LACEY AND LARKIN were heroes to many—micks from the sticks who made a fortune thumbing their shanty-Irish snouts at authority. Their papers went after mayors and police chiefs, governors and senators, Walmart and the Church of Scientology. They provoked outrage with their business practices too, by setting up Backpage.com, a kind of red-light district for the internet. As attorney Don Moon, the pair’s longtime adviser, puts it: “Their brand was always ‘Fuck you. We don’t have friends. We have lawyers.’ ” That approach served them well for 45 years, right up until the morning Michael Lacey found himself staring into the barrel of a Glock.
A few minutes before 9 am on April 6, 2018, a fleet of unmarked vehicles with government plates rolled up in front of Lacey’s multimillion-dollar compound in Paradise Valley, a few miles outside of Phoenix. These weren’t the guests he’d been expecting. The 69-year-old divorced father of two had recently gotten remarried, and he was preparing to host a lavish party to celebrate his vows. Tents were pitched on his lawn; retired journalists and overworked lawyers were winging their way into town. FBI agents informed the groom that he was being arrested on charges of money laundering and facilitating prostitution. They cuffed him, then subdued the home’s other occupants, including Lacey’s 76-year-old mother-in-law, whom they ordered out of the shower at gunpoint.
For the next six hours, the lawmen tossed the compound looking for, among other things, “evidence of wealth.” They seized art, cash, computers, even the bride’s wedding ring. Meanwhile, at the Phoenix airport, federal marshals awaited a 747 inbound from London. When it touched down, the flight crew made an announcement: Police would be boarding, so passengers must stay put. “I wondered who they were there for,” recalls Larkin, then 68, who was seated beside his son in business class. “I quickly figured out it was me.” (The Department of Justice declined to comment on the arrests.)
Partygoers soon received a cryptic text message. Owing to “unforeseen circumstances,” it said, the wedding celebration had been “postponed.” A notice went up on Backpage, explaining that the website had been seized “as part of an enforcement action.” More than a few guests completed the journey to Phoenix anyway; reporters can’t resist a story, and Lacey had already paid for a block of rooms at the Hotel Camby. They gathered at various local watering holes, offering what one attendee describes as “toasts to the accused,” and pieced together a gripping narrative—a tale of free-speech crusaders crossed over to the dark side, dedicated newshounds become digital pimps.
Backpage, the domain that brought the federal government down on Lacey and Larkin’s heads, wasn’t much to look at—a bare-bones interface wrapped in Facebooky blue, similar to Craigslist in both form and function. Its name alluded to the old days of print publishing, when classified ads, especially ads for topless bars, escort services, and other sexually oriented businesses filled the final pages of alt-weeklies and provided much of their revenue. Visitors to the site were greeted with several columns of links, which directed them to listings for various metropolitan areas around the country. From there, they could reply to ads or write their own.
As in the print days, these adult ads reigned supreme. In 2011 they accounted for 15 percent of Backpage’s listings but generated more than 90 percent of its revenue. By the time the Feds pulled the plug on the site, it was operating in 97 countries and was valued at more than half a billion dollars. People called it the Google of commercial sex ads, a platform that dominated its market as thoroughly as Facebook dominated social networking or Amazon did online retail.
The government indictment that triggered Lacey and Larkin’s arrests, United States v. Lacey, et al., includes 17 “victim summaries”—stories of women who say they were sexually exploited through Backpage. Victim 5 first appeared in an ad on the platform when she was 14; her “customers” made her “perform sexual acts at gunpoint, choked her to the point of having seizures, and gang-raped her.” Victim 6 was stabbed to death. Victim 8’s uncle and his friends advertised her as “fetish friendly.” The indictment accuses Backpage of catering to sexual predators, of essentially helping pimps better reach their target audiences.
In the years before their arrest, Lacey and Larkin had successfully beat back charges like these in court. They took refuge not only in the First Amendment but also in Section 230 of the Communications Decency Act, Congress’ great gift to the internet. Passed in 1996, Section 230 largely immunized online platforms from liability for the user-generated content they hosted. They were free to police offending material as they saw fit, without undue fear of prosecution by state or local authorities—as long as they didn’t create it themselves. America’s tech behemoths, from Twitter to Facebook, have often invoked Section 230 in court. The internet we have today wouldn’t exist without it. After all, you can’t build or sustain a giant network if you’re getting sued every time a user says or does something objectionable.
