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Consumer Watchdog Asks White House Counsel to Rule that Administration Must Distance Itself from Google During Probes

WASHINGTON, June 24, 2011 /PRNewswire-USNewswire/ -- Consumer Watchdog has asked the White House Counsel to rule that President Obama and other members of the Administration must distance themselves from Google while the company is the target of serious federal investigations, including a criminal probe into allegations the search giant profited from selling online ads to illegal pharmacies.

In a letter released today to White House Counsel Kathryn Ruemmler, who is responsible for overseeing White House ethics policy, Jamie Court, Consumer Watchdog president and John M. Simpson, director of the nonprofit, nonpartisan group's Privacy Project, noted that Eric Schmidt, Google's executive chairman, and Marissa Mayer, a Google vice president, were both guests at the recent State Dinner honoring German Chancellor Angela Merkel.

"It has long been a tradition to invite some business leaders to attend these White House functions. However, executives of companies under federal criminal investigation should not be invited while a major case is pending," they wrote. "Allowing such executives to hobnob at a gala White House event inevitably sends a message that the Administration supports them and undercuts the ability of federal investigators to proceed with their case in a fair and unbiased way."

Read Consumer Watchdog's letter here:

Google is under criminal investigation into allegations that it profited from selling online ads to illegal pharmacies. These illicit pharmacies may violate U.S. law by peddling expired or counterfeit prescription medication, or selling medicine without a physician's prescription. Before the State Dinner Google had begun negotiating a settlement of the charges and had filed notice with the Securities and Exchange Commission that it was setting aside $500 million – roughly one-sixth of its 2011 first-quarter revenue – to resolve the case.

"Clearly, entertaining Google executives at the White House while a case of this magnitude is pending poses an inappropriate conflict of interest," the letter said. "In addition to the drug ads case, Google is understood to be the target of an antitrust investigation by the Federal Trade Commission. While the Commission is an independent agency, prudence suggests that the White House ought not entertain executives of a company that is the target of a major FTC probe."

The letter also raised concerns about Attorney General Eric Holder's appearance at a White House conference with Google and other companies pushing an effort to protect intellectual property rights that was, among other things, targeting fake drug sales. No mention was made of the fact that Google was under investigation for its role in selling ads for the counterfeit drugs. It is not clear whether Holder was aware at that time of the probe by the U.S. Attorney in Rhode Island into allegations that the search giant profited from selling online ads to illegal pharmacies. If he was aware of the investigation, yet appeared at the forum with Google, that certainly would be problematic, Consumer Watchdog said.

"It is clear that hardworking dedicated federal employees are pursing significant investigations into Google's activities. Unfortunately when top Administration officials entertain Google executives, it undercuts those investigations by sending the implicit message that the Administration supports Google," the letter said.

"We ask you to render a formal opinion that the President and other top Administration officials must step back and assume a neutral position so the various investigations into Google's activities can be concluded in a fair and professional manner," the letter concluded.

SOURCE Consumer Watchdog
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