[Senate Report 114-214]
[From the U.S. Government Publishing Office]
Calendar No. 375
114th Congress } { Report
2d Session } SENATE { 114-214
_______________________________________________________________________
RESOLUTION DIRECTING THE SENATE
LEGAL COUNSEL TO BRING A CIVIL
ACTION TO ENFORCE A SUBPOENA OF THE
PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
__________
R E P O R T
OF THE
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ON
S. Res. 377
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
February 29, 2016.--Ordered to be printed
____________
U.S. GOVERNMENT PUBLISHING OFFICE
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______________________________________________________________________________
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Calendar No. 375
114th Congress } { Report
SENATE
2d Session } { 114-214
======================================================================
RESOLUTION DIRECTING THE SENATE LEGAL COUNSEL TO BRING A CIVIL ACTION
TO ENFORCE A SUBPOENA OF THE PERMANENT SUBCOMMITTEE ON INVESTIGATIONS
_______
February 29, 2016.--Ordered to be printed
_______
Mr. Johnson, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. Res. 377]
The Committee on Homeland Security and Governmental
Affairs, having considered an original resolution (S. Res. 377)
directing the Senate Legal Counsel to bring a civil action to
enforce a subpoena of the Permanent Subcommittee on
Investigations, reports favorably thereon without amendment and
recommends that the resolution do pass.
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire CORY A. BOOKER, New Jersey
JONI ERNST, Iowa GARY C. PETERS, Michigan
BEN SASSE, Nebraska
Keith B. Ashdown, Staff Director
Christopher R. Hixon, Chief Counsel
David N. Brewer, Chief Investigative Counsel
Gabrielle D'Adamo Singer, Deputy Chief Counsel for Governmental Affairs
Gabrielle A. Batkin, Minority Staff Director
John P. Kilvington, Minority Deputy Staff Director
Mary Beth Schultz, Minority Chief Counsel
Laura W. Kilbride, Chief Clerk
CONTENTS
Page
I. Purpose..........................................................1
II. Background.......................................................2
III. Discussion.......................................................6
IV. Legislative History.............................................13
I. PURPOSE
Backpage.com, LLC (Backpage) owns and operates the largest
commercial sex services advertising platform in the United
States, Backpage.com. Backpage officials have publicly
acknowledged that criminals use the website for sex
trafficking, including trafficking of minors.
On October 1, 2015, as part of an investigation of
businesses that directly or indirectly facilitate criminal sex
trafficking, the Permanent Subcommittee on Investigations (the
Subcommittee)\1\ issued a subpoena duces tecum to Carl Ferrer,
Chief Executive Officer of Backpage. The subpoena required the
production of documents concerning: Backpage's policies and
practices with respect to reviewing, blocking, editing, and
modifying advertisements; the extent to which Backpage
cooperates with law enforcement investigations of sex
trafficking; Backpage's removal of unlawful advertisements in
its ``adult'' sections; the number of advertisements Backpage
deletes or blocks; and revenue generated by Backpage's adult
advertisements. Backpage has not complied with the subpoena.
Fact-finding in this area will assist Congress in its
consideration of potential legislation in a number of areas of
legislative interest, including interstate and international
human trafficking and the federal law-enforcement policies and
resources devoted to combatting it.
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\1\The Permanent Subcommittee on Investigations is a subcommittee
of the Homeland Security and Governmental Affairs Committee (the
Committee). Pursuant to 2 U.S.C. Sec. 288d, this report recommending
adoption of a resolution authorizing the Senate Legal Counsel to bring
a civil action compelling production must be made by the Homeland
Security and Governmental Affairs Committee on behalf of the Permanent
Subcommittee on Investigations.
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The Senate possesses constitutional and statutory authority
to require witnesses to provide evidence. A mechanism for
enforcing those rights is supplied under section 705(c) of the
Ethics in Government Act of 1978, 2 U.S.C. 288d(c), which
requires that a proposed resolution to authorize the Senate
Legal Counsel to bring a civil action to compel Mr. Ferrer to
comply with certain of the document requests in the
Subcommittee's subpoena, be accompanied by a report on the
following subjects:
(A) the procedure followed by the Subcommittee in
issuing the subpoena to Mr. Ferrer;
(B) the extent to which Mr. Ferrer has complied with
the subpoena;
(C) the objections raised by Mr. Ferrer; and
(D) the comparative effectiveness of bringing a civil
action compared to other remedies.
To place the Committee's request for civil enforcement of
its subpoena in proper context, this report first provides the
background to the Subcommittee's October 1, 2015, subpoena and
its relevance to the Subcommittee's investigation.
II. BACKGROUND
A. Sex Trafficking on the Internet
Human trafficking is a crime generating billions of dollars
each year in illegal proceeds, making it more profitable than
any transnational crime except drug trafficking.\2\ Under
United States law, human trafficking includes, among other
things, the unlawful practice of selling, soliciting, or
advertising the sexual services of minors or of adults who have
been coerced into participating in commercial sex.\3\ Precise
empirical data concerning this black-market trade are scarce.
But, in 2013, social scientists estimated that there were as
many as 27 million victims of human trafficking worldwide,\4\
including 4.5 million people trapped in sexual exploitation.\5\
In the United States, over eight in ten suspected incidents of
human trafficking involve sex trafficking.\6\
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\2\U.S. Dep't of Homeland Security, Blue Campaign: What is Human
Trafficking? (Sept. 14, 2015), http://www.dhs.gov/blue-campaign/what-
human-trafficking.
\3\See 18 U.S.C. Sec. 1591(a); 27 U.S.C. Sec. 7102(10).
\4\U.S. Dep't of State, Trafficking in Persons Report 2013, at 7
(June 2013), http://www.state.gov/documents/organization/210737.pdf.
