Goldman Sachs’ Investment Supports Sex Trafficking
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UPDATED: Apr 2, 2012
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There’s a website called Backpage.com that, at first glance, looks like a Craigslist wannabe. Its homepage is a hub, listing states and localities that an individual can select in order to hone their search on a specific location. Then beyond that hub is another that contains all of the usual categories: automotive, jobs, rentals, real estate, buy and sell, and even a forum for other “backpagers” to discuss their interests.
But then there’s another category that few would expect to see on a site devoted to “legal” classified ads: adult.
If Backpage’s adult section was looking to bring two people together in romance like the countless other dating websites out there, then there’d hardly be a problem. But it’s the “adult” section’s subpages that raise concern: escorts, body rubs, strippers and strip clubs, dom and fetish, ts, male escorts, and adult jobs.
Through this adult section, Backpage has allegedly turned itself into the largest online sex trafficking forum in the United States, according to Nicholas D. Kristof, an op-ed columnist for the New York Times.
Like the back alley of a city where illegal activity takes place, Backpage is one of the disgusting corners of the internet that allows the lowest of the low to operate their illegal trafficking of underage sex slaves.
The only thing more astonishing than that is who owns it.
The Bad Keep Getting Worse
What is one of the most hated companies in the United States today?
To give a hint, this company is partly responsible for the mortgage loan crisis and the entire economic meltdown the country experienced in 2008. It’s been targeted by investigative journalists for years, and, try as it might, it simply cannot stay out of the media’s spotlight, as even its own are leaving the company in a very public fashion.
That’s right: the partial owner of Backpage is none other than the mortgage loan giant, Goldman Sachs.
“Goldman Sachs was mortified when I began inquiring last week about its stake in America’s leading Web site for prostitution ads,” said Kristof, the journalist responsible for investigating and exposing the mortgage loan brokerage’s role as a financier of sex trafficking.
Kristof found that Goldman Sachs owned 16 percent of Backpage, making it a significant stake holder in the company.
Goldman earned billions by first targeting our economy, selling worthless mortgage loans to the unsuspecting. Now this company, which has gained notoriety for its subprime mortgage loan business, has been found to be investing in a company that allows the marketing of defenseless women and children.
‘A Nightmarish Ordeal’
“Pimps are turning to the Internet,” Lauren Hersh, a prosecutor in Brooklyn, told Kristof. “Backpage is a great vehicle for pimps trying to sell girls.”
In the recent case involving an underage girl sold on Backpage, prosecutors are accusing six individuals of using the website as a vessel for selling a 15-year-old-girl for sex.
“This is a horrific case in which the victim, a young girl, is alleged to have survived a nightmarish ordeal that included being drugged, gang raped and forced to work as a prostitute,” said Queens District Attorney Richard A. Brown in a press release.
According to the release, the six defendants being prosecuted, Gary Council, Andrea Furlonge, Junior C. Goldring, Omari A. Millington, Renardo Williams, and Roy McMillan, all ranging from 21 to 24 years of age, kidnapped, drugged, bound, and gang raped the teenage girl. They then took nude photos of her and posted them on Backpage.
The 15-year-old was then forced to have intercourse and oral sex with numerous men in exchange for money, which was collected by her six captors.
The six “pimps” are facing sentences ranging from up to 15 years to life sentences.
But as horrific as this case is, it’s not an isolated incident.
Hersh said she and her team have prosecuted over 32 people over the last year and a half who have trafficked victims on Backpage.
In fact, Backpage has 70 percent of the market for prostitution ads, according to the trade organization, AIM Group. The website makes over $22 million a year on their advertisements, a number that amounts to millions for the mortgage loan broker, Goldman.
We’re not Muppets, Goldman
“We had no influence over operations,” said Andrea Raphael, a Goldman Sachs spokeswoman, to Kristof.
While the mortgage loan giant’s stake in Backpage is small when compared to its other investments, the fact that a Wall Street business’s money has been used to support the sex trade is sickening.
Scott L. Lebovitz, a former managing director at Goldman, sat on the board for Village Voice Media, the company that owns Backpage. He retained that board position for four years before stepping down in 2010, according to Kristof.
When an internet user can stumble upon Backpage and quickly see what the sub categories in the directory’s adult section are, it’s hardly believable that the mortgage loan brokerage’s managing director was unaware of the “services” offered on Backpage.
That being said, Kristof does make the disclaimer that there’s no reason for him to believe Goldman’s top executives knew of their company’s connection to sex trafficking. However, even if Goldman’s Village Voice Media board member was unaware of the services offered on the site, and even if lower-level Goldman executives responsible for monitoring their investment were blind to the adult column that dominates the right hand side of Backpage’s area-specific homepages, then they should have at least caught Kristof’s news stories that were very blatantly calling their investment out by name.
This is a type of greed is unlike anything we’ve seen on Wall Street, and unlike anything most of us would have expected. Stealing money through the packaging of volatile and concealed mortgage loans is one thing, but leeching it from the sexual services of underage girls is another.
One frightening observation about Goldman’s response to this investment is that they didn’t deny their knowledge of the trafficking services, only that they didn’t influence them.
Owning 16 percent of a sex trafficking site is plenty enough influence.
This investment shows Goldman side stepping from their mortgage loan business and making a few extra bucks from an investment that trafficks underage teenagers. If we truly believe nobody in this mortgage loan brokerage knew about Backpage’s adult section, then we’d live up to Goldman’s infamous description of “Muppets.”