For a while, Lacey and Larkin’s strategy had worked: They’d won case after case, with the support of Big Tech and civil libertarians alike. But by the time the Feds descended on Paradise Valley that morning in the spring of 2018, the tide had turned. Many of their friends and allies had fled, spooked in part by too much bad press. The tech industry, which faced withering scrutiny over its role in the outcome of the 2016 presidential election, had thrown them under the bus. Their top lieutenant had flipped. And Congress had used them as an excuse to finally accomplish what it had been trying to do for more than 20 years—tear a hole in Section 230.
Both men are out on million-dollar bonds, secured by real estate the government eventually hopes to own. The bulk of the charges against them fall under the Travel Act, a law designed by Robert F. Kennedy’s Justice Department to target organized crime. According to the indictment, Lacey, Larkin, and their underlings not only turned a blind eye to prostitution and child sexual abuse but, driven by greed, actively worked to abet it. Their case is set for January 2020. “El Chapo got to trial quicker,” Lacey quips.
I’ve worked for both sides in this showdown. In the late 1990s, I was a staff writer for the Dallas Observer, a weekly owned by Lacey and Larkin. Then, in 2001, I went to work for the Department of Justice as an assistant US attorney in Plano, Texas.
The two men have lived large, and it shows. Larkin is a burly former football player, 6 ’ 2 ” and easily 250 pounds, with cornflower eyes, chubby cheeks, and a ruddy complexion. Lacey’s mug reveals decades of sun and single-malt Scotch—the hooded lids, the sagging chin, the lines running like canyons down his face and into his neck. His spiky hair has thinned and grayed, but he still has the prominent schnoz, the ice-blue eyes, and the knuckles famously tattooed with hold fast. (His father, who served in the Navy during World War II, had the same slogan inked across his fists.)
Their situation looks bleak. The government has seized all of Lacey’s financial accounts and most or all of Larkin’s. Prosecutors have already produced more than 10 million documents and have promised, or threatened, more to come. It will cost the defendants several million dollars just to buy the software they need to search the government’s files. For the time being, though, they’re still drinking well. When I arrive, Larkin has uncorked a bottle of Jack Quinn, a cabernet produced at his 3-acre vineyard in Napa. (Although Larkin has owned the place since before Backpage existed, the government has given notice that it intends to seize the vineyard, alleging that he used Backpage-derived funds for its maintenance.) Lacey, meanwhile, is still knocking back Macallan 21—although nowadays he stops to ask the price. At the Blue Hound bar in Phoenix, where we repaired for a later interview, it’s $120 per shot.
Lacey got his start in journalism in 1970, in the wake of the Kent State shootings, when he and a group of antiwar comrades at Arizona State University founded what would become the Phoenix New Times. In the beginning, he claims, he sold his blood to pay the bills. He met Larkin two years later—not long after Lacey’s father, the union enforcer, and his mother, an opera singer and registered nurse, were found frozen to death in a rented trailer in Oswego, New York. (“It was a murder-suicide,” Lacey says. “They were drunk, and she turned on the gas.”)
The men connected immediately. Both were college dropouts, and both had suffered through difficult childhoods. Larkin’s mother died when he was 2, and he spent most of his youth in what he describes as a “Catholic ghetto.” In high school, he cofounded a student newspaper, The Big Press, then promptly got himself suspended for criticizing administrators. “I wanted to be in that business,” he says. Lacey brought him on as publisher.
In 1977, Lacey and Larkin staged a putsch. They wrested control of the New Times from Lacey’s cofounders and set about turning the fledgling broadsheet into an empire. Larkin worked out a lucrative revenue model, emphasizing classifieds and personals. (While a page of big retail ads might net $1,000, a page of classifieds, 100 ads at $25 a pop, could bring in $2,500.) Six years later, they began to expand. They bought up struggling weeklies in cities across the country—Denver, Houston, Miami—and transformed them into serious news organizations, hiring experienced, high-profile reporters and giving them resources to do the job.
“I didn’t get into this racket to be told what to publish,” Lacey growls. “By anybody.”
They believed there was an audience for in-depth, long-form investigative reporting. A month after 9/11, for instance, The New Times Broward-Palm Beach published an exposé on how lapses in federal immigration policy had allowed the hijackers to enter the country. In 2003, Westword got the scoop on a sexual assault scandal at the US Air Force Academy. In 2013, The Miami New Times ran a story on the steroid scandal in Major League Baseball, which ultimately resulted in the suspension of 14 players. Lacey once told an interviewer, “As a journalist, if you don’t get up in the morning and say ‘Fuck you’ to someone, why even do it?”
