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@andreworlowski: Nothing says freedom like getting away with it: Google quietly takes gag off Mississippi AG after wrecking ads probe

July 15, 2016 Comments off

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

From Long Long Time, by Guy Forsyth

Andrew Orlowski reports in The Register:

Google has, without fanfare, dropped its legal action that muzzled an investigation into the ad giant’s conduct by the State of Mississippi.

The state’s elected attorney general, Democrat Jim Hood, has taken on Wall Street, the tobacco industry and the KKK, but even he must have been surprised by Google’s 44-page restraining order [PDF] in response to a wide-ranging 79-page subpoena [PDF] he filed against the corporation in 2014….

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The subpoena into Google’s business practices focussed on whether the company was abiding by the terms of a 2012 non-prosecution agreement it signed with the US government’s Food and Drug Administration and Rhode Island State after a multi-agency sting operation.

Google agreed to forfeit $500m as part of that deal, which raised eyebrows for several reasons – one being that $230m of the forfeiture found its way to Rhode Island.

Hood pointed out that the four-year sting operation run against Google by a combination of federal agencies before a federal grand jury in Rhode Island showed that Google and its senior management team right up to Google’s CEO Larry Page was complicit in violating the Controlled Substances Act to the point of helping the bad guys get around Google’s own filters.  Google paid a $500,000,000 forfeiture for those drug violations for advertising the sale of prescription drugs–not for what the advertisers did, but for what Google did.

Sorting through more than four million documents [that Hood was trying to get released by his subpoena], prosecutors found internal emails and documents that, they say, show Mr. Page was aware of the allegedly illicit ad sales. Under this week’s $500 million settlement, those emails won’t be released, avoiding the possibility of disclosure at trial.

“Larry Page knew what was going on,” Peter Neronha, the Rhode Island U.S. Attorney who led the probe, said in an interview. “We know it from the investigation. We simply know it from the documents we reviewed, witnesses that we interviewed, that Larry Page knew what was going on.”  [Which is why Hood wanted to get at those documents.]

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According to Google’s lawyer Boris Feldman speaking in open court on the record that the Department of Justice apologized to Google for the statement by Mr. Neronha (Transcript of hearing with Feldman statement at pp 11-12):

“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.” (emphasis mine)

The rumor is that the apology was engineered by Amazon board member Jamie Gorelick, the former Clinton Deputy Attorney General who preceded Eric Holder (later Obama’s Attorney General who was in office when the apology was tendered).

In another Googley twist, Ms. Gorelick’s former protégé (special counsel to the deputy attorney general), Beth Wilkinson, was brought in to oversee the Federal Trade Commission’s antitrust non-investigation investigation into Google for which it is now being prosecuted in Europe.  Why?  Because they just don’t have enough career prosecutors in the FTC who would let Google off the hook, I suppose.  But I digress.

Ms. Gorelick represented Google in the negotiation of the deal with Holder that let Google executives keep the drug case away from a grand jury and use $500,000,000 of the shareholders’ money to pay for their own violations of law for which Google’s board and executive team was sued by stockholders (In re Google Inc. Shareholder Derivative Litigation).

Hood also asked about a curious section of the settlement of the shareholder lawsuit:

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So Google demonstrated again that the only government that seems to be able to control them is…maybe…the European Commission.

#howgooglegateworks: Will @senmikelee Investigate Washington Insider Beth Wilkinson for Her Role in the FTC’s Noninvestigation of Google?

April 3, 2015 Comments off

The Googlegate Mascot

One of the historical facts that may (or ought to) come up in Senator Mike Lee’s corruption investigation of Google and the Federal Trade Commission is the FTC’s hiring of Washington insider Beth Wilkinson.  Ms. Wilkinson was hired to oversee the FTC’s Google investigation on April 26, 2012, four months before the internal FTC report recommending prosecution as reported by Brody Mullins at the Wall Street Journal.  Beth Wilkinson has several dots that connect her to various players in the Googlegate corruption probe.

