Pando

Eric Schmidt publicly defends Jared Kushner. Next day, Trump shutting DoL division investigating Google

By Sarah Lacy , written on June 1, 2017

From The Politics Desk

Remember back in February, when we were coming off the high of the women’s march and the travel ban had just been proposed and all of Silicon Valley’s rage was concentrated?

Protesting was the new brunch, and employees forced-- forced-- Silicon Valley leaders to grow a spine. So much so that CEOs of multi-billion dollar companies were actually saying in despair, “WHAT DO YOU WANT US TO DO?”

Sure, there’s still a lot of Trump outrage, but it seems Silicon Valley workers have mostly just gotten back to doing their jobs. (Save that one dude who’s spent all the money on those Elon Musk billboards.)

Well, here’s a strange coincidence someone close to Google alerted me to earlier this week. One that all those protesting, woke Google employees from back in February may want to ask their company to explain.

The weirdness started late last week when with news reports that Google said it couldn’t comply with the US Department of Labor request for information about its own wage gap because it was too hard and too expensive. Remember those? Sure you do, the Internet widely mocked them.

I mean, the idea that one of the companies vying to be the first $1 trillion market cap company, the company that owns “data” the way Facebook owns relationships and Amazon owns logistics, would use either of those things as an excuse was breathtaking. It was like Frosty the Snowman saying he’d love to help the kids, but it’s just too cold outside for him.

Data and shit loads of money: Those are pretty much Google in a nutshell. The sum Google was complaining about, an additional $100,000. What? Isn’t that a single engineer bonus? How little do you care about the woman working for you if $100k is what stands in the way of understanding if you are systematically underpaying them?

From the Guardian, covering the hearing:

Noting Google’s nearly $28bn annual income as one of the most profitable companies in the US, DoL attorney Ian Eliasoph scoffed at the company’s defense, saying, “Google would be able to absorb the cost as easy as a dry kitchen sponge could absorb a single drop of water.” 

It wasn’t just pathetic and unfeeling, the argument was also nonsensical: Google had previously argued, it’s own in-depth investigation showed there was no wage gap when it came to women or minorities in its US workforce. Google was indignant that it was being questioned on this front. As Fortune pointed out, on Google’s “fair pay best practices” page, it says the work it did to come to that sweeping and bold conclusion was “a complicated process [that] requires advanced statistics skills and could have serious legal implications for your organization.”

It was a particularly strange defense coming from a company that has had so many female friendly policies, like generous paid leave, which it proudly said increased its retention of female employees.

It also seemed unlikely to hold up in a case where Google’s own assurances haven’t been enough to dissuade the Department of Labor which reminded Google this week: “Google has consistently earned millions in lucrative government contracts,” said Eliasoph, according to the Guardian. The implicit message was: Compliance is the cost of doing this much business with the government.

Or is it?

On Sunday, the news out of Google took a weirder turn when Eric Schmidt-- of all people-- was quoted defending Jared Kushner in this long New York Times profile:

With a staff of about a half-dozen, Mr. Kushner has also created an office for innovation that is tackling a disparate array of projects, from promoting apprenticeship programs as an alternative to four-year college degrees to modernizing how the government buys software.

Eric Schmidt, the executive chairman of Alphabet, Google’s parent company, said in an email, “His passion on this is very real.”

What, you might wonder (and Google staff certainly did) would Schmidt or any Silicon Valley leader stand to gain from being one of the only on the record sources defending Kushner just as the Russia scandal was engulfing the President’s son in law?

That’s a good question.

Because the very next day this stunning news broke:

The Trump administration is planning to disband the Labor Department division that has policed discrimination among federal contractors for four decades, according to the White House’s newly proposed budget, part of wider efforts to rein in government programs that promote civil rights. 

That’s right: As luck would have it, three days after the DoL reminded Google that compliance with its anti-discrimination investigation was the price of being a government contractor, and just hours after Eric Schmidt issues his bizarre public defense of Jared Kushner, news broke that the Trump administration was planning to disband the organization doing the investigation.