They tangled with shareholders, authorities, competitors, printers, and municipalities that tried to restrict their distribution. Lacey, who wrote numerous stories himself, was known to clock reporters and pummel press aides, usually when spirits were involved. (He estimates that he’s been arrested “10 or 11 times,” but “only three for writing.” The one criminal conviction on his record is for a misdemeanor DUI.) When violence didn’t settle things, Lacey and Larkin often moved matters to the courtroom. Litigation was their idea of fun, the continuation of hell-raising by other means. “I didn’t get into this racket to be told what to publish,” Lacey growls. “By anybody. If you don’t like it, don’t read it.”
Steve Suskin, their former in-house counsel, says they and their companies were sued 56 times between 1997 and 2012 alone. “We won them all,” Suskin recalls. They were successful in part because they recognized that litigation is a war of attrition, and they were willing to go the distance. Says Lacey: “You want to sue us, bring your lunch pail, ’cause we gonna be awhile.” In their most famous legal set-to, they successfully sued Joe Arpaio, Maricopa County’s notoriously anti-immigrant sheriff, for false arrest, winning a $3.75 million settlement. In a final flip of the bird to Arpaio, they used the money to set up a nonprofit to defend the rights of undocumented immigrants and Latinx Americans.
Through it all, Larkin kept the money coming in, embracing each new fad in classified advertising. In 1989, for example, the New Times group launched its first adult section, appropriately dubbed Wildside. (The ads were moderated by sales staff to ensure no blatant sex-for-money propositions made it into print.) Racy ads fueled the company’s explosive growth; by 2001, Lacey and Larkin owned 11 papers, which raked in more than $100 million a year. But the good times didn’t last. Craigslist had begun expanding into cities outside the Bay Area, offering free ads in all categories except jobs and erotic services. Classified revenue tanked.
In 2003, Larkin was approached by Carl Ferrer, an ad salesman he’d hired away from a small paper in Louisiana and installed as classified ad director at the Dallas Observer. Ferrer, a short, slight man with a goatee and a perpetually worried look, proposed that they create an in-house version of Craigslist. Larkin put him in charge of building and running the website, which launched in 2004.
The following year, Lacey and Larkin won the prize they’d chased for years—The Village Voice, the grande dame of alt-weeklies. When the New Times group merged with Village Voice Media, the two companies formed a 17-paper megachain valued at about $400 million, with an estimated $180 million in annual revenue. Lacey and Larkin’s timing could not have been worse. Between 2006 and 2012, according to the Pew Research Center, American newspapers lost half their advertising revenue. Backpage, however, grew steadily, even if it wasn’t nearly enough to offset the papers’ declining receipts.
Lacey and Larkin say they were advised by counsel that what Backpage was doing was 100 percent legal. They saw no distinction between advertising and editorial; it was all protected speech, all mission-critical. In 2008, they were honored by the Arizona chapter of the ACLU as Civil Libertarians of the Year. In his acceptance speech, Lacey decried “the gentrified instincts of soccer moms,” which led demagogues like Joe Arpaio to crack down on press freedom. He vowed that both he and Larkin would continue to oppose the “forces of offended decency” wherever they found them.
Today, they remain defiant. “I didn’t do anything wrong,” Lacey declares. “I didn’t do what they say. And if they think they’re gonna punk me, they got the wrong fucking guy.”
Although Exon repeatedly described the legislation as “narrow” and “streamlined,” the Department of Justice warned that its indecency provisions were unconstitutionally broad. Within a year and a half of the CDA’s passage, the Supreme Court agreed and struck those provisions down. Section 230, however, survived, offering a safe harbor to some of the same sites that Exon had hoped to bring down. The information superhighway began to look more perilous than ever.
In 2001 two academics at the University of Pennsylvania published a widely cited study in which they estimated that some 326,000 children were “at risk of commercial sexual exploitation.” Although the authors didn’t formally address what role the internet played, they asserted that “online sexual victimization of American children appears to have reached epidemic proportions.” By 2008, a new coalition of would-be regulators had emerged, led by the National Association of Attorneys General and the National Center for Missing and Exploited Children, a nonprofit partly funded by the US government. Together, both behind the scenes and in the press, the two groups began pushing some of the internet’s major players to strengthen their safety protocols.