Why Was Ms. Wilkinson Hired?  The threshold question is why did the FTC need to bring in an outside lawyer to manage the Google investigation?  Has the FTC done this before?  (Not that I can find.)  Why did they do it this time?  Why did they hire Ms. Wilkinson and who else did they consider for the post (if anyone)?  How much was she paid and for what work?  What exactly did she do while at the FTC?  Was the decision taken by the commissioners that there just weren’t enough seasoned professional staff to handle an investigation of Google?  What qualifications did Ms. Wilkinson have (who evidently doesn’t have a record of antitrust cases but does have a record of white collar crime expertise)?

Direct Line Responsibility for the Decision to Prosecute Google:  Ms. Wilkinson was a former Latham & Watkins partner who evidently was hired on the recommendation of then FTC Commissioner and Latham & Watkins partner J. Thomas Rosch  to oversee the FTC’s investigation into Google.  As the Wall Street Journal reported at the time (without a laughing baby GIF from Google’s Rachel Whetstone):

Ms. Wilkinson is expected to be intimately involved in the FTC staff’s determination on whether to bring a complaint against Google, and she would likely be a key part of any litigation effort.

FTC Commissioner J. Thomas Rosch said in an interview that Ms. Wilkinson would be a mentor to the agency’s staff and “is somebody who is going to carry out the duties of a trial lawyer.”

Mr. Rosch said the agency has reached no conclusions in the Google investigation. But he added: “Obviously we would not bring her in if she were going to be completely idle.

Mr. Rosch said he worked closely with Ms. Wilkinson in an antitrust case involving hospitals several years ago and recommended that the commission hire her.

So Ms. Wilkinson may well have been “intimately involved” in either the preparation or rejection of the FTC report recommending Google be prosecuted.  Given her role as a mentor to the agency’s staff, she would be a key witness who could help Senator Lee get to the bottom of the corruption investigation.

Close and Abiding Relationship With Jamie Gorelick, Google’s Main Washington Fixer and Major Beltway Power Player:  Jamie Gorelick represented Google in the negotiation of Google’s $500,000,000 fine for violating the Controlled Substances Act that followed a long grand jury investigation in Rhode Island.  Ms. Gorelick has also been directly involved in Google’s dealings with Mississippi Attorney General Jim Hood and presumably with the many other state attorneys general who have ongoing investigations into Google’s drug problems, false advertising, human trafficking and other existential problems at the search engine and probably YouTubeistan.

According to Wikipedia, Ms. Gorelick (known pejoratively as the “Mistress of Disaster”):

[S]erved as the Deputy Attorney General of the United States from 1994 to 1997, during the Clinton administration. She has been a partner at Wilmer Cutler Pickering Hale and Dorr since July 2003. She is a director of Amazon.com.

Gorelick served on British Petroleum‘s Advisory Council, as their top legal counsel after the 2010 Deepwater Horizon oil spill.  She was appointed by former Senate Democratic Leader Tom Daschle to serve as a commissioner on the bipartisan National Commission on Terrorist Attacks Upon the United States, which sought to investigate the circumstances leading up to the terrorist attacks of September 11, 2001 and also served as Vice Chairman of Fannie Mae. Results of an internal audit showing improper accounting within Fannie Mae is given as the reason for her resignation. While at the US Department of Justice she authored a memo [known as “Gorelick’s Wall” or the “Wall Memo”] that clarified Reagan era rules for communications on terrorism within the FBI. [Many, many c]ritics cite this action as one reason for lack of sharing intelligence prior to the September 11 attacks.  [So naturally she’d have an interest in being on the 911 Commission that wrote the history about the incident.]

The “Wall Memo” is a very big deal to people like Senator John Cornyn, he to whom Eric Schmidt refused to answer questions in a hearing of the Senate Antitrust Subcommittee that Senator Lee now chairs.

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After working as an Assistant U.S. Attorney,  Ms. Wilkinson was hired by Ms. Gorelick as special counsel to Gorelick when Gorelick was Deputy Attorney General.  (Ms. Gorelick was replaced as Deputy Attorney General by Eric Holder, the current Attorney General of the United States.)  Ms. Gorelick promoted Ms. Wilkinson to be the principal deputy in the Terrorist and Violent Crime section.  Ms. Wilkinson left the Justice Department after successfully prosecuting Timothy McVeigh and Terry Nichols and became a co-chair of the Constitution Project–another connection to Ms. Gorelick.  The Constitution Project is also funded by Google according to Public Citizen.