More from the Post:

The proposal to dismantle the compliance office comes at a time when the Trump administration is reducing the role of the federal government in fighting discrimination and protecting minorities by cutting budgets, dissolving programs and appointing officials unsympathetic to previous practices. 

For the avoidance of doubt, the Post explains the difference between the Department of Labor and the Equal Employment Opportunity Commission:

Historically, the two entities have played very different roles. Unlike the EEOC, which investigates complaints it receives, the compliance office audits contractors in a more systematic fashion and verifies that they “take affirmative action” to promote equal opportunity among their employees.

Patricia A. Shiu, who led the compliance office from 2009 to 2016, said the audits are crucial because most workers don’t know they have grounds to file a complaint. “Most people do not know why they don’t get hired. Most people do not know why they do not get paid the same as somebody else,” she said.

(Fun fact, the compliance office also scored a recent $1.7 million settlement victory against [Pando investor] Peter Thiel’s Palantir over discriminatory practices when hiring Asian workers.)

So, let’s review that timeline one more time

On Friday, Google brushes off a DoL investigation into discriminatory hiring practices.

On Sunday, Eric Schmidt becomes the only major Valley executive to defend Donald Trump’s son in law over the Russian scandal.

On Monday, it’s revealed that Trump is shutting down the division investigating Google.

Here’s the thing: Our audience clearly comes down on these types of things in two distinct camps. There are the people who feel that CEOs have a fiduciary duty to get what they can out of the Trump Administration, because they aren’t going to change his mind on policy anyway, and there’s the risk of retaliation.

Consider Elon Musk: He’s devoted his fortune and life’s work to combatting climate change, and finding us a new place to live if he can’t. His support of Trump has shown just how little wiggle room anyone running a business that relies on favorable regulation and government contracts (as all three of his companies do) has.

In addition to other carrots, Musk dangled Trump’s “Kennedy moment” of going to Mars in front of him. And sure enough Trump signed into law the NASA Transition Act that would channel much of that Mars money to private contractors like Space X.

Now-- now!-- Musk is threatening to pull from Trump’s economic advisory council if he pulls out of the Paris Accord. Yes, it’s a line being crossed when it comes to the environment. But you could also argue a proposal to gut the EPA was. Musk has picked his perfect strategic moment.

And that is why many investors value Tesla higher than major automakers.

So maybe those same folks read the coincidental nature of what happened Sunday thru Tuesday and do a nice slow clap for Google: Stall the agency with any lame excuse, because it’s getting dismantled anyway! Bravo!

But this is deeply disappointing because Google is supposed to be better than this, and frankly it has the financial wherewithal to be better than this. Google has been a leader when it comes to employing women in a lot of respects.

Kim Scott, CEO of Candor, told me last year that Google was an ideal place to have a high-risk pregnancy. She was so pampered, she could get prenatal massages one floor away from her office. Katie Stanton, of ColorLabs, told a story of Google hiring her when she had three young kids and told her boss she’d have to leave at 5 pm everyday. “You should!” her boss said. Susan Wojcicki helped craft one of the most generous parental leave policies in Silicon Valley, taking five long maternity leaves herself and arguing passionately for years for why all Americans should have that right and how it’s saved Google money in the long run because retention of female leaders has been so much better.

It is not a coincidence that many of the most powerful women in tech-- Marissa Mayer, Sheryl Sandberg, Wojcicki-- all built their careers and names at Google.

And yet, many of these same women have told me that Google wasn’t this way because of the founders or the male senior leadership. It was this way because it employed senior women early on, who advocated for other women. Google does this better than many companies, but there are still scores of stories of harassment, stealing credit from female employees, unwanted advances and discrimination.

It must be frustrating for women who get discriminated against at Google to always hear how great Google is for women. Turns out, that burden was too much for Google to live up to as well.