Backpage: A Blueprint for Squelching Speech

Reason ^ | April 29, 2024 | Elizabeth Nolan Brown

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U.S. District Judge Diane Humetewa acquitted three former Backpage executives of myriad counts against them last week—more evidence of how empty so much of the federal case against them is. Humetewa ruled that there was insufficient evidence to uphold 50 of the counts* against journalist and Backpage co-founder Michael Lacey, 10 of the counts against former Executive Vice President Scott Spear, and 18 of the counts against former Chief Financial Officer Jed Brunst.

From the beginning, this prosecution has been premised on a bogus rationale (authorities yammer on about sex trafficking though none of the defendants are charged with sex trafficking), overreaching in its scope (attempting to hold a web platform accountable for user-generated speech, in contradiction to Section 230), offensive to the First Amendment, and relentless in its attempts to handicap the defense. So it's a treat to see a judge slap prosecutors down a notch, even if it comes very late in the game (after two trials and after one defendant taking his own life) and even though it may not make much of a practical difference for Lacey, Brunst, and Spear (who face imprisonment for the rest of their lives even with the acquittals).

But to read Humetewa's recent order is to get infuriated about the underlying case all over again. Presenting the evidence in the light most favorable to the government's position, Humetewa manages (inadvertently?) to highlight how insane and unfair this position is.

A Mandate To Mind-Read

Humetewa's order showcases how this case has turned normal content moderation into criminal activity—in what should serve as a warning to tech companies of all sorts. The government's demands are simply impossible.

In this case, Backpage banned explicit offers of sex for money (which is illegal in most of the U.S.) but allowed adults ads more generally, since plenty of forms of sex work are legal. Providing a platform for protected speech should itself be protected, of course. But in a truly Orwellian fashion, the government argues that the very act of forbidding explicit prostitution ads was a way of encouraging prostitution ads, thereby facilitating prostitution in violation of the federal Travel Act.

The alleged "conspiracy" here is that defendants agreed "to work together toward the goal of making money by helping prostitution posters make their ads look less obviously like prostitution ads," as Humetawa puts it. To this end, they allegedly banned not only direct offers of sex for money but certain "code words" that politicians and activists construed to connote prostitution offers.

Under this rubric, websites can't win. If they allow content advertising explicitly illegal things, they'll be in trouble. But if they ban said content, they could still be in trouble. (In this same vein, Humetewa calls the fact that Backpage responded to law enforcement subpoenas a "facade" that actually furthered its aim of facilitating prostitution. Helping the government solve criminal cases is actually being used against the site.)

For a time, Backpage would scrub ads of explicit terms and still allow them to post. Later they would prohibit such ads entirely. Some people point to the former as if it's some sort of smoking gun. But to me, it merely represents the same sort of trial-and-error process that any platform fueled by user-generated content went through in the 2000s and 2010s. Maybe some Backpage executives or moderators weren't perfect at every step of the process, but content moderation at scale is a huge, messy, and astronomically hard task. We cannot have a process where short-term moderation mishaps are treated as criminal matters if we are to have an internet with anything resembling free speech.

Besides, the removal of "code words" does not in itself mean that moderators "knew" the ads were for illegal activity. Many of these code words were added to Backpage moderation lists under intense pressure from attorneys general, activists, and the National Center for Missing and Exploited Children, and these groups' approximations of what constituted illegal activity (as opposed to just referencing legal sex work, or non-commercial hookups, or just slang generally) may not have had any relation to reality. Backpage played along to appease these groups, but that doesn't mean staff necessarily bought into the idea that the words in question could actually determine whether something was or wasn't an ad for illegal activity.

Some particularly silly examples: The authorities insisted that "young" and "new in town" were indicative of child sex trafficking, when these are normal ways that adult sex workers may market themselves.

Content moderators are not mind-readers. They can't intuit what's really on a poster's mind or what's really going to happen when people connected by online content meet in person. But that's essentially what the government is saying they have to do here. Because We Said So, That's Why

One of the online speech cases facing the U.S. Supreme Court this year concerns the Biden administration's contact with social media companies about certain content, which conservatives allege amounted to pressure to suppress this speech. Libertarians call this "jawboning"—trying to get around the First Amendment requirement against government censorship by exerting informal pressure on platforms to suppress speech that the government doesn't like.

Jawboning is at the heart of the Backpage case, where failing to succumb to it has been elevated to a criminal matter.

There's "evidence that each of these Defendants were on notice by law
enforcement, State Attorneys General, non-profits, and the media that a portion of
Backpage's escort ads were in fact leading to prostitution offenses," writes Humetewa.

