I was there, I can tell you that Senator Cornyn was rightfully not happy and Schmidt clearly looked and sounded like someone who had something to hide as he deflected Senator Cornyn’s question with what he had to know was a lie before Schmidt lawyered up.  (The next time this happens–and there will be a next time–it might be worth asking Schmidt to clarify that he’s “taking the 5th”.)

Google is also being sued by many of its stockholders as a result of the Google Drugs prosecution, essentially for defrauding investors by failing to disclose this $500,000,000 forfeiture in a timely way, and using the company’s money to pay what is essentially a fine for the personal bad behavior of the senior management team.  And this leads to the question for Mr. Holder.

Attorney General Holder is frequently called to testify on Capitol Hill these days and he may be able to clear up a question raised in the Wall Street Journal based on a statement made by Google’s lawyer Boris Feldman in open court (“Did DOJ Apologize to Google for US Attorney’s Comments?”):

“The U.S. attorney in Rhode Island went off the reservation and gave a long interview about all the evidence and why it was he was so excited about the case,” lawyer Boris Feldman told the judge at a Delaware state court. “It ended up being so far off the reservation that the Justice Department apologized to Google for it and muzzled him.”

Given what we now know about Google’s cozy relationship with law enforcement agencies, it is entirely believable that the Justice Department would have apologized to Google for one of the US Attorneys having the brass to actually prosecute Google for anything that ended up in any kind of meaningful punishment for Google.  However, the Wall Street Journal reports that the Justice Department (i.e., “main Justice” in Washington) denied apologizing:

Maybe the Justice Department apologized on his behalf? “We did not apologize,” a department spokeswoman said.

And the reaction from Rhode Island (which kept about half of the $500,000,000 to offset law enforcement costs in the state)?

“The U.S. attorney has never issued apologies to anyone in this matter,” a spokesman said. “As far as the suggestion that the U.S. attorney has been ‘muzzled,’ I can only point to the fact that we recently held a widely attended press conference” at which he answered media questions about the case.

Of course, Google likes to enjoy all the benefits of having access to the US public financial markets while accepting only the burdens it is forced to bear:

For its part, Google declined to comment, saying: “Google does not comment on its discussions with regulators.”

“Regulators”?  Do you call the cops “regulators”?  Maybe in Young Guns, but not since the 19th Century.

The Question for the Attorney General

I think it is insulting that Google did not back up its lawyer–Boris Feldman has a sterling reputation and is one of the top litigators in the world.  That is–by the way–why he was appearing for Google in the stockholder lawsuit.  The idea that Mr. Feldman somehow misspoke on such a fundamental point or is not worthy of being backed up by his client is laughable.

It also appears that Mr. Holder presided over a December 14, 2010 meeting at the White House requested by Google during the DOJ’s drug investigation into Google’s bad acts.  What, if anything, did this meeting have to do with the prosecution of Google?  Did the Attorney General find it appropriate to make this statement while at the same time prosecuting Google, a participant in the very White House meeting at which he was speaking?

[W]e successfully prosecuted a defendant who was selling fake cancer medications to patients in the United States, Canada, the United Kingdom, Belgium, and the Netherlands. The drugs – which he marketed as a rare, experimental treatment – were manufactured in Canada, but advertised and sold globally over the Internet. With assistance from Canadian and German authorities, this individual was apprehended and extradited to the United States. He is now behind bars and has been sentenced to almost three years in prison.

Given that at the time of the White House meeting (December 14, 2010), Google executives were no doubt close to being criminally prosecuted themselves, don’t you think that news of Google’s prosecution would have been relevant and surprising to participants in the White House meeting?  Particularly since the Attorney General of the United States was giving a speech about the very crimes of which Google (a major political supporter of the Obama Administration) was accused at a meeting held under the auspices of the President of the United States concerning the very subject of that prosecution?  When the Google plea bargain was announced a few months after the December White House meeting (reported in the Wall Street Journal on May 13, 2011), would it not have been reasonable for the public to be at least a little surprised if not shocked by the Attorney General’s comments or lack thereof?

