When the Texas attorney general opened an investigation into Google’s alleged anticompetitive practices in 2010, the Web behemoth turned to an unlikely ally for help: tea party hero Ted Cruz.
Back then, Cruz wasn’t the Republican senator from Texas and likely presidential candidate that he is today. He was a lawyer in private practice, having stepped down as solicitor general for the Lone Star State in 2008. During the five years he had previously spent in the attorney general’s office, however, he made important friends. He established a close relationship with Greg Abbott, the then attorney general who has since ascended to the Texas governor’s mansion. “I was his mentor,” Abbott said of Cruz in a 2014 interview.
Facing the threat of an antitrust lawsuit from the state attorney general, Google hired Cruz to represent its interests before the agency where Cruz himself had worked just over two years earlier and where his mentor, Abbott, still called the shots. The future political star met with a top Abbott deputy on Google’s behalf in August 2010, and Cruz then accompanied a team of antitrust lawyers from Google and a Palo Alto, Calif.-based law firm to three additional meetings at the agency, according to a Cruz spokesman and visitors’ logs for the Texas attorney general’s office.
Texas’ investigation into Google was subsequently closed without action, according to Cynthia Meyer, a spokeswoman for the office of current state Attorney General Ken Paxton.
Rick Tyler, a Cruz spokesman, said there was nothing inappropriate about Cruz bringing this business before his old colleagues. Tyler insisted that while Cruz was a member of Google’s litigation team during the investigation, he did not lobby his ex-employer to quash the probe. “Cruz was acting in his private practice, as being retained by Google for his expertise in antitrust law,” Tyler said. “It’s completely appropriate that he was engaged to do that.”
But Texas government watchdog groups view things differently.
“What we’re seeing is a guy who’s selling his influence, selling his access,” said Craig McDonald, the director of the liberal nonprofit organization Texans for Public Justice.
It’s “the worst of crony politics,” said Tom “Smitty” Smith, director of the Texas office of Public Citizen, another watchdog group.
Since arriving in Washington, Cruz has criticized the revolving-door cash machine of the American political system. “We need to end the corruption. We need to end corporate welfare and crony capitalism,” he told the audience at the 2014 Conservative Political Action Conference. “If you come to Washington and serve in Congress, there should be a lifetime ban on lobbying.”
But Cruz’s involvement in the antitrust investigation into Google, which has not previously been reported, sheds new light on the potential White House hopeful and highlights the often blurry distinctions between lawyers and lobbyists.
It all began in July 2010, when the Texas attorney general’s office sent Google a “civil investigative demand” in which it asked the company to turn over documents and respond to written questions. Attorney General Abbott had opened the investigation to determine if Google had violated state and federal antitrust laws by using its monopoly power as a general — or “horizontal” — search engine to unfairly squelch competition from rival search sites that specialize in specific areas such as travel, shopping and local business, according to court documents. Specialized search engines are known as “vertical” sites.
“The conduct under investigation includes alleged preferential placement of Google vertical search services, demotion of rivals in Google’s search results rankings, and the unauthorized use of user reviews, star ratings, and other content that Google scrapes from competing vertical search sites,” Abbott said in court documents in June 2012, when he filed allegations that Google refused to turn over materials related to the probe. “If Google is maintaining its monopoly in horizontal search through exclusionary conduct directed at vertical competitors, or monopolizing the search advertising market through exclusive contracts, the Attorney General’s Office may bring an enforcement action against Google for monopolization.”
Google’s deputy general counsel, Don Harrison, acknowledged the investigation in a blog post on Sept. 3, 2010. He named three companies that the Texas attorney general had asked Google for information about: Foundem, a shopping-comparison site based in the United Kingdom; TradeComet, which runs the business-to-business search engine SourceTool; and myTriggers, a shopping-comparison search website. “Given that not every website can be at the top of [Google search] results, or even appear on the first page of our results, it’s unsurprising that some less relevant, lower quality websites will be unhappy with their ranking,” Harrison wrote. He added that Google looked “forward to working cooperatively with the Texas Attorney General’s office.”
Google spokeswoman Niki Christoff declined to comment for this story.
Google retained Cruz after learning of the Texas investigation. At the time, Cruz was a partner at the Houston office of the Philadelphia-based law firm Morgan, Lewis & Bockius, where he specialized in U.S. Supreme Court and appellate litigation. According to Cruz spokesman Tyler, the Web giant hired Cruz for the Texas investigation on the recommendation of a Google lawyer who was familiar with Cruz’s work at the Federal Trade Commission. Cruz had been the director of the FTC’s Office of Policy Planning from July 2001 to January 2003. During this time, he had chaired its Internet task force and, according to Tyler, gained “expertise in antitrust litigation and specifically to Internet-related business.”
