Paid links or Sponsored Links ?
An email was sent out by Google AdSense team that might reflects the conflict between what Matt Cutts and other Googlers:
As many of you know, our program policies prohibit any means of encouraging users to click on Google ads or bringing excessive attention to ad units. For example, sites may not contain phrases such as “click the ads,” “support our sponsors,” “visit these recommended links,” or other similar language that could apply to the Google ads on your site. In addition, publishers are not permitted to label the Google ads with text other than “sponsored links” or “advertisements.”
Organic and Natural Search Engine Optimization Conflict :
Google might be able to check the placement of words and see how many links you have placed in a natural way next to the word advertising, partners, friends, paid links, etc..

