The image in question was removed. His own take on the image: I am not angry at Google about this, as some might suggest, only because I too found the image bordering on the limits of what is legally permissible and hoped to highlight the fact that it is allowed to exist within a grey area of legality. I find that sentiment hard to reconcile with the "I have no idea" claim. I don't think he was outright lying, but I suspect he was in denial.
edit: Just realized I said "images" and not "image" in my original post. I was thinking about the image even he thought was a legal grey area.
I would have assumed AdWords a hundred times over.