In response, Myspace, the web’s largest social media platform at the time, gave the boot to some 90,000 convicted sex offenders. Facebook, meanwhile, took steps to prevent underage users from sharing personal information with strangers. Craigslist started requiring that anyone who posted an ad in its Erotic Services section provide a verified phone number and pay a fee by credit card. It also hired attorneys to moderate ads.
For some officials, though, these changes weren’t enough. In early 2009, Thomas Dart, the sheriff of Cook County, Illinois, sued Craigslist for facilitating prostitution. “Missing children, runaways, abused women, and women trafficked in from foreign countries are routinely forced to have sex with strangers because they’re being pimped on Craigslist,” he said. “I could make arrests off Craigslist 24 hours a day, but to what end? I’m trying to go up the ladder.” That same spring, tabloids across the country were awash in headlines about the “Craigslist killer,” a young man in Boston who’d responded to a massage ad on the site, then murdered the woman who posted it.
A federal judge in Chicago quickly tossed Dart’s case, citing Section 230. But Craigslist eventually surrendered anyway. On the night of September 3, 2010, it quietly covered its Adult Services section with the word censored. Two weeks later, in testimony before Congress, Craigslist execs explained that they’d done their best to address their critics’ complaints; now, it seemed, they just wanted out of the headlines. They also warned that law enforcement was losing a valuable partner in the fight against trafficking. Yet Ernie Allen, the lanky Kentuckian who ran the National Center for Missing and Exploited Children, saw this as a necessary step. “Some of this problem will migrate to other areas,” he said, “but frankly that’s progress.”
Allen’s prediction was right. In the wake of Craigslist’s capitulation, the sex trade did indeed shift to other sites. There were many to choose from—myRedBook, Naughty Reviews, Cityvibe, Rentboy—but Backpage was the chief beneficiary. Larkin sent around an email advising his employees to expect “a deluge” of adult ads and reminding them that, “like it or not,” such ads “are in our DNA.” Lacey says he remained focused, as always, on the editorial side—though he had “no problem” seeing the ads “take off like they did.” Ferrer, meanwhile, seemed only too happy to inherit Craigslist’s share of the adult market, even if that meant assuming its place in the crosshairs. “It is an opportunity for us,” he wrote in an email. “Also a time when we need to make sure our content is not illegal.”
Backpage was already getting into hot water. A girl in Missouri had sued the site in mid-September, alleging that she’d been pimped out at the age of 14 and that Backpage had willfully “failed to investigate for fear of what it would learn.” She claimed, without clear evidence, that the site’s operators “had a strong suspicion” she was underage. Ultimately, a federal magistrate dismissed her case. The situation was tragic, he said, but Backpage was protected under Section 230. The girl needed to sue her pimp.
On October 18, Backpage announced on its blog that it had retained Hemanshu Nigam, a former federal prosecutor who specialized in sex crimes and child abuse, to develop a “holistic” safety program. Nigam sat on the board of the National Center for Missing and Exploited Children and had done similar work for Myspace. In the months that followed, Nigam and his new clients met repeatedly with representatives from anti-trafficking organizations. They discussed changes to Backpage’s site architecture, moderation practices, and content policies. The organizations suggested, for instance, that users should be prevented from employing search terms such as “incest” or “Lolita,” since these might “indicate illegal activity.” Backpage moderators, meanwhile, should be on the lookout for “ads written from masculine perspective,” particularly if they employed the euphemism “new in town,” which “is often used by pimps who shuttle children to locations where they do not know anyone and cannot get help.”
“You want to sue us, bring your lunch pail, ’cause we gonna be awhile.”
By late January 2011, Backpage had implemented many of the recommendations: It had banned photographs with nudity, drawn up a list of “inappropriate terms,” beefed up its vetting process, and begun referring “ads containing possible minors” directly to Allen’s staff. Ferrer also worked closely with the authorities. According to a Justice Department memo from 2012, “unlike virtually every other website that is used for prostitution and sex trafficking, Backpage is remarkably responsive to law enforcement requests and often takes proactive steps to assist in investigations.” A later memo noted that “even Ernie Allen believed that Backpage was genuinely trying to rid its site of juvenile sex trafficking.”
Lacey and Larkin say they were more than willing to help crack down on child abuse. But the demands being made of them seemed increasingly unreasonable. Sex trafficking, defined as commercial sex involving coerced adults or anyone under 18, was one thing. Consensual sex work was quite another—and it wasn’t even illegal under federal law.
