[Congressional Record Volume 163, Number 8 (Thursday, January 12, 2017)]
[Senate]
[Pages S308-S309]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               INVESTIGATION ON INTERNET SEX TRAFFICKERS

  Mr. PORTMAN. Mr. President, I rise today during Human Trafficking 
Awareness Week to talk about the scourge of human trafficking, and, 
specifically, about an investigation that the Senate has just concluded 
that matters to every single State represented in this Chamber and to 
every American.
  We are told now that human trafficking, including sex trafficking, is 
a $150 billion a year industry. That makes it the second largest 
criminal enterprise in the world, behind the drug trade. Unfortunately, 
it is happening in all of our States, including my home State of Ohio. 
It is growing as a problem.
  A couple of weeks ago, two people were arrested in my home town of 
Cincinnati in connection with sex trafficking. Police charged a women 
with luring an underage girl to commit a sex act with a 56-year-old 
man.
  That was just 2 weeks after police in Blue Ash, OH, just up the road, 
broke up what they said was a sex trafficking ring at a hotel. Police 
said that two men and two women rented two rooms at a hotel, paying 
cash, and forced four different women to perform sex acts. The women 
were given crack cocaine and heroin, presumably to keep them dependent 
on their traffickers.
  This is what I am hearing back home a lot when I talk to victims of 
sex trafficking. Typically, drugs are involved. In Ohio, it is usually 
heroin. These cases are alarming, and, unfortunately, we have reasons 
to believe that the problem is getting worse not better. The National 
Center for Missing and Exploited Children, really, the expert on this 
issue, particularly of kids who get involved in sex trafficking, 
reports an 846-percent increase in reports of suspected child sex 
trafficking from 2010 to 2015. That is an over 800-percent increase 
just in those 5 years.
  The organization found this spike to be ``directly correlated to the 
increased use of the Internet to sell children for sex.'' So it is kind 
of the dark side of the Internet, isn't it. What I am told sometimes by 
survivors of trafficking is that they say: Rob, this has moved from the 
street corner to the cell phone. There is widespread evidence that sex 
trafficking is increasingly doing that all over our country.
  In order to confront this problem, as chairman of the Permanent 
Subcommittee on Investigations, along with my colleague and ranking 
member Senator Claire McCaskill, I opened a bipartisan investigation 
into sex traffickers and their use of the Internet. This investigation 
began about 2 years ago. The National Center for Missing & Exploited 
Children says that nearly three-quarters--73 percent--of all suspected 
child sex trafficking reports it receives from the general public 
through its cyber tip line are linked to one Web site--a single Web 
site. That Web site is called Backpage.com.
  According to a leading anti-trafficking organization called Shared 
Hope International, ``[s]ervice providers working with child sex 
trafficking victims have reported that between 80 and 100 percent of 
their clients have been bought and sold on Backpage.com.'' Eighty to 
100 percent of their clients have been bought and sold on Backpage.com.
  Again, that is consistent with everything I have heard when I have 
been back home and spoken to and met with sex trafficking survivors. 
Backpage now operates in 97 countries, 934 cities worldwide. It is 
valued at well over half a billion dollars. According to an industry 
analysis, in 2013, 8 out of every 10 dollars spent on online commercial 
sex trafficking in the United States went to this one Web site, 
Backpage.
  Others, by the way, have chosen not to engage in this. There have 
been a number of cases around the country, including in Ohio, where 
Backpage.com was used by traffickers to sell underage girls for sex.
  Last spring, in my own State of Ohio, a man, who by the way has nine 
children of his own, was sentenced to 12 years in Federal prison for 
trafficking four underage girls who had run away from home in Akron and 
Canton, OH. He kept them locked in a hotel, supplied them with drugs 
like marijuana, heroin, and ecstasy, and sold them for sex on 
Backpage.com. When he was arrested, by the way, he was found with more 
than 8,000 bags of heroin.