There’s no doubt that Cruz is an exceptional lawyer. He clerked for the late U.S. Supreme Court Chief Justice William Rehnquist, and Harvard Law School professor emeritus Alan Dershowitz called him “among the smartest students I’ve ever had.” But according to McDonald of Texans for Public Justice, when it came to the Texas AG’s office, Cruz had more to offer Google than legal expertise alone. “He was buddies with the attorney general and was well-known to the staff,” McDonald said. “He’s a brilliant lawyer, but there are a lot of brilliant lawyers who didn’t get the contract to represent Google before the [Texas] attorney general.”
Google has extremely close ties to the Obama administration. It was the third most generous contributor to the president’s 2012 re-election campaign, and Google Executive Chairman Eric Schmidt even helped the campaign find the right employees and select the best technology to use, according to Bloomberg Businessweek. Google’s PAC spent about $1.6 million in the 2014 election cycle; the spending on federal candidates was evenly split, with 50 percent going to Republicans and 50 percent going to Democrats.
Cruz served under Abbott as the solicitor general of Texas from 2003 to 2008. A 2014 article by the Associated Press highlighted their cozy relationship. Cruz called Abbott his “close friend and mentor”; Abbott also identified himself as Cruz’s “mentor”; the Associated Press described the two as “colleagues and buddies in Austin.” After Cruz announced his plans to resign as solicitor general, Abbott released a statement: “On behalf of all Texans, I thank Ted Cruz for his service to the State of Texas and wish him well as he continues his extraordinary legal career.”
Eleven days after Abbott issued his first civil investigative demand, Cruz returned to the attorney general’s office. Only this time he wasn’t representing the people of the Lone Star State — he was representing Google. On Aug. 9, 2010, according to a Cruz spokesman and visitors’ logs for the Texas attorney general’s office, Cruz met with David Schenck, whom Abbott had recently appointed as deputy attorney general for legal counsel. Cruz was able to get in to see the new deputy attorney general before Schenck had even started his job. Schenck was appointed on Aug. 2 but didn't officially join the agency until Sept. 1, according to a 2010 press release from the attorney general’s office.
On Aug. 24, Cruz returned to the Texas attorney general’s office with a team of Google lawyers, including Google antitrust attorneys Dana Wagner and Matthew Bye, and antitrust lawyers Susan Creighton and Renata Hesse of the Palo Alto, Calif.-based law firm Wilson Sonsini Goodrich & Rosati, according to a Cruz spokesman and the visitors’ logs. This meeting, according to the visitors’ logs, lasted roughly 10 hours.
(Through a representative at the Department of Justice, where she is now a deputy assistant attorney general in the antitrust division, Hesse declined to comment for this article. Google declined to make Bye available for comment. Creighton did not respond to requests for comment. Attempts to contact Wagner were unsuccessful.)
Cruz returned to the attorney general’s office with Hesse on Nov. 22, 2010, according to a Cruz spokesman and the visitors’ logs. And on March 23, 2011, he attended his last meeting about the matter at the attorney general’s office with Wagner, Bye, Hesse and Creighton. By then, Cruz was a candidate for the U.S. Senate. And six days after his final meeting, Wagner gave $250 to his campaign, according to Federal Election Commission records.
The Texas attorney general never brought an enforcement action against Google. The agency closed the investigation without action, according to Meyer, spokeswoman for current Texas AG Paxton’s office. (Meyer won’t specify when the investigation was closed, but it was still active in June 2012, when Abbott petitioned the court to force Google to turn over additional documents related to the probe.)
It’s not clear why the attorney general closed the investigation, what took place during these meetings or even which members of the AG’s office attended them. We don’t know, for example, if Abbott was present at any of the meetings or if he ever discussed the Google situation with Cruz. Cruz’s spokesman declined to discuss these issues, and Google won’t comment at all. Meyer referred these inquiries to the previous attorney general, Abbott. But Amelia Chasse, a spokeswoman for now-Gov. Abbott, did not respond to repeated requests for comment.
Cruz didn’t register as a lobbyist during his work for Google. Tyler, Cruz’s spokesman, insisted that although Cruz did legal work for Google during the attorney general’s investigation, he never lobbied his former employer. Tyler pointed to Texas Ethics Commission regulations that exclude attorneys from having to register as lobbyists when providing legal — as opposed to influence-peddling — services to a client. “He was a member of a litigation team representing Google in an ongoing antitrust investigation by the AG’s office,” Tyler said, “and that very activity is not considered lobbying.”
But Smith of Public Citizen Texas says the legal distinction between lobbying and lawyering is beside the point. “It’s the classic line ‘Just because it’s legal doesn’t mean it’s right,’” he said. “Whether it’s technically lobbying or technically working as an attorney, the net asset that was so valuable to Google was his experience with his agency and his expertise within the agency.”
Luke Mullins is a senior writer at Washingtonian Magazine. He can be reached at @lmullinsdc.