What are they afraid of: Will Schmidt Take the 5th Again in @agjimhood’s Mississippi Investigation?

During Eric Schmidt’s Senate antitrust subcommittee hearing in 2011, a strange thing happened–Eric Schmidt refused to answer under oath on the advice of counsel when Senator John Cornyn–formerly of the Texas Supreme Court–asked questions about Google’s then-recent non-prosecution agreement with the U.S. Department of Justice.  While he didn’t give the usual catechism of “taking the 5th” around the answer, he definitely refused to answer on the advice of counsel.  And when you’re testifying before the U.S. Senate, invoking your right to refuse to answer on the advice of counsel pretty much has one meaning.

So it’s not surprising that Google is now trying to block Mississippi Attorney General Jim Hood’s investigation into the self same “plea bargain” that Google struck with the Criminal Division of the U.S. Department of Justice for which Google paid $500,000,000 of the stockholders money and for which Google is currently being sued by its stockholders.

There’s something about that agreement that Google really, really, really doesn’t want to discuss.

Did Schmidt Take the 5th?

You can feel pretty confident that it would not be Googley for Eric Schmidt to actually recite the magic words of invoking his right to protection from self-incrimination under the 5th Amendment of the U.S. Constitution.  And you can also feel pretty confident that Google would have tried and failed to reach an agreement with subcommittee staff to keep out any questions about the $500 million criminal penalties for promoting the sale of illegal drugs that happened while Schmidt was in charge.

It’s also hard to believe that Google lawyers had not prepared Schmidt for the question about his priors–and bear in mind that this was the one area of questioning all day that could have had some immediate criminal law downside for Schmidt and Larry Page, so it is the one line of questioning that probably spooked him.

And having bought his way out of the drugs problem once, he damn sure wasn’t going to be able to do it again with John Cornyn.

This erudite reporting from the Huffington Post sums it up:

SCHMIDT SAYS HE KNEW ABOUT GOOGLE STEERING FOLKS TO ILLEGAL CANADIAN DRUG SITES – News was actually made at [the] hearing. Ten gallon hat tip to Big John Cornyn, who asked Eric Schmidt about the $500 million settlement Google reached with the Justice Department over illegally advertising Canadian prescription drugs to Americans…. ‘Was it the result of oversight or inadvertence or were there some employees in the company that were doing this without your knowledge or…’ asked Cornyn (R-Texas). ‘Certainly not without my knowledge. Again, I have been advised — unfortunately, I’m not allowed to go into any of the details and I apologize, Senator, except to say that we’re very regretful and it was clearly a mistake’ [Schmidt said].”

Yep, advertising dope to kids means only having to say you’re sorry.

This quotation actually came late in Schmidt’s exchange with Senator Cornyn, but includes the money line “Certainly not without my knowledge.”  So did Schmidt the Princeton Man mean what he said complete with double negative–that any actions by employes of the company were certainly taken with his knowledge?  Or did he mean to say such actions certainly were not taken with his knowledge (given that the fine resulted from seven different sting operations, it seems like that would be a lie of the best kind, a provable lie).

In any event, Schmidt began his answers by saying he had very clear advice of counsel (coaching?) that Google’s nonprosecution agreement with the Department of Justice prohibited Schmidt from discussing the case so Cornyn would have to go to the Department of Justice for his answer.  This produced an audible gasp from the audience and whispering of “that’s not true” floated up through the committee room.

Senator Cornyn asked Schmidt where that prohibition was found, was it in the nonprosecution agreement.  Schmidt said yes.  Cornyn then asked Schmidt if rather than not being able to discuss the agreement,  wasn’t it the case that Google could not deny any of Google’s many admissions of bad behavior in the plea agreement–as Cornyn was told by his counsel.  And you can read it yourself.

Which, of course, is spot on–that’s exactly what Google agreed in the non-prosecution agreement.  Not only was there no confidentiality requirement, the $500 million forfeiture and nonprosecution agreement was actually announced to the public at a press conference held on August 25, 2011 by the U.S. Attorney for Rhode Island, the FDA, IRS and FBI and made available on the government’s websitenot confidential at all.

Schmidt said that he would confer with counsel–the only time he did so, I believe–and then said that he’d been advised not to answer any questions about the nonprosecution agreement.  (The conference with Google’s David Drummond took place in front of the CSPAN cameras–maybe that’s why YouTube is all over the Congress now.)

schmidt senate

What Senator Cornyn didn’t say about the nonprosecution agreement was what happens if Google did deny any of the admissions by Google set forth in the agreement.  What happens?  The agreement is then revoked, the government keeps the $500 million and they are then free to indict Google and Google executives–such as Eric Schmidt and Larry Page.

Do you really think that he hadn’t been coached about how to handle the questions?  And that the brain trust came up with the idea to just try to misdirect Cornyn by telling him the agreement was subject to a confidentiality clause like almost everything else in the world having to do with Google?  Surely not–that would be obstruction of…nah, they’d never be that stupid.  They probably just thought Cornyn was another dumb Southern boy.

But imagine what would have happened if Senator Cornyn had not done his homework?  What would have happened if he didn’t know that nonprosecution agreement backwards and forwards?  The world would think that Google could not be questioned about the agreement.  Not because Google chose not to talk about it because it was a horrendous crime, but because well, shucks, you’ll have to talk to DOJ about that we are prohibited from talking about it.

So was Schmidt coached to give that answer to deflect attention?  So he wouldn’t be seen on CSPAN taking the 5th?

Let’s score that exchange Trinity 1, Princeton 0.

Yes, it was all so confused that Schmidt had to file supplemental “answers” for the record to clarify why a Princeton Man was so confused about the contents of a document that kept him from being indicted and for which he paid $500,000,000 of the stockholders money.

But you have to ask yourself what is so sensitive in the four million pages of documents that Google had to produce to that Rhode Island grand jury investigation in the drugs case that Google doesn’t want any of it to come out.  The four million pages of documents that are just waiting patiently to be reviewed by a coalition of state attorneys general.

Probably the same reason they’re trying to block Jim Hood in Mississippi.

Watch the hearing on CSPAN.