They almost certainly have local operating companies that are wholly owned subsidiaries of the US parent company - just having a separate company isn't enough I suspect that separate ownership would also be requried.
They could set up special purpose vehicles, with very clear operating rules. That way, if the US asks, Google can say that they have no control over the subsidiary.
If Google US has no control over Google EU then a number of issues could arise. Does Google EU have access to Google US data? What about the code that runs everything? What about profits - why would Google EU send profits back to Google US?
It's tricky, but no trickier than their accounting system ;)
Google EU has a mission to "provide Google US with data hosting, and send profits back to the mothership". They have a contract, in which Google US grants free use of any code data that Google EU needs.
Google EU has a strict constitution, which prevents them from disclosing data, even if Google US wants them to. This clause in their constitution states that it cannot be changed.
If that's too extreme, they could allow the information to be released, but only if cleared by some specific third party.
That's just a rough idea. I'm sure Google's lawyers could come up with something much better.