  Just this week, or a week later after that, a man from Fort Wayne, 
IN, was charged with human trafficking and child prostitution after he 
was arrested on his way to Ohio. His intention, police say, was to 
traffic a 14-year-old girl whom he had met on Facebook, raped, and whom 
he planned to sell on Backpage.com.
  Backpage says it leads the industry in its screening of 
advertisements for illegal activity. In fact, Backpage's top lawyer has 
described their screening process as the key tool for disrupting and 
eventually ending human trafficking via the World Wide Web.
  But despite these boasts, this Web site and its owners consistently 
have refused to cooperate with our investigation, with other 
investigations relating to lawsuits around the country. With regard to 
our situation, we subpoenaed them for the documents, and they still 
refused to provide the documents or to testify. As a result, as my 
colleagues will remember, this body, the Senate, for the first time in 
over 20 years, voted unanimously to pass a civil contempt citation to 
require them to supply the documents, to come forward with this 
information.
  In August a Federal court order rejected Backpage's objection to that 
subpoena and compelled the company to turn over the subpoenaed 
documents to the subcommittee. Backpage appealed that and asked for a 
delay in that order. They took it all the way up to the Supreme Court 
of the United States. But their request was rejected. Since then, the 
subcommittee has been able to review the documents that have been 
submitted--over 1 million documents--including emails and other 
internal documents.

  What we found was very troubling, to say the least. After reviewing 
the documents, the subcommittee published a staff report on Monday of 
this week that conclusively shows that Backpage has been more deeply 
complicit in online underage sex trafficking than anyone imagined. We 
reached three principle findings: first, that Backpage has knowingly 
covered up evidence of criminal activity by systematically editing its 
so-called adult ads; second, that Backpage knows that it facilitates 
prostitution and even child sex trafficking; and third, that despite 
the reported sale of Backpage to an undisclosed foreign company in 
2014, taking them outside of the United States, the true owners of the 
company are the founders--James Larkin, Michael Lacey, and Carl Ferrer, 
their chief executive officer.
  First, on the editing of ads, our report shows that Backpage has 
knowingly covered up evidence of crimes by systematically deleting 
words and images suggestive of illegal conduct, including of child sex 
trafficking. That editing process sanitized the content of millions of 
advertisements in order to hide important evidence from law 
enforcement.
  In 2006, Backpage executives instructed staff to edit the text of 
adult ads, not to take them down but to edit them, which is exactly how 
they facilitated this type of trafficking, including child sex 
trafficking. By October 2010, Backpage executives had a formal process 
in place of both manual and automated deletion of incriminating words 
and phrases in ads.
  Backpage CEO Carl Ferrer personally directed his employees to create 
an electronic filter to delete hundreds of words indicative of sex 
trafficking or prostitution from ads before they were published.
  Again, this filter did not reject the ads because of the obvious 
illegal activity. They only edited the ads to try to cover it up. The 
filter did not change what was advertised, only the way it was 
advertised. So Backpage did nothing to try to stop this criminal 
activity. They facilitated it knowingly.
  Why did they do that? Backpage executives were afraid they would 
erode their profits. It is a very profitable business. In Ferrer's 
words, they were

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afraid they would ``piss off a lot'' of customers. What terms did they 
delete? Beginning in 2010, Backpage automatically deleted words 
including ``lolita''--referencing a 12-year-old girl in a book who was 
sold for sex--``teenage,'' ``rape,'' ``young,'' ``little girl,'' 
``teen,'' ``fresh,'' ``innocent,'' ``school girl,'' and even ``amber 
alert''--and then published the edited versions of the ads on their Web 
site. Backpage also systematically deleted dozens of words related to 
prostitution.
  This filter made these deletions before anyone at Backpage even 
looked at the ad. When law enforcement officials asked for more 
information about the suspicious ads, as they have routinely done, 
Backpage had already destroyed the original ad posted by the 
trafficker, and the evidence was gone.
