It appears to be a historical investigation as both companies said they received subpoenas in 2007 and 2009. A jury in San Francisco last week convicted three defendants "of operating illegal pharmacies that used FedEx and UPS to deliver drugs without proper prescriptions." In all, there have been ten such convictions in San Francisco this year (including guilty pleas prior to indictment and from those who decided to cooperate after indictment, and a few who went to trial earlier in the case.)

Here's an article on the three men convicted last week in San Francisco. The trial lasted six weeks.

A federal jury in San Francisco convicted Pekin businessman Daniel Johnson and two other men Thursday of operating a $26 million online pharmacy to sell millions of prescription drugs over the Internet outside of legal and medical regulations.

... Federal prosecutors accused Johnson of operating the computer elements for a business in which the defendants filled orders for 4.4 million pills, 94 percent of them controlled substances. Most of the drugs were sold as tranquilizers, diet pills and impotency drugs

....Prosecutors told the jury the trio sold millions of pills to people across the country without face-to-face consultation by Carozza to confirm their need for medical prescriptions.

Fedex' Fitzgerald also said:

"We have no interest in violating the privacy of our customers by opening and inspecting their packages in an attempt to determine the legality of the contents," Fitzgerald said.

If true, that's a change. In the old days, Fedex employees would open suspicious packages and call the feds, who would have it delivered, sometimes by a DEA agent wearing a Fedex uniform. (In 2011, cops were still donning Fedex uniforms to make controlled deliveries. Another one here.)

Fedex and UPS have been in bed with the DEA, Customs and other federal agencies in the War on Drugs for many years. In 2000, Congress held a hearing, Drugs in the Mail: How Can it Be Stopped. (Transcript here.) Every witness touted the joint DEA-Fedex operation called Operation Green Air. One Congressman stated:

I want to especially recognize UPS, FedEx, and DHL for their positive response and actions to request from our law enforcement agencies to help in curtailing illegal narcotics transport. We'll hear more details about what both the public and private sector is doing in that regard, what they've done and their plans for the future.

One very successful operation I'd like to cite is Operation Green Air, which was conducted by representatives of our Drug Enforcement Administration [DEA], and the U.S. Customs Service working in conjunction with FedEx Corp. Operation Green Air was a large scale Mexican-Jamaican marijuana trafficking investigation that resulted in the arrest of 104 individuals and the seizure of 35,000 pounds of marijuana, $4.5 million in assets, and 18 weapons.

A UPS executive testified at the hearing:

I'm here to discuss how UPS works with the Customs Service to interdict narcotics and other illicit merchandise.

Mr. Chairman, our efforts in this area are extensive but our philosophy is simple. UPS is committed to building the business connections of the next century, but we are committed in equal measure to ensuring those connections are used to deliver packages, not poison. When customers entrust parcels to UPS, we want them to be confident they will be shipped swiftly and delivered on time. But if drug dealers attempt to use our network to ship contraband, whether it be drugs or dollars, we want them to be certain they will be caught swiftly and they will do time. Our partnership with the Customs Service has dramatically curtailed the flow of contraband.

...In addition to our work with Customs, UPS conducts an aggressive and thorough drug interdiction program of our own. We train delivery drivers to spot packages that may contain illegal drugs. We screen for suspicious parcels. We routinely work with the other law enforcement agencies like the FBI, DEA, and State and local authorities, including providing them information about any offender we identify.

UPS works closely with Customs officials at our major hubs at our own expense, as the law requires. We also work with Customs, especially through our tracking system, to target and search outbound UPS shipments.

...Mr. Chairman, we undertake these actions, and more, because it is our legal responsibility. But even more important, we do it because it is our moral responsibility.

Also testifying: Robert A. Bryden, then vice president of Corporate Security for FedEx Corp. (Four years earlier, he retired as Chief of Operations for DEA.)

Our company believes very deeply that we have a strong civic responsibility to work with law enforcement, with the Congress, and with everyone in this country to move forward in our efforts to limit those options available to drug traffickers.

...At times we put ourselves at immediate risk, as we did, quite candidly, to some degree in the Green Air Operation. Normally, when FedEx discovers illegal drug trafficking in our system, our normal process would be to investigate it internally, bring in the local law enforcement organizations that might have jurisdiction, then immediately at the conclusion of our internal investigation terminate any employees that were found to have been involved and to have violated that confidence that we place in them.

In the instance of Green Air, we were asked by DEA and Customs not to take that action and to let them continue that investigation for a period of time so that they would be able to uncover the full scope of that illegal criminal organization. We were happy to do that.

...I think that private industry does have a role to play in cooperating with law enforcement, to help give them information that they need when they need it and when they request it. And at FedEx, we are happy to have the technology available to provide to them data that helps them conclude many of their investigations in a very positive manner.

DHL , which apparently is not under investigation, does the same:

DHL also maintains a comprehensive shipment inspection program. DHL performs thousands of shipment inspections on a daily basis. DHL trains its employees to inspect all shipments that meet a certain profile criteria for contraband, i.e., illegal drugs.

Our shipment inspection program routinely leads to discovery of such contraband and eventual provision of notification and assistance to law enforcement. The DHL security department via its regional managers maintains constant liaison with local State and Federal law enforcement. DHL has frequently assisted the FBI, DEA, U.S. postal inspectors, and U.S. Customs Service with ongoing criminal matters where subjects of Federal investigations have utilized or attempted to utilize the DHL network.

... This assistance has led to numerous criminal drug convictions, seizures of illicit drugs, forfeitures totaling in the millions of dollars.

The Wall St. Journal reported on Fedex's increased cooperation with the feds after the 9/11 attacks in terrorism cases:

FedEx has opened the international portion of its databases, including credit-card details, to government officials. It has created a police force recognized by the state of Tennessee that works alongside the Federal Bureau of Investigation. The company has rolled out radiation detectors at overseas facilities to detect dirty bombs and donated an airplane to federal researchers looking for a defense against shoulder-fired missiles.

Moreover, the company is encouraging its 250,000 employees to be spotters of would-be terrorists. It is setting up a system designed to send reports of suspicious activities directly to the Department of Homeland Security via a special computer link.

Remember Operation Tips, the "Total Information Awareness (TIA) program"? When it collapsed, Fedex stepped up its own program:

After the collapse of TIPS, FedEx pressed ahead with its own program, one that embodied many of the same objectives, much to the delight of the government....Mr. Bryden, the former security chief, says FedEx worked with Homeland Security officials last summer to develop a computer system that simplifies the reporting of suspicious behavior.

Now the feds want to bite the hands of those who feed them. Why?