In March 2011, Lacey and Larkin flew to Virginia to meet with Allen. “To say that the meeting did not go well is an understatement,” Allen wrote later that day. After a full hour, he and Lacey “were still screaming at each other.” Allen demanded that Backpage do more to combat prostitution. Larkin said the site would enforce a “newspaper standard,” but Lacey added, “We are not Craigslist, and we aren’t going to succumb to pressure.” A Justice Department memo continues the story: “Allen responded that ‘At least you know what business you are in.’ ”
Lacey’s memories are no rosier. “Allen pulls out this shoddy U. Penn report”—the one from 2001—and “thumps the table with it,” he recalls. The report sent Lacey into orbit. “They love to inflate the numbers by talking about children ‘at risk’ of exploitation,” he says. Owing to the shadowy nature of sex trafficking, such numbers are notoriously hard to pin down: Experts at the Crimes Against Children Research Center have noted that “scientifically credible estimates do not exist,” and one of the Penn report’s authors told The Washington Post in 2015, “Clearly, a new, more current study is needed.”
Lacey thought he knew what business Allen was in too—fearmongering in the interest of fund-raising. He took the meeting as a finger in the chest. Within a few weeks, The Village Voice began to run articles examining the fishy data on child sex trafficking.
In April, Nigam suggested that, as a gesture of goodwill, Backpage should join the Demi and Ashton Foundation, a nonprofit created by actors Ashton Kutcher and Demi Moore. The foundation had recently run a series of PSAs under the slogan “Real men don’t buy girls,” featuring various Hollywood bigwigs. Lacey ignored Nigam’s suggestion. Instead, he instructed The Village Voice to publish an article titled “Real Men Get Their Facts Straight.”
Larkin, for his part, tried to make nice with the authorities—at least until he and Lacey could cash out. Backpage was causing too many headaches, and the papers were growing deader by the day. “Selling print sooner than later was the winning move,” Larkin explains. “The longer you waited, the dumber you were.” Initially it seemed that Backpage would be the easier business to unload. By September 2011, a private-equity firm focused on “out-of-favor industries” had agreed to buy it for $150 million. But the deal fell apart after the National Association of Attorneys General announced an investigation of Backpage. Larkin and Lacey were incensed. Section 230 provided that websites could be prosecuted only under federal criminal law, so they considered a state-level investigation extralegal. From that point on, both men were ready to go to the mattresses.
Whatever their mix of motives, Lacey and Larkin moved their cause to the courtroom. With Section 230 as their weapon, they won a series of civil suits and successfully challenged anti-Backpage laws in New Jersey, Tennessee, and Washington state. Many of the court opinions noted the First Amendment problems inherent in regulating internet content. “When freedom of speech hangs in the balance,” wrote the Tennessee judge, “the state may not use a butcher knife on a problem that requires a scalpel to fix.”
By this point, the nation’s attorneys general had had enough. As they saw it, Backpage and other internet platforms were using Section 230 as an excuse to duck their responsibilities to users. In July 2013, 49 of them signed a letter to Congress saying that the law needed an overhaul.
In June 2014 the Justice Department put this plan into action. It seized myRedBook and demanded that the site’s owner, Eric “Red” Omuro, forfeit $5 million in cash and property. The following summer, the Department of Homeland Security launched a similar raid against “the nation’s largest online male-escort service,” Rentboy, and its owner, Jeffrey Hurant. Both men pleaded guilty to violations of the Travel Act in exchange for lighter sentences and lesser fines. The forfeiture approach seemed to be working.
Meanwhile, Backpage opponents were finding sympathetic ears on Capitol Hill. In April 2015, Senator Rob Portman, a Republican from Ohio and the chair of the Permanent Subcommittee on Investigations, fired off the following tweet: “backpage essentially sells human beings. It’s horrible, and I’m going after them.”
That same month, Lacey and Larkin finally located a serious buyer for Backpage: Carl Ferrer. He agreed to pay just under $603 million for the platform—four times what they’d been offered in 2011.
Portman’s subcommittee soon issued a series of subpoenas, seeking internal documents that would reveal Backpage’s moderation practices. The site fought back, but in September 2016 the US Supreme Court ruled that it had to fork over more than 1 million internal emails and other records. Every dubious decision, every bit of chatter and commentary, every lame joke between Backpage employees and managers, was about to come spilling out.