\5\Polaris Project, Sex Trafficking, http://www.polarisproject.org/
sex-trafficking.
\6\U.S. Dep't of Justice, Bureau of Justice Statistics,
Characteristics of Suspected Human Trafficking Incidents, 2008-2010, at
1 (Apr. 2011), http://bjs.ojp.usdoj.gov/content/pub/pdf/cshti0810.pdf.
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Too often, the victims of sex trafficking are minors. The
Department of Justice has reported that more than half of sex-
trafficking victims are 17 years old or younger.\7\ In the last
five years, the National Center for Missing and Exploited
Children (NCMEC) reported an 846 percent increase in reports of
suspected child sex--trafficking--an increase the organization
found to be ``directly correlated to the increased use of the
Internet to sell children for sex.''\8\ Children who run away
from home are particularly vulnerable to this crime; ``[i]n
2014, one in six endangered runaways reported to NCMEC was
likely a child sex-trafficking victim.''\9\
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\7\U.S. Dep't of Justice, Office of Juvenile Justice & Delinquency
Prevention, Literature Review: Commercial Sexual Exploitation of
Children/Sex Trafficking, at 3 (2014) (citing Bureau of Justice
Statistics data), http://www.ojjdp.gov/mpg/litreviews/
CSECSexTrafficking.pdf.
\8\Testimony of Yiota G. Souras, Senior Vice President & General
Counsel, National Center for Missing & Exploited Children, before
Permanent Subcommittee on Investigations, at 2 (Nov. 19, 2015); Br. of
National Center for Missing & Exploited Children, J.S. v. Village Voice
Media Holdings, LLC, No. 4492-02-II, at 3 (Wash. Sup. Ct. Sept. 15,
2014). Congress designated NCMEC to be the ``official national resource
center and information clearinghouse for missing and exploited
children.'' 42 U.S.C. Sec. 5773(b)(1)(B). Among its 22 statutorily
authorized duties, NCMEC assists law enforcement in identifying and
locating victims of sex trafficking and operates a ``cyber tipline,''
which collects reports of Internet-related child sexual exploitation,
including suspected child sex trafficking. Id.
Sec. Sec. 5773(b)(1)(P)(3), (b)(1)(V).
\9\Testimony of Yiota G. Souras, Senior Vice President & General
Counsel, National Center for Missing & Exploited Children, before
Permanent Subcommittee on Investigations, at 3 (Nov. 19, 2015).
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Online advertising has transformed the commercial sex trade
and in the process has contributed to the explosion of domestic
sex trafficking.\10\ Sex trafficking previously took place ``on
the streets, at casinos and truck stops, and in other physical
locations.''\11\ Now it appears that ``most child sex
trafficking currently occurs online.''\12\ Sex trafficking has
thrived on the Internet in part because of the high
profitability and relatively low risk associated with
advertising trafficking victims' services online in multiple
locations.\13\ With the aid of online advertising, traffickers
can maximize profits, evade law-enforcement detection, and
maintain control of victims by transporting them quickly within
and between states.
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\10\Urban Institute, Estimating the Size and Structure of the
Underground Commercial Sex Economy in Eight Major US Cities, at 234
(March 2014) (``The overall sex market has expanded . . . and law
enforcement detection has been reduced.''), http://www.urban.org/
uploadedpdf/413047-underground-commercialsex-economy.pdf; id. at 237-38
(``The results presented here corroborate [previous] findings that the
use of the Internet is not necessarily displacing street-based sex
work, but is likely helping to expand the underground commercial sex
market by providing a new venue to solicit sex work.'').
\11\Backpage.com, LLC v. Dart, No. 15-cv-6340, Doc. 88-4, at 3
(N.D. Ill. Oct. 6, 2015), rev'd., Backpage.com, LLC v. Dart, No 15-3047
(7th Cir. Nov. 30, 2015).
\12\Id.
\13\Urban Institute, supra n.15, at 218 (reporting on multiple
studies concluding Internet-facilitated commercial sex transactions are
``not as easily detected by law enforcement''); U.S. Dep't of Justice,
National Strategy for Child Exploitation Prevention and Interdiction: A
Report to Congress, at 33 (Aug. 2010) (noting the increase in
profitability of trafficking children with the aid of the Internet and
explaining how the movement of sex trafficking victims from city to
city, with the help of online advertisements, makes building criminal
cases more difficult), http://www.justice.gov/psc/docs/
natstrategyreport.pdf; Michael Latonero, Human Trafficking Online: The
Role of Social Networking Sites and Online Classifieds, at 13 (Sept.
2011) (quoting former NCMEC president and CEO Ernie Allen as stating,
``[o]nline classified ads make it possible to pimp these kids to
prospective customers with little risk''), https://
technologyandtrafficking.usc.edu/files/2011/09/
HumanTrafficking_FINAL.pdf.
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B. Commercial Sex Advertising and Backpage.com
Sex traffickers have made extensive use of websites that
serve as marketplaces for ordinary commercial sex and escort
services. These sites may facilitate the sex trade by providing
an easily accessible forum that matches buyers of sex with
anonymous traffickers selling minors and adults.
