Google wins fight to keep Adwords FBI drug sting docs secret

Federal court gags Mississippi attorney general – for now

How did Google get here? And what does it want to keep quiet?

For years, the state attorneys-general allege, Google promoted the sale of unlicensed and fake drugs and other controlled substances in its search results, receiving money for doing so under its Adwords programme. While some of the unlicensed drugs were safely manufactured in the USA and re-imported from Mexico and Canada, many were not, including lethal fakes manufactured in China and Russia.

After an 18 year old died, AOL and Microsoft quickly cleaned up their respective shops – requiring age verification, for example. Google was slow to follow suit, as its Adwords product became big business.

The trade only came to a halt after a sophisticated sting operation by the Food and Drug Administration (FDA) and the FBI. Investigators set up over a dozen fake trafficking operations and applied to market them using Adwords. They gained an insight into how Google facilitated the trade, gathering around four million documents. Rhode Island, which has a long history of fighting organised crime, joined the investigation.

As the investigation neared the indictments stage, Google settled. In 2011 it signed the NPA, fending off an indictment that could have seen charges brought against Google’s management. As part of that settlement Google agreed to pay a $500m forfeiture and acknowledged the extent of its involvement. It has since committed an additional $250m to settle shareholder lawsuits over its involvement in the drugs business.

There are several things about the NPA that are unusual. It’s an agreement not to prosecute, which is subtly different from a “deferred prosecution agreement” or a “plea agreement”. Google maintains that it never settled with the states – an important thing to bear in mind as the litigation rolls on. And Rhode Island, once the most aggressive of the states' criminal prosecutors, has been silent since it emerged that $280m of the forfeiture was funnelled to the state. Much of the evidence remains under seal … in Rhode Island.

Who knew what?

A clue into why Google is fighting Mississippi so aggressively came from comments made by Peter Neronha, Rhode Island’s US attorney (a Federal appointee, not the elected state A-G). As the Wall Street Journal reported at the time:

“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” … “[T]his is not two or three rogue employees at the customer service level…," Mr. Neronha said in an interview. "This was a corporate decision to engage in this conduct."

“There’s something about that agreement that Google really, really, really doesn’t want to discuss,” notes one lawyer.

Around 1,000 pages of material from the Rhode Island archive have emerged – in a very obscure case, and in highly redacted form.

The case is DeKalb County Pension Fund v. Page as heard before the Chancery Court of Delaware (case number 7694-CS). Google was said to have submitted evidence including quotes from directors of the company.

So the battle for criminal prosecutors since 2011 has been twofold: to ascertain the level of knowledge that top of the company had about its activities, and to determine whether Google has really cleaned up its act or simply shifted the traffic to another portion of Google.

What’s not in doubt that Google has succeeded in throwing a cloak over the affair, by using diversionary tactics in which it portrays itself as a victim. A few days before Google sued Hood under the CDA, stories appeared that Hood was in Hollywood’s pocket. Using highly selective excerpts from the stolen Sony emails, Google painted Hood as a threat to “internet freedom” and the “open web”.

Yet copyright isn’t Hood’s major concern – IP issues are a footnote in Hood’s 79-page subpoena. Third party liability wasn’t the states’ concern here. And Hood’s lifetime campaign contributions from Hollywood, described by VC-backed site The Verge as “lucrative”, amounted to $2,500 from the MPA and $4,000 from Comcast and NBC. Barely enough to pay for a cocktail party.

Google argued the states that were suing Google over drug trafficking were “attempting to revive SOPA”. Google’s friends joined in. A number of groups including the EFF, the Consumer Industry Association, the Center for Democracy and Technology and Public Knowledge filed an amicus brief backing Google against Hood. All four groups have received Google funding; all four appear in the 2012 “shill list” that emerged in the Oracle Java trial.

And, in an even stranger twist, Republicans in the Mississippi legislature attempted to muzzle Hood too. Hood answers to the voters who elected him but Republicans wanted to change the law so he couldn’t pursue corporate criminal cases without their say-so, through a “Permission to Sue” bill. The bill was rejected.

The Rhode Island document trove remains invisible, for now. ®

Bootnote

For more on Google’s lobbying, see “Mission Creepy” - a report from Public Citizen’s Congress Watch project, and the Washington Post’s investigation into Google’s funding of academia, think tanks and “civil society” groups, which we summarised here.