On January 8, 2017, the Senate subcommittee released its final report, titled “Backpage.com’s Knowing Facilitation of Online Sex Trafficking.” It pushed the theory that Lacey, Larkin, Ferrer, and their employees had invalidated their liability protections under Section 230: Rather than removing illegal and obscene content, the Senate said, Backpage had helped develop it, using clever moderation practices to “sanitize the content” and conceal it from the eyes of the law—all in the name of earning a few extra dollars. This, the subcommittee implied, put Backpage in the position of a content creator, not a mere content host.
Most courts had been rejecting the same argument for six years, but now Portman and his colleagues had what they considered incontrovertible evidence. Much of it was contained in the report’s 840-page appendix, which included highlights from the emails and other documents that the site had been ordered to produce.
The report outlined three major steps in Backpage’s road to perdition. In the early days of the site, most ads for commercial sex were deleted outright. By early 2009, however, Ferrer had begun to instruct his employees to manually remove any obscene photos and “forbidden words,” then post the ad anyway. In an email, he wrote that he considered this the more “consumer friendly” approach, because it would avoid “pissing off a lot of users who will migrate elsewhere.” But the true goal, according to the Senate, was to give those ads “a veneer of lawfulness.” One former Backpage moderator, identified in the report as Employee C, testified that she saw her role as “putting lipstick on a pig, because when it came down to it, it was what the business was about.”
By late 2010, Backpage had developed an automated filter called Strip Term From Ad. It was tuned to remove problematic words (“lolita,” “rape,” “fresh,” “little girl”) before any human moderator had seen the ad. Because the original language wasn’t saved on Backpage’s servers, the Senate complained, there would be no real record of the offending content—nothing to send to law enforcement. “Of course,” the subcommittee wrote, “the Strip Term From Ad filter changed nothing about the real age of the person being sold for sex or the real nature of the advertised transaction.”
Perhaps that’s why, in mid-2012, Backpage instituted a kind of hybrid process, automatically editing some ads while automatically banning others, depending on the terms used. But the Senate saw chicanery here, too. Ferrer complained that the auto-bans were causing confusion among users; if they submitted an ad that contained a banned term, they had no way of knowing why it had been rejected. And so Backpage rolled out an alert feature, which informed users which specific term was to blame. In the Senate’s eyes, it was “coaching its customers on how to post ‘clean’ ads for illegal transactions.”
The appendix was full of what appeared to be smoking guns. In late 2010, for instance, Backpage’s operations manager, Andrew Padilla, castigated one of his employees for putting a note on a user’s account suggesting she was a prostitute. “Leaving notes on our site that imply that we’re aware of prostitution, or in any position to define it, is enough to lose your job over,” Padilla wrote. “If you need a definition of ‘prostitution,’ get a dictionary.” The following summer, four months after the ill-fated meeting with Ernie Allen, Larkin cautioned Ferrer against publicizing Backpage’s moderation practices. “We need to stay away from the very idea of ‘editing’ the posts, as you know,” he wrote in an email.
On the night the Senate report was released, Backpage finally shut down its adult section. It was, of course, far too late to stave off what was coming. The next morning, Lacey, Larkin, Ferrer, and two other Backpage executives appeared in Room 342 of the Senate’s Dirksen Building for a grilling by Portman and his colleagues. It was a carefully choreographed bit of political theater. The Backpage witnesses took the Fifth, as senators knew they must; thanks to a pending case in California, they had no choice. Portman denounced them for refusing to “come clean.”
Within six months of the hearing, at least eight new civil lawsuits were filed against Backpage. The Section 230 defense now worked only intermittently, as courts increasingly read in exceptions. The site’s operators began preparing for a rumble with the Feds. Backpage handed out fat legal retainers, as key employees lawyered up. Lacey and Larkin started segregating cash; funds from the sale of Backpage went into one set of accounts, while proceeds from the newspaper sale went into another. Ferrer bought a brand-new Texas McMansion, put it in his wife’s name, and poured hundreds of thousands of dollars into renovations.
Still, Lacey and Larkin largely shrugged off the Senate’s report. “We didn’t go out and try to disprove it,” recalls an attorney who worked on the matter. “It’s not like there isn’t plenty to say. But to try to rebut 50 pages of allegations in the press? That’s fighting a losing battle.” The lawyer added: “It was a hit piece. It was intended to be a hit piece. What are you going to do?”