One such site, Backpage.com, is similar in look and layout
to the online marketplace Craiglist.com. It displays
advertisements in sections such as ``community,'' ``buy/sell/
trade,'' ``jobs,'' as well as ``adult.'' Advertisements in the
``adult'' section typically consist of a headline, a photo or
photos, video, and a brief description of the services being
offered. Backpage's classified listings are localized by city
or region; as of November 2015, Backpage had sites in 431
cities in the United States and 444 other cities around the
world.\14\
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\14\Backpage's predecessor company was an alternative news weekly,
The New Times, founded in 1970 in Phoenix by James Larkin and Michael
Lacey. In 2005, New Times Media acquired The Village Voice, based in
New York, and the new entity, still owned by Mr. Larkin and Mr. Lacey,
renamed itself Village Voice Media. Richard Siklos, The Village Voice,
Pushing 50, Prepares to Be Sold to a Chain of Weeklies, The New York
Times (Oct. 24, 2005), available at http://www.nytimes.com/2005/10/24/
business/the-village-voice-pushing-50-prepares-to-be-sold-to-a-chain-
of-weeklies.html?_r=0. In response to public pressure regarding its
adult advertisements and the alleged connection to sex trafficking,
Village Voice Media is reported to have spun off its media holdings
into Voice Media Group. In the wake of that spinoff, Village Voice
Media, and its owners Mr. Larkin and Mr. Lacey, retained ownership of
Backpage. Mallory Russell, Village Voice Management Buyout Leaves
Backpage.com Behind, Advertising Age (Sept. 24, 2012), available at
http://adage.com/article/media/village-voice-management-buyout-leaves-
backpage/237371/.
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Backpage is a market leader: in 2013, it reportedly netted
more than 80 percent of all revenue from online commercial sex
advertising in the United States.\15\ NCMEC has reported that
of the suspected child trafficking reports it receives from the
public, 71 percent involve Backpage.\16\ According to the
Massachusetts Attorney General, ``[t]he vast majority of
prosecutions for sex trafficking now involve online
advertising, and most of those advertisements appear on
Backpage.''\17\ A Federal court in Seattle echoed those
findings, concluding in 2012 that ``[m]any child prostitutes
are advertised through online escort advertisements displayed
on Backpage.com and similar websites.''\18\
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\15\Advanced Interactive Media Group, Prostitution-ad revenue up
9.8 percent from year ago (Mar. 22, 2013), http://aimgroup.com/2012/03/
22/prostitution-ad-revenue-up-9-8-percent-from-year-ago/.
\16\Testimony of Yiota G. Souras, Senior Vice President & General
Counsel, National Center for Missing & Exploited Children, before
Permanent Subcommittee on Investigations, at 3 (Nov. 19, 2015). This
71% figure does not include reports to the cyber tipline made by
Backpage itself.
\17\Br. of Commonwealth of Massachusetts, Doe ex rel. Roe v.
Backpage.com, LLC et al., No. 14-13870, Dkt. No. 30, at 7 (D. Mass.
Feb. 20, 2015) (``In Massachusetts, seventy-five percent of the cases
that the Attorney General has prosecuted under our state human
trafficking law, plus a number of additional investigations, involve
advertising on Backpage.'').
\18\Backpage.com, LLC v. McKenna, 881 F. Supp. 2d 1262, 1267 (W.D.
Wash. 2012).
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The National Association of Attorneys General has sounded
similar alarms concerning Backpage's facilitation of sex
trafficking. On August 31, 2011, 45 state attorneys general
sent a letter in which they described Backpage as a ``hub'' of
``human trafficking, especially the trafficking of
minors.''\19\ Pointing to more than 50 cases over the previous
three years involving individuals trafficking or attempting to
traffic minors on Backpage, the attorneys general argued that
Backpage's screening efforts were ``ineffective.''\20\ They
requested documents from Backpage concerning the company's
public claims that it screens and removes advertisements linked
to sex trafficking. Backpage provided no substantive response
to that request.\21\
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\19\Letter from the Nat'l Ass'n of Attorneys General to Samuel
Fifer, Esq., Counsel for Backpage.com, LLC (Aug. 31, 2011), http://
www.ct.gov/ag/lib/ag/press_releases/2011/083111backpageletter.pdf.
\20\Id.
\21\Id.
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C. Victim lawsuits
Backpage has also faced a number of civil lawsuits brought
by trafficking victims. In September 2010, Backpage faced its
first civil lawsuit, brought in the Eastern District of
Missouri by a minor who was sold for sex and advertised on
Backpage by her trafficker.\22\ She alleged that Backpage ``had
a strong suspicion'' that the crimes of facilitating
prostitution, exploitation of children, and child pornography
were being committed on its site ``yet was so indifferent that
it failed to investigate for fear of what it would learn.''\23\
She further alleged that Backpage ``had a desire that [the]
posters would accomplish their nefarious illegal prostitution
activities so that the posters would return to the website and
pay for more posting.''\24\ The plaintiff sought a civil remedy
pursuant to 18 U.S.C. Sec. 2255, which creates a private right
of action for child victims of sexual exploitation. Backpage
persuaded the district court to dismiss the case on the ground
that it was entitled to immunity under Section 230 of the
Communications Decency Act (CDA),\25\ which shields web
publishers from civil liability for content to which they do
not materially contribute.\26\
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\22\Complaint, M.A. ex rel. P.K. v. Village Voice Media Holdings,
LLC, No. 10-cv-01740, Dkt. No. 1, para.9 (E.D. Mo. Sept. 16, 2010).
\23\Id. at para. 12.
\24\Id.
\25\47 U.S.C. Sec. 230.
\26\M.A. ex rel. P.K. v. Village Voice Media Holdings, 809
F.Supp.2d 1041, 1052, 1058 (E.D. Mo. 2011).
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Backpage also faces an ongoing civil suit by minor sex-
trafficking victims in Massachusetts.\27\ Unlike the plaintiff
in the Missouri case, the Massachusetts plaintiffs allege that
Backpage's platform, categories, and filters actually
``assist[ed] in the crafting, placement, and promotion of
illegal advertisements offering plaintiffs for sale.''\28\ But
again, Backpage prevailed. The district court held that
Backpage was immune from civil liability under the CDA.\29\ The
plaintiffs' appeal is pending.