As CNET reported on May 19, 2011 (six months after the White House meeting at which General Holder spoke):

No one may have been more surprised than Victoria A. Espinel, the U.S. intellectual-property enforcement coordinator. Just six months earlier, Espinel, who’s leading the Obama administration’s efforts to thwart rogue pharmacies, commended Google’s help in the battle at [the December 14] White House meeting.

The December White House meeting was also the occasion to announce the formation of the Center for Safe Internet Pharmacies.  Again, according to CNET:

There are plenty of others surprised by the news. At that same December meeting at the White House, Google was joined by Microsoft, Yahoo, Go Daddy, and a few other companies in announcing the creation of a nonprofit organization called the Center for Safe Internet Pharmacies. The purpose of the group is to share information about illegitimate online pharmacies in order to root them out and shut them down.

“It was a surprise to me because I didn’t know the investigation was going on and because a half a billion dollars is a big number, even for Google,” said Christine Jones, general counsel, executive vice president, and corporate secretary at Go Daddy, the giant domain registration and Web hosting company that spearheaded the Center for Safe Internet Pharmacies effort.

The formation of the Center for Safe Internet Pharmacies is one of Google’s customary defenses to why the company isn’t simply running a RICO-predicate criminal enterprise.  As recently as April 19, 2013, John Burchett, one of the legion of revolving door types in Google’s Washington DC in-house lobby shop, cited Google’s participation in the Center for Safe Internet Pharmacies in response to Mississippi Attorney General Jim Hood’s inquiry into Google’s compliance with the DOJ plea deal.  (See page 13, AG Hood Exhibits.  Burchett joined Google in 2007 (“Google: As Cool as it Seems and More“) just before Eric Schmidt received a prophetic letter from Joseph A. Califano, Jr. warning that Google was inducing the sale of drugs to kids.  Burchett is a board member of Andean Health and Development and is the former Chief of Staff for Michigan Governor Jennifer Granholm.  Governor Granhom was an Obama campaign debate surrogate you will recall from many, many appearances on Sunday shows during the 2012 presidential campaign.  Before joining the staff of Harvard Law School classmate Granholm, Burchett “worked as a business consultant to governments across the country” including Detroit’s Little Caesar’s.)

Getting into the Center for Safe Internet Pharmacies industry group apparently was–and continues to be–a very important strategic move for Google.  (Or what good Catholics will recognize as an “indulgence” for their sins.)

It also must have been important to Google that their motives for joining the group be concealed and not tainted by the fact that Google–at the very time they were being deceptively portrayed in the People’s House as one of the good guys–was either being criminally prosecuted by the US Government at the time, or was then currently negotiating a way to pay a $500,000,000 fine with the stockholders’ money and be handed a get out of jail free card by the US Government.

Imagine if instead of having this political plum handed to them on a silver platter inside the People’s House (albeit in the dark and without the knowledge of all–well, nearly all–the participants in the White House meeting) the press instead was all about why Google was allowed to join the group without at least disclosing its own felony prosecution for the very crimes at issue in the meeting.

Not very Googlely.

And they got away with it.

Very Googlely.

And according to Mr. Burchett, they are still getting away with it.

Extremely Googlely.

But there is an easy way to get to the bottom of these issues:  For a Congressional committee to ask the Attorney General under oath whether or not the Department of Justice apologized to Google.

What role did the Department of Justice play in arriving at the subject of the December 14 White House meeting? Why didn’t the Department of Justice demand the meeting be held after the announcement of Google’s plea deal?  (Would the DOJ have extended the same courtesy to Enron?  British Petroleum?  Fannie Mae?)

Another question for the Attorney General might be what has the Department of Justice done to determine whether Google has complied with the terms of the nonprosecution agreement.  Mississippi Attorney General Jim Hood has recently raised some questions about Google’s compliance with the nonprosecution agreement, and it seems that it would be an appropriate role for the Department of Justice to look into the matter.  The DOJ did, after all, collect over $200,000,000 from Google, so it’s not like they can’t cover the costs of oversight of their own agreement.

Oversight begins at home.

–Updated July 4, 2013.

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