So because law enforcement told Backpage executives that some portion of their ads connected people who met up and engaged in illegal conduct, the platform was supposed to…what? Shut it all down? Ban ads for modeling, dating, or anything else that might be a front for commercial sex? Strip tons of people charged with no crimes of their speech just because some small portion of the site's users were found to have committed crimes?

"As early
as 2010, Mr. Lacey was notified by a group of State Attorneys General that 'blatant prostitution ads are rampant' on Backpage and they requested that Backpage take down
the 'adult services portion of Backpage,' the judge writes. She also notes that "News outlets, including the New York Times, also ran stories on Backpage's Adult section."

Again: So what? Under this logic, when the Biden administration told sites they were being used to spread election or coronavirus misinformation, that would be grounds for banning all talk of the election or COVID. Or the Times running an article about Facebook users meeting up to buy drugs would be grounds to prosecute Meta executives.

These ludicrous expectations give the government immense power to shut down any sort of speech that authorities want to shutter. This time it's about sex work and Backpage, but this playbook works well for all sorts of platforms.

Backed Into a 'Money Laundering' Corner

When people hear "money laundering," they tend to think of people hiding money so as not to have to pay taxes on it, or doing illegal things and then trying to pass the proceeds off as being from a legitimate business (as when a crappy restaurant is used to legitimize mob profits). This is very much not the ways this case's money laundering charges came about.

In this case, the government cut off banking options for a business charged with no crimes and then objected when that business tried to find some way to process money.

In Lacey's case, federal agents warned banks that doing business with him might be a "reputational risk" (Nice bank you got there, you wouldn't want us to have to investigate you, would you?). When banks starting refusing his money, he opened an account in Hungary. The feds know about this because his lawyer submitted all the requisite paperwork letting them know about this. Then they charged Lacey with international money laundering.

In various ways, authorities also put pressure on financial institutions to drop Backpage as a business (with one Illinois sheriff going so far as to threaten credit card companies who did not—a move that a federal court later ruled unconstitutional). Unsurprisingly, some banks and credit card companies ceased wanting to accept Backpage deposits or otherwise associate with the company. So Backpage launched subsidiary companies under different names to handle payments and payroll, used charge descriptors that didn't mention Backpage, and things like that.

The company wasn't trying to hide the money it made. It was just trying to operate within the confines of an impossible situation that the government had put it in. Without having to bother with due process, authorities attempted to cut off its ability to bank, and then authorities penalized it for taking steps to work around this.

Again, this is a situation that has ramifications far beyond Backpage. We've seen regulators pressure financial institutions against doing business with the NRA, gun and ammunition sellers, porn performers, and others. Attempts to get around this government coercion could land these entities in criminal court, too.

Conspiracy

I could go on and on, but I'll leave you with one last infuriating thing about this case: the use of "conspiracy" to lump all of the defendants together.

By pinning conspiracy charges on Lacey, for instance, prosecutors are trying to associate him with all the actions of former CEO Carl Ferrer (who plead guilty and turned state's evidence) and other executives who were in on the day-to-day decisions about Backpage promotion and moderation strategy, even though Lacey had little if anything to do with this. At the Phoenix New Times and other newspapers, Lacey was the editorial guy, not the business guy, and he did not become the business guy when Backpage launched. If Ferrer or others really did make decisions that crossed legal lines, the authorities should have gone after them for that, not Lacey. But conspiracy charges allow prosecutors to tie Lacey to actions way beyond the scope of his knowledge or involvement.

"With regard to Mr. Lacey, the Court finds there is an insufficiency of trial evidence supporting a direct theory of liability for any of the Travel Act charges brought against him. Specifically, the Government did not put forth sufficient evidence of Mr. Lacey's specific intent to facilitate the promotion of the posters or prostitution businesses comprising Counts 2 through 51, as that mens rea is defined by the Ninth Circuit," the judge writes. "There was no evidence that he was involved with developing or overseeing Backpage's moderation or aggregation practices for the ads in Counts 2–51."

But because of things like Lacey once (allegedly) saying "consenting adults can do what consenting adults want to do"—which the judge describes as support for legalized prostitution—and the fact that "Lacey's wealth depended on the success of Backpage's Adult section," Humetewa decided that there's sufficient evidence to sustain a conspiracy charge. And "though the Court finds that there was insufficient evidence" to sustain Travel Act charges, which require overt acts, she did not entirely acquit him of those counts, because "there was sufficient evidence…for a rational juror to find him guilty through the acts of one of his co-conspirators."

* In last week's initial order, Humetewa acquitted Lacey on 53 counts against him. In a revised order released on Friday, Humetewa changed this to acquit him on only 50 counts.

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