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\27\Doe ex rel. Roe v. Backpage.com, LLC, 2015 WL 2340771 (D. Mass.
Oct. 16, 2014).
\28\Amended Complaint, Doe ex rel. Roe v. Backpage.com, LLC, No.
14-cv-13870, Dkt. No. 9, para.4 (D. Mass. Nov. 6, 2014).
\29\See Doe ex rel. Roe, 2015 WL 2340771, at *7-*11.
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The Supreme Court of Washington State, however, has reached
a contrary conclusion. That court held, in a suit brought by
underage sex-trafficking victims, that Backpage would not be
immune from suit if, as the plaintiffs alleged, Backpage
``helped develop the content of [the offending]
advertisements.''\30\ The Washington plaintiffs allege that
Backpage helped with ad-content creation through its posting
rules, screening process, and content requirements.\31\ The
court held these allegations warrant additional factual
development, explaining that ``[i]t is important to ascertain
whether in fact Backpage designed its posting rules to induce
sex trafficking to determine whether Backpage is subject to
suit under the CDA because `a website helps to develop unlawful
content, and thus falls within the exception to [CDA immunity],
if it contributes materially to the alleged illegality of the
conduct.'''\32\ The Washington case is now entering civil
discovery.
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\30\J.S. v. Village Voice Media Holdings, 2015 WL 5164599, at *2
(Wash. Sup. Ct. Sept. 3, 2015).
\31\Id.
\32\Id. at *3.
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III. DISCUSSION
A. The procedure followed by the committee in issuing the subpoena to
Mr. Ferrer
Under Rule XXV(k)(1) of the Standing Rules of the Senate,
the Committee is a duly authorized Senate committee. Under Rule
7(a) of the Rules of Procedure of the Committee, the
Subcommittee is a duly authorized subcommittee of the
Committee. Therefore, under Rule XXVI(1) of the Standing Rules
of the Senate, both the Committee and the Subcommittee are
authorized ``to require by subpena [sic] or otherwise the
attendance of such witnesses.''
On May 22, 2015, the Subcommittee Chairman and Ranking
Member notified all Subcommittee members by memorandum that the
Subcommittee was investigating ``businesses that directly or
indirectly facilitate criminal sex trafficking conduct,
including trafficking in minors.''\33\ The investigation was
authorized by Senate Resolution 73, Section 12(e), 114th
Congress, which empowers the Subcommittee to investigate ``all
other aspects of crime'' within the United States that affect
the ``national health, welfare, and safety,''\34\ and the
Subcommittee is specifically tasked with examining ``organized
criminal activity which may operate in or otherwise utilize the
facilities of interstate or international commerce.''\35\ Human
trafficking is a Federal crime,\36\ and human trafficking
offenses are predicates to liability under the Racketeer
Influenced Corrupt Organizations (RICO) Act.\37\ The
Subcommittee's authority to investigate crime, its effects on
public welfare and safety, and how the facilities of interstate
commerce are used to commit it places this investigation
squarely within its jurisdiction.\38\
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\33\Memorandum from Sen. Rob Portman & Sen. Claire McCaskill to
Members of Subcommittee Re: Notification of Pending Investigations (May
22, 2015) (on file with Committee staff).
\34\S. Res. 73 Sec. 12(e)(1)(D), 114th Cong.
\35\Id. at Sec. 12(e)(1)(C).
\36\See 18 U.S.C. Sec. Sec. 1581-1592.
\37\See Pub. L. 108-193, 117 Stat. 2875, 2879, Sec. 5(b); 18 U.S.C.
Sec. 1961(1).
\38\The Subcommittee is also authorized to investigate ``the
efficiency and economy of operations of all branches of the
Government.'' S. Res. 73 Sec. 12(e)(1)(A). This provision provides an
additional, independent jurisdictional basis for the present
investigation. Congress funds an array of government agencies and
programs that are engaged in anti-trafficking efforts, and has an
interest in determining whether these programs are operating
efficiently and effectively.
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The Subcommittee's investigation has not been limited to
Backpage. To the contrary, the Subcommittee has been engaged
since April 2015 in a broad investigation of the problem of
human trafficking on the Internet. The Subcommittee has
conducted interviews and briefings with over fifty relevant
parties, including victims' rights groups, nonprofit
organizations, technology companies, financial institutions,
academic researchers, and Federal, state, and local law-
enforcement officials. The Subcommittee has also conducted
interviews with--and received documents from--several websites
in the commercial sex advertising industry that are similar to
Backpage.
The Subcommittee first contacted Backpage on April 15,
2015, to request an interview to discuss Backpage's business
practices. On June 19, 2015, after extensive communication with
Backpage's outside counsel regarding the specific topics that
the Subcommittee wished to discuss, the Subcommittee
interviewed Backpage's General Counsel, Elizabeth McDougall.
During the interview, Ms. McDougall could not answer
several critical questions about Backpage's ownership,
statistics on reporting to law enforcement and to NCMEC, and
the ``moderation'' procedures Backpage uses to review and
screen advertisements. After the interview, on June 22, 2015,
the Subcommittee sent Backpage follow-up questions and requests
for information.\39\ Despite initially indicating that it would
do so, Backpage failed to provide answers or documents.\40\
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\39\Email from Senior Counsel of Subcommittee to Backpage (Jun. 22,
2015) (on file with Committee staff).
\40\Email from Backpage to Subcommittee (July 1, 2015) (on file
with Committee staff).