Silicon Valley disagreed. On the day Sesta was introduced, the Internet Association—an industry consortium that represents Airbnb, Facebook, Google, Twitter, and more than three dozen other tech companies—released a statement calling the bill “overly broad.” While it was important to pursue “rogue operators like Backpage.com,” the association said, Sesta was more butcher knife than scalpel; it would create “a new wave of frivolous and unpredictable actions against legitimate companies.” In a letter to the Senate, a coalition of human rights and civil liberties organizations warned that the result of all this litigation would be “increased censorship across the web.” Platforms that had once sought to encourage free speech through light moderation would now take an iron-fisted approach. According to the Electronic Frontier Foundation, the chilling effect would be particularly damaging to sites like Wikipedia, which “don’t have the massive budgets to defend themselves that Facebook and Twitter do.”
But Big Tech and its allies were no longer really in a position to complain. On Halloween, Congress hauled in executives from Facebook, Google, and Twitter. Legislators wanted to know why the platforms had failed to stem the tide of fake news and misinformation in the run-up to the 2016 presidential election, why they’d sold political ad space to Russian nationals, why they were supposedly muzzling conservative voices. Pundits opined that the web was all grown up now; many questioned why platforms still needed Section 230’s protection.
Several days after the Capitol Hill perp walk, the Internet Association suddenly reversed course. It came out in favor of a lightly modified version of Sesta, which by now had been combined with an equally clumsily named House bill, the Allow States and Victims to Fight Online Sex Trafficking Act, or Fosta. It was hard not to see the association’s move as a cynical act of political pandering. As Winston Churchill once said, “Each one hopes that if he feeds the crocodile enough, the crocodile will eat him last.”
The Fosta-Sesta law is already panning out as its detractors feared. Once Trump signed it into law, platforms rushed to self-censor; nobody wanted to be Backpaged.
By the spring of 2018, things had gotten even worse for Big Tech. That March, news of the Cambridge Analyticascandal broke, seeming to confirm the public’s worst suspicions. Four days later, Congress passed Fosta-Sesta. The law amends Section 230 to allow states and civil plaintiffs to go after websites that “promote and facilitate prostitution” or “knowingly benefit from participation in a venture that engages in sex trafficking.” Senator Ron Wyden of Oregon, one of the original authors of Section 230 and a longtime tech industry ally, warned that further measures could be in the offing if “technology companies do not wake up to their responsibilities … to better protect the public.”
In spite of the protests of free speech advocates, more than 100 organizations had come out in favor of the law—Truckers Against Trafficking, Girls With Grit, the Christian Action League of Minnesota. Seth Meyers and Ivanka Trump touted it too. But sex workers and their allies were bitterly opposed. The American Association of Sexuality Educators, Counselors, and Therapists noted that Fosta-Sesta contained “a sweeping and unproductive conflation of sex trafficking and consensual sex work.” The association further argued—just as Craigslist had when it shuttered its adult section in 2010—that, in forcing sites like Backpage to remove or censor their content, the law would merely drive predators into even darker corners of the internet. Their crimes would be harder to spot and investigate, and many sex workers would be forced “to pursue far riskier and more exploitative forms of labor” on the streets.
Two weeks after Fosta-Sesta passed, Carl Ferrer appeared in a closed federal courtroom in Phoenix. He pleaded guilty to conspiracy to facilitate prostitution and launder money, surrendered Backpage and its assets, and promised to cooperate with federal authorities. (Ferrer’s plea forbids him to talk to the press. “I’m not trying to avoid you,” he told me at a recent court appearance. “I just have to say no comment.”) A day later, the Feds nailed Lacey and Larkin in Phoenix, charging them and five other Backpagers under long-existing criminal statutes. As many legal experts pointed out, the move suggested that the government never needed Fosta-Sesta to prosecute the pair; President Donald Trump had yet to even sign it into law. Lacey and Larkin never seemed to seriously consider that Ferrer might flip. Other insiders certainly did. “I think he just chickened out,” offers an attorney who worked with Ferrer for almost 20 years and spoke to me on condition of anonymity. The lawyer points out that Ferrer never shared Lacey’s and Larkin’s disdain for cops. “That’s an awful lot of pressure to put on a skinny white guy,” he continues. “And Jim was never all that nice to him.”
