UPDATE: We were able to confirm with a spokesperson for the U.S. Attorney in Rhode Island that no one in that office has apologized to Google for anything and that the U.S. Attorney held a well-attended press conference on Monday at which he freely answered wide-ranging questions about the allocation of Google’s $500,000,000 drugs forfeiture and the case in general, hardly an indication that he has been “muzzled.” The spokesperson was unaware of any apology to Google from anyone else in the Department of Justice regarding this case or any other case. So there we are.
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An interesting fact came out in open court recently. Before reading the rest of this post, quickly ask yourself if you are aware that Google paid a $500,000,000 forfeiture for aiding and abetting the importation of controlled substances into the United States under a nonprosecution agreement, i.e., a “no indictment letter” with the U.S. If you are like most people, you are hearing of it for the first time right now. (That fine dwarfed the $300,000,000 paid by another Creative Commons contributor for other vice crimes.)
Immediately following Google’s payment of this forfeiture, one of the largest in U.S. history, Google was sued by stockholders in different lawsuits, but for what are essentially three basic allegations.
First, Google knowingly overstated its earnings by including money from the illegal vice-related activities covered by the nonprosecution agreement.
Second, Google’s executives (and in some instances, board members) knew of the bad acts and approved of them at the highest levels, thus acting outside the scope of their authority.
And finally, that Google executives used the company’s money to pay the $500,000,000 forfeiture, not for the company’s benefit, but to save their own hides.
There’s more to it that this, but you get the idea. There are also pages of statements in the nonprosecution agreement that Google is not allowed to deny.
(When you add to the mix the fact that many of the Google insiders who may have benefited from these payments hold stock that give them 10 votes per share as opposed to the one share, one vote that everyone else gets, you can more easily understand the need to bring a lawsuit since average Jill and Joe stockholders cannot realistically use their voting power to do anything that threatens insiders.)
There are many stockholder suits relating to Google Drugs (or as we sometimes call it, “Mountain View Vice”). I believe that all but one have been consolidated in the Northern District of California. Google has a very high batting average in the Northern District for reasons I will leave to your own thoughts and research.
One of the shareholder cases is not in Google’s home town and is in Delaware, probably due to Google being incorporated in Delaware (Dekalb County Pension Fund v. Google, Inc., Civil Case 6993-VCP).
At issue in this pension fund case currently is “discovery,” meaning the court requires both sides to produce certain documents to help the other side, and also hears arguments about what has to be produced and what can be entered into evidence in the case.
So the pension fund has requested that all the documents that Google produced under subpoena to the Google Drugs grand jury in Rhode Island (where the case was being prosecuted) be produced by Google in the pension fund case. Google produced 4.2 million documents to the Rhode Island grand jury in the Google Drugs criminal case.
4.2 million documents. In an interview with the Wall Street Journal around the time that he announced the nonprosecution agreement in the Google Drugs criminal case, U.S. Attorney for Rhode Island Peter Noronha discussed the extent to which senior management at Google participated in the decisionmaking involved with Google’s profiting from illegal drug advertising (“New Heat for Google CEO“).
We were also able to find a Reuter’s story about the story that included this quotation from an interview the Mr. Neronha: “‘Larry Page knew what was going on,’ Peter Neronha, the Rhode Island U.S. Attorney who led the probe, told the Journal.” (“U.S. Believes Google’s Larry Page Knew About Pharmacy Ads“. Remember that line.
Back in Delaware–Google’s lawyers are objecting to being required to produce all of the 4.2 million records they gave to the Rhode Island grand jury because, according to Google’s lawyers, “massive amounts” of information are already in the public record, including the 15 page nonprosecution agreement and “Congressional hearings”–although there were no hearings specifically on the Google Drugs case. So shareholders got plenty of information about Mountain View Vice according to counsel to Google.
Let us be clear–if those 4.2 million documents become public record, that would probably be what they call a “sell” recommendation, and I have always thought Google was an $80 stock.
And then there was that interview by the Rhode Island U.S. Attorney that isn’t available on wsj.com at the moment, the interview that tied knowledge of the drugs problem directly to Larry Page–a pesky fact.
We obtained a copy of the official transcript of the hearing. Turning to page 12 for those reading along, Google’s lawyer told the Delaware judge that there had been plenty of disclosure of Google’s actions in the drug case, but that U.S. Attorney Peter Neronha had gone too far:
“[A]fter the nonprosecution agreement, 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. It ended up being so far off the reservation that the justice department apologized to Google for it and muzzled him.” (at p. 12, lines 9-11.)
“Muzzled him.” The venom dripping off of that word should not be lost on anyone, particularly since it was directed at a sitting judge.
This, dear readers, is the kind of treatment that the 1% of the 1% at Google get from the U.S. Government, even when they indiscriminately put children at risk, facilitate the sale of drugs to addicts, and generally capitalize on human misery.
When your vote is worth 10 times that of the 99%, the U.S. Government apologizes to you and muzzles your prosecutor.
Maybe it’s just me, but what do you think the implication of that statement was?
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