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On July 7, 2015, after providing the required notice to the
Committee Chairman and Ranking Member, the Subcommittee issued
a duly-authorized subpoena (the July 7 subpoena) to Backpage
requesting documents related to Backpage's basic corporate
structure, the steps it takes to review advertisements for
illegal activity, its interaction with law enforcement, and its
data retention policies, among other relevant subjects.\41\ The
subpoena was returnable August 7, 2015. On August 6, Backpage
informed the Subcommittee by letter that it would not produce
any documents in response to the subpoena.\42\ It contended
that the subpoena violated the First Amendment, on the ground
that Backpage is a publisher of protected speech.
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\41\Subcommittee Subpoena, Oct. 1, 2015 (on file with Committee
staff).
\42\Letter from Backpage to Subcommittee (Aug. 6, 2015) (on file
with Committee staff).
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After carefully considering Backpage's position, the
Subcommittee Chairman and Ranking Member sent a letter to
Backpage explaining that the First Amendment cases on which
Backpage relied were inapposite.\43\ The Subcommittee invited
Backpage to submit further explanation of its position.\44\
Despite committing to do so in a September 14, 2015, meeting
with Subcommittee staff, Backpage never submitted a further
explanation of its refusal to produce documents pursuant to the
July 7 subpoena.
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\43\Letter from Subcommittee to Backpage (Aug. 26, 2015) (on file
with Committee staff).
\44\Id.
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In an attempt to continue its fact-finding, the
Subcommittee issued subpoenas for the depositions of two
Backpage employees on August 13, 2015.\45\ The two employees
retained individual counsel and, invoking their Fifth Amendment
privilege, declined to answer any questions on the ground that
their testimony might tend to incriminate them.\46\ In
addition, Mr. Ferrer declined to be voluntarily interviewed by
Subcommittee staff.
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\45\Subcommittee Subpoena to Backpage Employee A, Aug. 13, 2015 (on
file with Committee staff); Subcommittee Subpoena to Backpage Employee
B, Aug. 13, 2015 (on file with Committee staff).
\46\Letter from counsel for Backpage Employee A and Employee B to
Subcommittee (Sept. 3, 2016) (on file with Committee staff).
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On October 1, 2015, after providing the required notice to
the full Committee Chairman and Ranking Member, the
Subcommittee withdrew its original subpoena and issued a new,
more targeted subpoena directly to Mr. Ferrer.\47\ This
subpoena requested, among other items, documents concerning
Backpage's review of advertisements, commonly referred to
within the company as ``moderation,'' including information
related to editing or modifying ads before publishing. The
subpoena also requested documents concerning metadata, document
retention, basic corporate information, and revenue derived
from adult advertisements. The subpoena required Mr. Ferrer to
produce the documents named in the subpoena schedule by October
23, 2015, or else to appear personally on that date. The
Subcommittee later continued Mr. Ferrer's personal appearance
to November 19, 2015--the date of the Subcommittee's
hearing.\48\
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\47\Letter from Subcommittee to Backpage (Oct. 1, 2015) (on file
with Committee staff): Subcommittee Subpoena, Oct. 1, 2015, (on file
with Committee staff).
\48\Letter from Subcommittee to Mr. Ferrer (Oct. 20, 2015) (on file
with Committee staff).
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B. The extent to which Mr. Ferrer has complied with the subpoena
On the return date of October 23, 2015, Mr. Ferrer produced
twenty-one pages of publicly available documents.\49\ The
company also submitted a letter objecting to the subpoena on
the grounds that it violated the First Amendment and contained
document requests that were not pertinent to a proper
legislative investigation.\50\
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\49\Submission from Backpage to Subcommittee (Oct. 23, 2015) (on
file with Committee staff).
\50\Letter from Backpage to Subcommittee (Oct. 23, 2015) (on file
with Committee staff).
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On November 3, 2015, the Subcommittee overruled Backpage's
objections and ordered and directed Mr. Ferrer to comply with
the subpoena by November 12, 2015.\51\ On November 13,
2015,\52\ Backpage attorneys wrote to the Subcommittee to
explain that the company maintained its First Amendment and
pertinence objections to the subpoena, but as a ``gesture of
good faith,'' it would produce some documents in response to
certain of the subpoena's eight document requests.\53\ The bulk
of Backpage's November 13 production consisted of records that
the company had previously provided to law-enforcement entities
pursuant to subpoena. Based on the nature of that production,
however, and the dearth of documents produced in response to
requests concerning the review of adult advertisements, the
Subcommittee is confident that Backpage is withholding a
substantial volume of responsive documents. Indeed, counsel for
Backpage has acknowledged that the company did not conduct a
complete search for responsive documents.\54\
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\51\Subcommittee Ruling, Nov. 3, 2015 (on file with Committee
staff). In that ruling the Chairman and Ranking Member also continued
Mr. Ferrer's appearance to November 19, 2015. See supra Part III.C.
\52\Despite the order to comply with the subpoena by November 12,
Backpage did not file any response until the following day, November
13. Backpage neither sought an extension of the deadline nor did it
furnish any excuse for its tardy submission.
\53\Letter from Backpage to Subcommittee (Nov. 13, 2015) (on file
with Committee staff).
\54\Letter from Backpage to Subcommittee (Nov. 16, 2015) (on file
with Committee staff).
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Apart from publicly available documents, Mr. Ferrer
produced no more than twenty pages of documents responsive to
the core of the Subcommittee's request--the review and editing
of adult advertisements--embodied in Requests One, Two, and
Three. Importantly, Backpage failed to produce any internal
emails concerning the moderation of ads--the subject of Request
One (``[a]ny documents concerning Backpage's reviewing,
blocking, deleting, editing, or modifying advertisements in
Adult Sections, either by Backpage personnel or by automated
software processes . . .''). As for Request Two, which
concerned Backpage's ``Banned Terms List,'' (i.e., terms not
permitted in adult advertisements), Backpage provided a one-
page list of banned terms, but failed to provide any internal
documents relating to the creation or modification of the list,
as required by the subpoena.\55\ Nor did it provide any
internal emails concerning the blocking or flagging of user
accounts--the subject of Request Three (``[a]ny documents
concerning reviewing, verifying, blocking, deleting, disabling,
or flagging user accounts or user account information,
including but not limited to the verification of name, age,
phone number, payment information, email address, photo, and IP
address.'').
