Yes, that is the problem. However, I know that at least one of them was penalized for using TextLinkAds and stopped advertising with us because they decided to adopt a scorched earth policy in an attempt to have manual penalties removed. They simply tried to remove all possible links to themselves that they had paid for.

I'm afraid the issue is not as black and white as I'd like it to be.

I do not believe that Google would intentionally punish sites for buying legitimate advertising.