Google Helped Honor FTC Chairman During Agency Inquiry
Google Inc. (GOOG) contributed $25,000 to honor the chairman of the Federal Trade Commission while the company was under investigation by the agency for antitrust violations, Senate records show.
Google donated the money to Common Sense Media Inc., a San Francisco-based advocacy group that gave FTC Chairman Jon Leibowitz an award for his work in developing policies to help children, according to a January disclosure report. Google was listed as one of the sponsors of the awards ceremony along with several other companies, including Comcast Corp., AOL Inc. and a charitable arm of Goldman Sachs Group Inc.
At the time, the FTC was investigating whether Mountain View, California-based Google unfairly disadvantaged competing websites by favoring its own services in search results. The agency ended the 20-month probe Jan. 3 with no enforcement action. Google agreed to voluntary changes in some search practices and signed a consent decree regarding the use of certain patents.
“It’s a little bit odd that they’re donating to Common Sense Media at the exact same time they’re trying to influence Jon Leibowitz,” said Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, a watchdog group. “It really looks terrible.”
Google has “supported these organizations’ work for at least the past five years, long before any investigation, alongside many other companies” including AOL, Comcast, AT&T Inc., Microsoft Corp., and Verizon Communications Inc., said Niki Fenwick, a company spokeswoman.
Peter Kaplan, an FTC spokesman, said Leibowitz didn’t know that Google was among the corporate contributors to the event. “But he is grateful and honored to accept the award from Common Sense Media, which does so much for kids and families and privacy,” Kaplan said in a statement.
Leibowitz, the FTC chairman since 2009, announced on Feb. 1 that he would leave the commission. The White House announced today that current commissioner Edith Ramirez will succeed him as chairman.
Google was the only corporate sponsor of Common Sense Media’s April 25, 2012, awards ceremony that reported its contribution under a 2007 law requiring registered lobbyists and those companies and trade associations that hire advocates to disclose to Congress their political giving. Google also sponsored the event in 2010 and 2011, according to the advocacy group’s website, without reporting those donations.
Marisa Connolly, a spokeswoman for Common Sense Media, declined to comment on the donations.
“It’s probably better to avoid this type of thing -- the appearance raises a question or two” for both the FTC and Google, said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. At the same time, “in this close, connected world, things like this will appear,” he said.
Kenneth Gross, a campaign-finance lawyer with Skadden, Arps, Slate, Meagher & Flom LLP, said the law requires disclosure when companies play major roles in setting up events. They aren’t required to report modest donations, such as reserving a table.
Even so, some companies do report donations when they aren’t required to, he said. “I’ve seen a lot companies err on the side of disclosure,” Gross said.
Besides Leibowitz, five others, including entertainers Nick Cannon and Bridgit Mendler, were honored at the event for their work in helping children navigate media and technology. Previous winners of the award include former President Bill Clinton and filmmaker George Lucas.
In the Google antitrust probe, Leibowitz concluded that, while some evidence suggested the company was trying to eliminate competition, its “primary reason” for changing the look of search results was to improve user experience. The FTC voted 5-0 to close the investigation.
Google agreed to let websites remove their content from targeted search services such as Google Shopping or Google Local without removing or demoting that content in the main Google search engine. In the consent decree, the company also agreed to limits on when it can seek to block sales of competitors’ products that rely on so-called standard-essential patents.
This is at least the second time Google helped recognize top regulators in the middle of a government probe.
In October 2011, Google reported spending $80,000 to honor Federal Communications Commission Chairman Julius Genachowski and Commissioner Michael Copps, Senate records show.
The FCC announced an investigation of Google’s Street View product in November 2010. It ended the probe in April 2012 after fining Google $25,000 for failing to cooperate with investigators, which drew this admonition from Senate Majority Whip Richard Durbin, an Illinois Democrat, the following month: “How are you protecting our privacy with a $25,000 fine?”
As Google has come under scrutiny, it has boosted its lobbying spending and its political action committee donations to federal candidates.
Google spent $18.2 million on lobbying last year, including $1.7 million by its Motorola Mobility subsidiary acquired in May, according to the Center for Responsive Politics, a research organization. That was almost double the $9.7 million it spent on Washington advocacy in 2011.
The increased spending boosted the company into the top 10 lobbying organizations, according to the Washington-based center, which tracks expenditures.
Its PAC gave $885,500 to candidates for 2012 federal elections, more than double the $343,000 in donations made for the 2010 races, according to center data.
In addition, those working for Google and their families gave $805,120 to President Barack Obama’s re-election campaign, second only to those at Microsoft Corp. (MSFT) among corporate employees, the center’s data show.
“When you start having problems, you start lobbying, you start making political donations and you start financing the favored charities of those you wish to influence,” Sloan said.
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