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\55\Backpage also produced twenty pages of publicly available
``error messages'' in response to Request Two.
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With respect to Request Five, which covers documents
relating to image hashing, metadata, and data retention,\56\
Backpage produced no documents, claiming that it did not
maintain formal data retention policies and was ``unaware of
non-privileged documents responsive to the remainder of the
request[.]'' Backpage failed to articulate the type of
privilege to which it was referring; it also failed to provide
a log of privileged items that it was withholding, as the
subpoena requires.
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\56\Subcommittee staff has learned that image hashing and the
collection of metadata are important anti-trafficking tools available
for reviewing commercial sex advertisements. ``Hashing'' gives photos a
unique fingerprint that enables one to search for identical photos in
other places, including on different web pages. Similarly, the
``metadata'' contained in electronic files is another important law-
enforcement tool. A file's ``metadata'' may include author, date and
time created, date modified, and file size. Image metadata may also
include geographic coordinates for location at the time the image was
created.
---------------------------------------------------------------------------
The company's response to the rest of the subpoena was
similarly inadequate, as it produced incomplete information in
response to Requests Six and Seven relating to advertising
volume and reporting, and no documents at all in response to
Request Eight concerning financial information.\57\
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\57\By letter dated November 13, 2015, Backpage produced incomplete
statistics with respect to subparts (a) and (b) of Request Six, and
failed to address subpart (c) concerning the number of adult
advertisements directly reported to law enforcement. Instead, Backpage
provided statistics concerning the company's reporting to the National
Center for Missing and Exploited Children. As for Request Seven, the
company produced no statistics in response to subpart (a), and
incomplete statistics in response to subparts (b) and (c).
---------------------------------------------------------------------------
While Backpage produced virtually no non-public documents
concerning moderation, which is the core of the Subcommittee's
request, it did make a production of law-enforcement related
documents that are of marginal value to the Subcommittee. That
production consisted of 16,838 pages of documents, more than
16,000 of which, or some 96 percent, constituted the entire
production of Backpage's responses to law-enforcement
subpoenas. Just one file produced in this category contained
more than 750 pages of documents--including hundreds of pages
of ads and photos from 2013 and 2014--responsive to a single
government subpoena requesting information relevant to one
Backpage user. Although Backpage explained that it believed
this material was responsive to Request Four and that the
company had ``five million'' additional pages of this material
to produce, Subcommittee staff informed Backpage it had no need
for that submission. Backpage also produced an additional 350
pages of emails from law enforcement officials thanking
Backpage employees for responding to police inquiries.
Accordingly, Backpage's production cannot properly be
described as a ``gesture of good faith,'' as the company
claimed in its November 13 letter. For example, Backpage
produced eight pages of email correspondence with a third-party
consultant who voiced concern about potentially underage
children advertised for sex on Backpage.com. Despite producing
these emails exchanged with a third party, Backpage failed to
produce any internal emails about the same or similar
subjects--that is, the company's efforts to combat the problem
of human trafficking on its site. As the Subcommittee's
November 19, 2015, report\58\ demonstrates, many such emails
have been exchanged between Backpage employees during the time
period covered by the subpoena. Indeed, by the company's own
admission,\59\ a significant majority of Backpage employees are
engaged in the review of adult advertisements; it is therefore
highly likely that the company has more than twenty internal
pages relevant to the review of adult advertisements.
---------------------------------------------------------------------------
\58\Subcommittee Report, Recommendation to Enforce a Subpoena
Issued to the CEO of Backpage.com, LLC, (Nov. 19, 2015), available at
http://www.hsgac.senate.gov/subcommittees/investigations/hearings/
human-trafficking-investigation.
\59\In a June 19, 2015 interview with Backpage General Counsel
Elizabeth McDougall, she explained that 120 of 180 total employees
worked in Backpage's ``moderation'' section. It is unclear how many
employees are still engaged in the review of adult advertisements.
---------------------------------------------------------------------------
Not only has Backpage failed to produce responsive
documents, but it has also failed to describe them in a
privilege log that would enable the Subcommittee to assess
individualized objections to producing them. A privilege log is
required by the subpoena's terms, and the failure to produce
one despite the Subcommittee's repeated requests is further
evidence of the company's default.\60\ In addition, by
Backpage's own admission, it did not conduct a ``complete
search'' of its records for responsive documents, claiming that
to be required to do so would be ``constitutionally
inappropriate.''\61\ Indeed, Backpage counsel was unable to
tell the Subcommittee which data sources or custodian email
accounts, if any, the company searched for responsive
documents. By all indications, Backpage produced a self-
selected subset of documents to support a pretense of
cooperation, and nothing more.
---------------------------------------------------------------------------
\60\See Subcommittee Subpoena, Oct. 1, 2015 (on file with Committee
staff); see also Letter from Subcommittee to Backpage (Aug. 26, 2015)
(on file with Committee staff); Letter from Subcommittee to Backpage
(Aug. 28, 2015) (on file with Committee staff).
\61\See Part III.C.
---------------------------------------------------------------------------
In addition to Mr. Ferrer's failure to produce documents
responsive to the Subcommittee's subpoena, he also defaulted on
his obligation to appear personally before the Subcommittee at
the November 19, 2015, hearing. On November 16, 2015--three
days before the hearing--Backpage attorneys informed the
Subcommittee that Mr. Ferrer would decline to answer questions
based on a First Amendment objection and his Fifth Amendment
privilege against self-incrimination.\62\ In the same letter,
Backpage requested that the Subcommittee waive Mr. Ferrer's
personal appearance. The Subcommittee promptly rejected the
request.\63\
---------------------------------------------------------------------------
\62\Letter from Backpage to Subcommittee (Nov. 16, 2015) (on file
with Committee staff).
