U.S. District Choose Diane Humetewa acquitted three former Backpage executives of myriad counts towards them final week—extra proof of how empty a lot of the federal case towards them is. Humetewa dominated that there was inadequate proof to uphold 50 of the counts* towards journalist and Backpage co-founder Michael Lacey, 10 of the counts towards former Government Vice President Scott Spear, and 18 of the counts towards former Chief Monetary Officer Jed Brunst.
From the start, this prosecution has been premised on a bogus rationale (authorities yammer on about intercourse trafficking although not one of the defendants are charged with intercourse trafficking), overreaching in its scope (making an attempt to carry an online platform accountable for user-generated speech, in contradiction to Part 230), offensive to the First Modification, and relentless in its makes an attempt to handicap the protection. So it is a deal with to see a choose slap prosecutors down a notch, even when it comes very late within the recreation (after two trials and after one defendant taking his personal life) and regardless that it could not make a lot of a sensible distinction for Lacey, Brunst, and Spear (who face imprisonment for the remainder of their lives even with the acquittals).
However to learn Humetewa’s current order is to get infuriated concerning the underlying case another time. Presenting the proof within the gentle most favorable to the federal government’s place, Humetewa manages (inadvertently?) to focus on how insane and unfair this place is.
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A Mandate To Thoughts-Learn
Humetewa’s order showcases how this case has turned regular content material moderation into legal exercise—in what ought to function a warning to tech firms of all kinds. The federal government’s calls for are merely unimaginable.
On this case, Backpage banned express affords of intercourse for cash (which is prohibited in many of the U.S.) however allowed adults advertisements extra typically, since loads of types of intercourse work are authorized. Offering a platform for protected speech ought to itself be protected, in fact. However in a very Orwellian vogue, the federal government argues that the very act of forbidding express prostitution advertisements was a approach of encouraging prostitution advertisements, thereby facilitating prostitution in violation of the federal Journey Act.
The alleged “conspiracy” right 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 places it. To this finish, they allegedly banned not solely direct affords of intercourse for cash however sure “code words” that politicians and activists construed to connote prostitution affords.
Underneath this rubric, web sites cannot win. If they permit content material promoting explicitly unlawful issues, they’re going to be in hassle. But when they ban mentioned content material, they might nonetheless be in hassle. (On this similar vein, Humetewa calls the truth that Backpage responded to regulation enforcement subpoenas a “facade” that really furthered its purpose of facilitating prostitution. Serving to the federal government clear up legal instances is definitely getting used towards the positioning.)
For a time, Backpage would scrub advertisements of express phrases and nonetheless enable them to put up. Later they might prohibit such advertisements totally. Some individuals level to the previous as if it is some kind of smoking gun. However to me, it merely represents the identical kind of trial-and-error course of that any platform fueled by user-generated content material went by means of within the 2000s and 2010s. Possibly some Backpage executives or moderators weren’t good at each step of the method, however content material moderation at scale is a large, messy, and astronomically exhausting job. We can’t have a course of the place short-term moderation mishaps are handled as legal issues if we’re to have an web with something resembling free speech.
In addition to, the elimination of “code words” doesn’t in itself imply that moderators “knew” the advertisements had been for criminal activity. Many of those code phrases had been added to Backpage moderation lists beneath intense stress from attorneys common, activists, and the Nationwide Heart for Lacking and Exploited Kids, and these teams’ approximations of what constituted criminal activity (versus simply referencing authorized intercourse work, or non-commercial hookups, or simply slang typically) might not have had any relation to actuality. Backpage performed alongside to appease these teams, however that does not imply employees essentially purchased into the concept the phrases in query might truly decide whether or not one thing was or wasn’t an advert for criminal activity.
Some notably foolish examples: The authorities insisted that “young” and “new in town” had been indicative of kid intercourse trafficking, when these are regular ways in which grownup intercourse employees might market themselves.
Content material moderators aren’t mind-readers. They cannot intuit what’s actually on a poster’s thoughts or what’s actually going to occur when individuals related by on-line content material meet in individual. However that is primarily what the federal government is saying they should do right here.
As a result of We Mentioned So, That is Why
One of many on-line speech instances dealing with the U.S. Supreme Court docket this 12 months considerations the Biden administration’s contact with social media firms about sure content material, which conservatives allege amounted to stress to suppress this speech. Libertarians name this “jawboning”—attempting to get across the First Modification requirement towards authorities censorship by exerting casual stress on platforms to suppress speech that the federal government would not like.
Jawboning is on the coronary heart of the Backpage case, the place failing to succumb to it has been elevated to a legal 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 as a result of regulation enforcement advised Backpage executives that some portion of their advertisements related individuals who met up and engaged in unlawful conduct, the platform was imagined to…what? Shut all of it down? Ban advertisements for modeling, relationship, or the rest that is likely to be a entrance for industrial intercourse? Strip tons of individuals charged with no crimes of their speech simply because some small portion of the positioning’s customers had been discovered to have dedicated 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 “Information shops, together with the New York Occasions, additionally ran tales on Backpage’s Grownup part.”
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 “cash 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 danger” (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 docket finds there may be an insufficiency of trial proof supporting a direct concept of legal responsibility for any of the Journey Act expenses introduced towards him. Particularly, the Authorities didn’t put forth ample proof of Mr. Lacey’s particular intent to facilitate the promotion of the posters or prostitution companies comprising Counts 2 by means of 51, as that mens rea is outlined by the Ninth Circuit,” the judge writes. “There was no proof that he was concerned with growing or overseeing Backpage’s moderation or aggregation practices for the advertisements in Counts 2–51.”
But because of things like Lacey once (allegedly) saying “consenting adults can do what consenting adults wish to do”—which the judge describes as support for legalized prostitution—and the fact that “Lacey’s wealth trusted the success of Backpage’s Grownup part,” Humetewa decided that there’s sufficient evidence to sustain a conspiracy charge. And “although the Court docket finds that there was inadequate proof” to sustain Travel Act charges, which require overt acts, she did not entirely acquit him of those counts, because “there was ample proof…for a rational juror to seek out him responsible by means of the acts of one among 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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