Though it is still relatively early, the broad outlines of each side’s strategy are clear. If this case reaches a jury, the government will likely argue that the end justifies the means—that sex trafficking and prostitution generally are so abhorrent that the government had to do away with Backpage, protected speech and all. They will employ what trial lawyers call “reptile theory,” tapping into the jury’s primitive instincts, arguing that Backpage constituted a public danger and that convicting the defendants will make the community safer. They will tell the grisly tales set forth in the indictment’s 17 victim summaries. They will depict Lacey and Larkin as calculating profiteers, outlaws who refused to honor the reasonable requests of law enforcement because they might make a few mil less. They will hope the defendants’ seeming indifference to the plight of trafficking victims inspires the jury to overlook holes in the prosecution’s case.
The endless game of whack-a-mole continues. A month after Fosta-Sesta passed, ads for commercial sex had plummeted 82 percent, according to TellFinder, a data analytics tool originally built by the Defense Department. Within another four months, though, the numbers had rebounded to 75 percent of their previous daily volume. New sites popped up, seeking to fill the void left by Backpage, just as Backpage had done with Craigslist. One of them was called Bedpage.
Still, the Justice Department remains committed to taking the Backpage defendants down. Its plan seems to be to force them to plead, à la Rentboy and myRedBook. Since March 2018, federal prosecutors have seized more than $100 million in cash, real estate, and other assets from Lacey and Larkin. The strategy is simple: No money? No lawyers. QED.
The asset freezes raise all kinds of thorny constitutional questions. Generally speaking, federal prosecutors are permitted to freeze a defendant’s assets based on probable cause alone, even before the defendant has a chance to challenge the government’s case in court. But regular forfeiture rules do not apply in cases involving forums for speech—newspapers, films, books, magazines, websites. The US Supreme Court has decreed that when the government seizes these expressive materials, or the proceeds derived from them, it must immediately hold an evidentiary hearing to determine whether the seizure is valid.
But the Backpage defendants have a problem: So far, they can’t get a court to hear their claims. Since last summer, the Justice Department appears to have been playing a clever shell game. They’ve brought cases against the Backpage defendants in two federal districts—civil seizures in Los Angeles, criminal matters in Phoenix—and they’re making the defendants spend what money they have left chasing Uncle Sam from place to place. So far, judges in both districts have agreed with the government’s suggestion that they should defer to each other, effectively denying the defendants a forum to challenge the asset freezes. The US Court of Appeals for the Ninth Circuit will hear arguments in the case in July.
“The abuse on these platforms does not stop at sex trafficking,” the association of Attorneys General wrote.
Paul Watler, a media law specialist at Jackson Walker LLP in Dallas, is troubled by the seizure tactic. “It’s an end run around the First Amendment,” he says. The big question remaining, according to Eric Goldman, a professor at Santa Clara University School of Law, is whether federal prosecutors will use this strategy to crack down on other platforms in the future. “Is this the leading edge or a one-off?” he asks. “I still don’t know the answer to that. But they’re coming for us, one way or another.” Even if Fosta-Sesta is one day ruled unconstitutional, as many legal scholars expect, government officials have shown that they’re willing to subvert Section 230 in other ways. If Lacey and Larkin lose—if the asset seizures stand and the Travel Act charges stick—prosecutors will have a valuable new weapon to wield against Silicon Valley. Personal wealth will be no deterrent.
Meanwhile, the National Association of Attorneys General is on the warpath once again. On May 23, 2019, the group sent a letter to a handful of congressional leaders urging further cutbacks to Section 230. “The abuse on these platforms does not stop at sex trafficking,” they wrote. “Stories of online black market opioid sales, ID theft, deep fakes, election meddling, and foreign intrusion are now ubiquitous.” They recommended that Section 230 be amended to allow a wide variety of state-level criminal prosecutions.
Lacey and Larkin remain convinced that the furor over sex ads is a moral panic, irrational and hysterical, cynically stoked by politicians and law enforcement. And they’re not about to surrender. They know they’re not the world’s most sympathetic defendants—rich (or formerly rich) white men accused of, at the very least, morally questionable business decisions, fighting for their right to hire the best lawyers money can buy.
Yet they can still seem oddly tone-deaf, even a touch naive. In April, a federal judge shot down Lacey’s request to have his ankle monitor removed in order to swim during a Hawaiian vacation. (In pleadings, Lacey’s lawyers explained he had use-’em-or-lose-’em flyer miles.) Prosecutors called Lacey a flight risk, and the resulting headlines were predictably brutal. Lacey responds with incredulity: “The idea that I would run—are you kidding? I’m taking the first flight to confront you.”Christine Biederman is a lawyer and investigative reporter based in Dallas. She is working on a book about Backpage.com.
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