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Conchita Sarnoff

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Backpage Not Complying With Requests to Help Stop Sex Trafficking

Posted: 04/ 2/2012 9:55 pm

Nicholas Kristof reported in Sunday's New York Times Magazine that Goldman Sachs owns a 16% stake of Village Voice Media. Village Voice Media in turn owns Backpage; and "Backpage replaced Craigslist as the leader in the prostitution online ad space" according to an October 19, 2010 report published by AIMGROUP.COM, publishers of classified intelligence reports.

For years no one had uncovered the Village Voice ownership until Kristof started the search. Kristof said "the owners of Village Voice Media include a group of private equity financiers, comprising Goldman Sachs, who own a 16 percent stake." Kristof also reported that Goldman Sachs "was mortified when he made inquiries last week about its investment in America's leading Web site for prostitution ads." According to his report Goldman Sachs "began working frantically to unload its shares," and on Friday afternoon [March 30, 2012], the investment bank told Kristof "it had just signed an agreement to sell its stake to management." "We had no influence over operations," Andrea Raphael, a Goldman Sachs spokeswoman," told Kristof.

Almost two years earlier, AIMGROUP.com reported that "Village Voice Media, with its Backpage.com classifieds site, was the new leader in prostitution advertising now that Craigslist eliminated its erotic services ad section in the United States". According to Kristof's Sunday op-ed, Backpage is an "emporium for girls and women -- some under age or forced into prostitution."

Like Craigslist, most escort ads on Backpage are placed by consenting adults. However, it's also evident that Backpage plays a major role in the sex trafficking of minors. Kristof cited "a recent case in New York City where prosecutors claimed that a 15-year-old girl was drugged, tied up, raped and sold to johns through Backpage and other sites."

"Backpage has 70 percent of the market for prostitution ads", according to the AIM Group report. Village Voice Media makes some effort to screen out ads placed by traffickers and to alert authorities to abuses, but neither law enforcement officials nor anti-trafficking organizations are impressed. As a result, pressure is growing on the company to drop escort ads.

Kristof said "after [his] last column on this issue that 19 U.S. senators" (including Senator's Marco Rubio [R-FL], Patrick Leahy [D-VT], Barbara Boxer [D-CA], and Richard Durbin [D-Ill], wrote a letter to Jim Larkin, Village Voice Media CEO, petitioning his company to stop abetting traffickers.

On Thursday, antitrafficking campaigners protested outside the Village Voice newspaper (which is owned by Village Voice Media). A petition on Change.org criticizing the company gathered 220,000 signatures. In Washington State, the governor signed a bill into law on Thursday that could exposed, Backpage to criminal sanctions if it advertises under-age girls for sex without verifying their ages.

According to Kristof "there's some uncertainty about the constitutionality of the law." Village Voice Media's majority owners Jim Larkin and Michael Lacey own about half of the shares, according to Kristof. "The best known of the other owners is Goldman Sachs, which invested in the company in 2000 (before Backpage became a part of Village Voice Media in the 2006 merger). A Goldman managing director, Scott L. Lebovitz, sat on the Village Voice Media board for many years. Goldman says he stepped down in early 2010."

"Backpage.com's revenue from online prostitution ads in 23 U.S. cities increased 15.3 percent to at least $1,671,685 in September 2010 compared with August [of that same year]," according to research conducted by the Advanced Interactive Media Group in Altamonte Springs. Fla. "That's an annual rate of just over $20 million." Craigslist's decision to reject any further advertising for escort services put a huge dent in revenue generated by prostitution advertising. In August, the AIM Group estimated that the top sites for prostitution ads would generate nearly $76 million in annual revenue. Without Craigslist in the mix that estimate plunged 48.4 percent to $39.2 million.

Two years ago, "AIM Group estimated that Backpage.com's escort-service ad revenue increased $221,000 in September 2010", chickenfeed compared with the monthly $3.7 million that U.S. sex-workers, pimps and traffickers paid to Craigslist for listings. Just imagine those figures today.