What happens next is a bit odd.  Beth Wilkinson was hired by Fannie Mae.  As Professor Volokh notes:

Jamie Gorelick was one of the Fannie executives who benefited from inflated bonuses based on Enron-style accounting. She was Vice Chairman of Fannie Mae from 1997 to 2003 (Fannie’s fraudulent accounting scheme was made public in 2004).

According to Ms. Gorelick’s critics:

In 2004, after a tip from a whistle blower who was later fired, the Office of Federal Housing Enterprise Oversight (Ofheo) issued a report finding that the government-sponsored entity Fannie Mae had engaged in Enron-like accounting machinations that allowed Fannie to overstate its earnings and underestimate the risk the company faced. The accounting wizardry Fannie engaged in was designed so that Fannie could meet profit targets to maximize bonus payments to company executives like Clinton administration deputy attorney general Jamie Gorelick and Carter administration assistant director for domestic policy Franklin Raines.

Well guess who just happened to join Fannie Mae in 2006?

In 2006, Fannie Mae recruited [Beth] Wilkinson as parts of its effort to rebuild its relationship with regulators after accounting scandals and complaints about its corporate culture. Her compensation at Fannie Mae was not disclosed when she was hired.  She served as Fannie Mae‘s executive vice president, general counsel and corporate secretary from February 2006 until September 2008.

“Her compensation at Fannie Mae was not disclosed when she was hired” is another way for Wikipedians to avoid inconvenient facts.  Her compensation is in Fannie Mae’s annual reports if anyone wants to look.  Wilkinson was paid over $5 million in eyepopping compensation in 2006 plus an $800,000 “sign on bonus” even though “she knew little about mortgage-backed securities.”  Pretty good for government work, eh?

She resigned her position at Fannie Mae along with three other senior executives on September 19, 2008, after the troubled mortgage giant was taken over by the government.

It appears that a lawyer who had no experience with what Fannie Mae did as its core function was paid millions in a short stopover before the taxpayer picked up the tab.  Again, following her mentor Jamie Gorelick to high office.  During an investigation of practices in effect while Ms. Gorelick was in a leadership role at Fannie Mae–that lead to the housing crisis as well as big bonuses for Ms. Wilkinson.  Great qualifications to investigate Google, right?

Big Tobacco Cases–Interestingly, Beth Wilkinson also found the time to represent Big Tobacco in 2006…you know, the same Big Tobacco that lost a multibillion dollar class action case to the then-attorney general of Mississippi Mike Moore currently advising Mississippi Attorney General Jim Hood in prosecuting Google.

So why haven’t we heard more about Ms. Wilkinson from the Washington press corps?  Could it be because she is married to NBC’s David Gregory?  Nahhhh.

It looks like Senator Lee would have a very legitimate interest in calling Ms. Wilkinson as a witness in his corruption investigation into the FTC’s ties to Google.  I’m willing to be educated otherwise, but it looks from the outside that the key lawyer in the FTC with direct responsibility for the Google case might well be deferential to Jamie Gorelick, the indispensable outside lawyer for the very company that Ms. Wilkinson evidently took an oath to investigate.  Not only might Ms. Wilkinson might be deferential to Ms. Gorelick, she might well feel downright indebted to Ms. Gorelick for not only her personal wealth from working at Fannie Mae (an odd coincidence) but also significant help with her career advancement while at DOJ and after.

And since Jamie Gorelick was replaced by Eric Holder as Deputy Attorney General during the Clinton Administration and since Mr. Holder was the sitting Attorney General of the United States throughout the Google investigation, these people all clearly knew each other and for a long time.

There’s an awful lot of smoke for there to be no fire at all.  And that’s just the corruption case for Google.

It sure looks like somebody somewhere was pulling some strings in the background.  Ms. Gorelick is clearly a champion string puller.  You may believe in coincidence, but I don’t.

But what I do know–if Senator Lee doesn’t investigate the reliable Ms. Wilkinson, no one else will.

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