  So this notion that they were trying to help law enforcement is in 
the face of the fact that they actually destroyed the ads that had the 
evidence. We will never know for sure how many girls and women were 
victimized as a result. By Backpage's own estimate, the company was 
editing 70 to 80 percent of the ads in the adult section by late 2010.
  Based on our best estimate, that means Backpage was editing more than 
half a million ads every year. Internal emails indicate the company was 
using the filter to some extent as late as 2014. We simply don't know 
if they are still using a filter. Eventually, Backpage reprogrammed its 
filters to reject some ads that contained certain egregious words 
suggestive of sex trafficking.
  But the company did this by coaching its customers on how to post 
clean ads to help facilitate the criminal conduct of these traffickers. 
So they did reject some ads, but then they went back to the customer to 
say: This is how you could do it better. For example, starting in 2012, 
a user advertising sex with a teen would get this error message: 
``Sorry, `teen' is a banned term.''
  With a one-word change to the ad, the user would be permitted to post 
the same ad, the same offer. In October 2011, Backpage CEO Carl Ferrer 
directed his technology consultant to create an error message when a 
user entered an age under 18 years old. Just like the word filter, the 
customer could just enter a new age that the ad would then post.
  With regard to ownership, our investigation revealed that acting 
through a serious of domestic and international shell companies, 
Backpage's founders lent their CEO, Carl Ferrer, more than $600 million 
to buy the Web site. While Ferrer is the owner of Backpage, Backpage's 
previous owners retain near total debt equity in the company and 
continue to reap Backpage's profits in the form of their loan 
repayments.
  They can also exercise control over Backpage's operations and 
financial affairs pursuant to the loans and to other agreements. The 
elaborate corporate structure under which Ferrer purchased Backpage 
through a series of foreign entities appears to provide absolutely no 
tax benefit--based on their accountant's information to us--and serves 
only to obscure Ferrer's U.S.-based ownership.
  Based on all of these findings, it is clear that Backpage actively 
and knowingly covered up criminal sexual activity--sex trafficking--
that was taking place on its Web site, all in order to increase its 
profits at the expense of the most vulnerable among us.
  Backpage has not denied a word of these findings. Instead, several 
hours after our report was issued, the company closed what they call 
their adult section. They closed it down. Frankly, this just validates 
our findings.
  The National Center for Missing & Exploited Children said this about 
Backpage's closure of its adult site: ``As a result [of this closure], 
a child is now less likely to be sold for sex on Backpage.com.''
  No one is interested in shutting down legitimate commercial activity 
and speech, but we do want to put a stop to criminal activity.
  I want to thank Senator McCaskill and her staff for their shoulder-
to-shoulder work with my team on the Permanent Subcommittee on 
Investigations on this bipartisan investigation. I am also grateful to 
the members of the full committee and the Senate as a whole for 
unanimously supporting us as we pursued the enforcement of this 
subpoena against Backpage.com.
  But we are not done. In the weeks and months ahead, I intend to 
explore whether potential legislative remedies are necessary and 
appropriate to end this type of facilitation of online sex trafficking.
  At a hearing on the report on Tuesday, Backpage CEO and other company 
officials pled the Fifth Amendment, invoking the right against self-
incrimination, rather than respond to questions about the report's 
findings.
  The subcommittee also heard powerful testimony from parents whose 
children had been trafficked on Backpage.com. One mother talked about 
seeing her missing daughter's photograph on Backpage.com, frantically 
calling the company to tell them that was her daughter and to please 
take down the ad.
  Their response: Did you post the ad?
  Her response: Of course I didn't post the ad. That is my daughter. 
Please take it down.
  Their response: We can only take it down if you paid for the ad.
  I urge my colleagues to join me in this effort to ensure that does 
not happen again. What happens to these kids is not just tragic; it is 
evil.
  I urge my colleagues to join me in reforming our laws so they work 
better to protect these children.
  Mr. President, I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Blunt). The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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