\63\Email from Chief Counsel of Subcommittee to Backpage (Nov. 16,
2015) (on file with Committee staff).
---------------------------------------------------------------------------
On November 18, 2015, the day before the hearing, counsel
for Backpage informed the Subcommittee that Mr. Ferrer was out
of the country on ``important international business travel''
and would therefore not appear.\64\ Mr. Ferrer subsequently
failed to appear before the Subcommittee at the November 19,
2015, hearing.
---------------------------------------------------------------------------
\64\Letter from Backpage to Subcommittee (Nov. 18, 2015) (on file
with Committee staff).
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C. Objections to the subpoena
Throughout the Subcommittee's dealings with Mr. Ferrer and
Backpage, the company has argued that most of the document
requests in the subpoena were impermissible under the First
Amendment. In particular, Backpage objected that ``First
Amendment tensions'' inherent in requesting information from a
``publisher'' counseled in favor of reading the Subcommittee's
authorizing resolution not to encompass the power to issue the
October 1 subpoena.\65\
---------------------------------------------------------------------------
\65\Letter from Backpage to Subcommittee (Oct. 23, 2015) (on file
with Committee staff).
---------------------------------------------------------------------------
In its objections, Backpage relied principally on cases in
which courts have invalidated investigative demands for
information about disfavored political dissenters--for example,
Alabama seeking the identities of NAACP members in the
1950s,\66\ or a House committee trying to discover who is
reading ``books of a particular political
tendentiousness.''\67\ Although Backpage asserted that several
items in the subpoena violate the First Amendment, it did not
attempt to show either (i) that any request for documents
sought information that infringed recognized First Amendment
rights; or (ii) that any such request was not supported by an
adequate legislative interest--as required to sustain a First
Amendment objection in this context.\68\
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\66\NAACP v. Alabama, 357 U.S. 449 (1958)
\67\United States v. Rumely, 345 U.S. 41, 42 (1953).
\68\See NAACP, 357 U.S. at 463.
---------------------------------------------------------------------------
After carefully considering the proffered objections, the
Chairman and Ranking Member overruled them in a detailed ruling
dated November 3, 2015.\69\ Unlike the cases cited by Backpage,
in which investigative demands were used to further the
official suppression of ideas, the Subcommittee's subpoena
infringed no First Amendment rights. And unlike the demands for
membership lists 60 years ago, the October 1 subpoena
proactively instructed Backpage to redact any personally
identifying information of its users. Finally, the mere fact
that Backpage is a publisher of commercial speech does not
immunize it from legitimate investigations into the
unprotected, unlawful activity that undisputedly also occurs on
its facilities.\70\
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\69\Subcommittee Ruling, Nov. 3, 2015 (on file with Committee
staff).
\70\Cf. Arcara v. Cloud Books, Inc, 478 U.S. 697, 707 (1986)
(``[T]he First Amendment is not implicated by the enforcement of a
public health regulation of general application against the physical
premises in which respondents happen to sell books.'').
---------------------------------------------------------------------------
The Chairman and Ranking Member also overruled Backpage's
jurisdictional objection, finding that the investigation fit
squarely within the Subcommittee's authorizing resolution.\71\
As noted above, the Subcommittee is authorized to investigate
``all other aspects of crime'' within the United States that
affect the ``national health, welfare, and safety,''\72\ as
well as ``organized criminal activity which may operate in or
otherwise utilize the facilities of interstate or international
commerce.''\73\ Human trafficking is a federal crime.\74\
Importantly, Congress has specifically recognized human
trafficking as an activity of organized crime; the Trafficking
Victims Protection Reauthorization Act of 2003 declared that
human trafficking offenses are predicates to liability under
RICO.\75\ And the Internet, an important facility of interstate
commerce, has become an increasingly central marketplace for
human trafficking in the United States.\76\ The Subcommittee is
therefore empowered to investigate how individuals utilize the
Internet, including commercial sex advertising websites like
Backpage.com, to further their illicit trafficking schemes, as
well as examine the mechanisms websites can use to prevent such
abuse of interstate facilities.
---------------------------------------------------------------------------
\71\Subcommittee Ruling at 7-10, Nov. 3, 2015 (on file with
Committee staff).
\72\S. Res. 73 Sec. 12(e)(1)(D), 114th Cong.
\73\Id. at Sec. 12(e)(1)(C).
\74\See 18 U.S.C. Sec. Sec. 1581-1592.
\75\See 18 U.S.C. Sec. 1961(1).
\76\See generally Mark Latonero, supra n.13.
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The Chairman and Ranking Member further rejected Backpage's
entirely unexplained contention that the document requests in
the October 1 subpoena were not pertinent to a proper
investigation.\77\ The Subcommittee's ruling articulated
clearly why each request relates to its efforts to understand
online sex trafficking, what companies like Backpage can do to
prevent it (and may be doing to facilitate it), and what
further steps the government might take to combat it. Having
considered and rejected Backpage's objections as unfounded, the
Chairman and Ranking Member ordered and directed Mr. Ferrer to
comply with the subpoena by November 12, 2015.\78\
---------------------------------------------------------------------------
\77\Subcommittee Ruling at 15-18, Nov. 3, 2015 (on file with
Committee staff).
\78\Id. at 19.
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Despite the ruling dismissing his objections, Mr. Ferrer
has continued to defy the Subcommittee's lawful process. After
Mr. Ferrer's failure to appear on November 19, 2015, Backpage
attorneys wrote in a November 24, 2015, letter that it was
standing by its First Amendment, overbreadth, and pertinence
objections to the subpoena.\79\ The company's lawyers had
previously stated that the company's submissions of information
did not ``constitute either the fruits of a complete search of
every bit of data possessed by Backpage.com or by all of its
employees over the full (nearly six year) time period covered
by the Subpoena.''\80\ Instead, Backpage took the position that
even ``to be required to conduct such a search and review''
would be ``constitutionally inappropriate.''\81\ Backpage
encouraged the Subcommittee to ``present[] this issue to the
courts for resolution'' by invoking the statutory mechanism for
civil enforcement of Senate subpoenas.\82\ The Subcommittee,
through the present report prepared pursuant to Sec. 288d, is
taking the necessary action to enable Senate Legal Counsel to
file such an action.
---------------------------------------------------------------------------
\79\Letter from Backpage to Subcommittee (Nov. 24, 2015) (on file
with Committee staff).
\80\Letter from Backpage to Subcommittee (Nov. 16, 2015) (on file
with Committee staff).
\81\Id.
\82\Id.
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In an attempt to focus on information of highest priority,
the Subcommittee is only seeking to enforce Requests One, Two,
and Three of the subpoena. The Subcommittee has obtained
sufficient information responsive to the remaining requests--
Four, Five, Six, Seven, and Eight--from either third-party
sources or Backpage itself.
By contrast, Requests One, Two, and Three, concern the
moderation practices at the core of the Subcommittee's inquiry,
as evidenced by the Staff Report that examined Backpage's
screening and editing practices using information obtained from
third parties.\83\ By Backpage's own admission, the screening
of adult advertisements is a key function of its business. And
the Subcommittee has information, in the form of emails from
third parties, indicating that Backpage possesses significant
records responsive to these requests. Nevertheless, Mr. Ferrer
has withheld those records based on a vague and undeveloped
First Amendment claim. The Subcommittee therefore seeks
authorization to obtain from the district court an order
directing Mr. Ferrer's compliance with the Subcommittee's
October 1, 2015, subpoena.
---------------------------------------------------------------------------
\83\Subcommittee Report, Recommendation to Enforce a Subpoena
Issued to the CEO of Backpage.com, LLC, (Nov. 19, 2015), available at
http://www.hsgac.senate.gov/subcommittees/investigations/hearings/
human-trafficking-investigation.
---------------------------------------------------------------------------
D. Comparative effectiveness of a civil action or invoking inherent
contempt
The Subcommittee has considered the effectiveness of a
civil action to enforce the Subcommittee's subpoena compared to
an immediate referral to the United States Department of
Justice for criminal prosecution. Although the Subcommittee
continues to consider whether to refer Mr. Ferrer's failure to
comply with the subpoena and failure to appear at the November
19 hearing for criminal prosecution, the Subcommittee has
concluded that a civil action is the most effective and
expeditious means to enforce the subpoena.
In a civil action under 28 U.S.C. Sec. 1365, the
Subcommittee would apply to the United States District Court
for the District of Columbia for an order requiring Mr. Ferrer
to produce the subpoenaed documents. If the district court
determines that Mr. Ferrer has no valid reason to refuse, the
court would direct him to produce the subpoenaed documents.
Disobedience of that order would subject Mr. Ferrer to
sanctions to induce compliance. Mr. Ferrer could free himself
of sanctions by producing the subpoenaed documents.
In a criminal referral under 2 U.S.C. Sec. Sec. 192-194,
the Senate would direct the president pro tempore to certify to
the U.S. Attorney for the District of Columbia the facts
concerning the witness's refusal to produce the subpoenaed
documents. If convicted, the witness could receive a sentence
of up to one year in prison and a $100,000 fine.
The Subcommittee and Committee recommend that the Senate
proceed at this time with a civil action to enforce the
Subcommittee's subpoena to Mr. Ferrer. The Subcommittee has a
continuing interest in obtaining the subpoenaed documents as
part of its ongoing investigation into sex trafficking. That
goal is best advanced by the civil remedy--an order to
produce--rather than the purely punitive remedies available
through criminal prosecution. In addition, the Subcommittee
believes a civil enforcement action will be more expeditious.
The Subcommittee has an interest in speedy adjudication of Mr.
Ferrer's legal obligations so that it may proceed with its
investigation and potential future hearings or reports in the
current Congress. Such fact-finding is urgently needed for
potential legislation in this important area. The Subcommittee
notes, however, that its recommendation to pursue a civil
enforcement action at this time does not preclude a later
determination to refer the matter to the Department of Justice
for criminal prosecution of Mr. Ferrer for contempt of
Congress.
IV. LEGISLATIVE HISTORY
The Committee considered the original resolution at a
business meeting on February 10, 2016. With a majority of the
Members of the Committee present, constituting a quorum under
Committee Rules for the purpose of reporting measures, matters
or recommendations, the Committee ordered the original
resolution reported favorably by a roll call vote of 15 in
favor and none opposed. Members voting in the affirmative were:
Ron Johnson (R-WI), John McCain (R-AZ), Rob Portman (R-OH),
Rand Paul (R-KY), James Lankford (R-OK), Kelly Ayotte (R-NH),
Joni Ernst (R-IA), Ben Sasse (R-NE), Thomas R. Carper (D-DE),
Claire McCaskill (D-MO), Jon Tester (D-MT), Tammy Baldwin (D-
WI), Heidi Heitkamp (D-ND), Cory A. Booker (D-NJ), and Gary C.
Peters (D-MI). For the record only, Senator Michael B. Enzi (R-
WY) voted ``aye'' by proxy. There were no votes cast in the
negative.
[all]