So to Speak podcast transcript: The backpage.com saga

Note: This is an unedited rush transcript. Please check any quotations against the audio recording.

Nico Perrino: So, let’s get started. Welcome back, folks, to So to Speak, the Free Speech Podcast. As always, I am your host, Nico Perrino. I’m excited for today’s show. There’s a case that’s been going through the courts for quite some time now that I imagine some of our listeners have heard about. It’s the Backpage.com case.

Now, for those who aren’t familiar with Backpage or maybe only have a brief understanding of what it is, it was, I guess I should say, an online classifieds advertising service that was founded in 2004 by the alternative press, New Times, which was a press that was founded by Michael Lacy who was the editor and Jim Larkin was the publisher. Its name drew its inspiration from the Backpage of the New Times alternative print edition, which housed advertisements. You can think of Backpage.com as a competitor if not the chief competitor to Craigslist.

Like Craigslist, it allowed users to post ads to categories such as personals, automotives, rentals, jobs, and most notably for this conversation, adult advertisements. It quickly became very popular. The second largest online classified site in the United States with over 600 million – a 600 million valuation, I should say, in 2015. And according to the Department of Justice, they alleged that 90% of the site’s earnings came from adult ads.

Now, this is where we get to the controversy. The National Association of Attorney Generals has described Backpage as a hub for human trafficking, especially the trafficking of minors. In 2018, the website domain was seized by the FBI and its executives and staff were prosecuted under various charges, prostitution, money laundering, and conspiracy. Nobody, importantly, was charged with human trafficking. In fact, Backpage has a well-documented history of working with law enforcement to prevent human trafficking on the site and has even won an award from the FBI for its collaboration to take down human trafficking.

And in 2001, a jury trial on these charges was declared a mistrial, in fact, due to the fact that prosecutors continually referenced child sex trafficking, which the defendants were not accused of. Now, we get to modern day. In November following a mistrial and years of court proceedings, Michael Lacy was found guilty of international concealment money laundering. He was found guilty on one of, I believe, 80 or more charges. His co-founder sadly, Jim Larkin, committed suicide before the proceedings could begin.

A number of other execs and staff were convicted of things ranging from one count of conspiracy to violate the Travel Act, 30 money laundering counts for one exec. There was a dozen counts of facilitation of prostitution. So, they were variously acquitted and found guilty of these prostitution, money laundering, and conspiracy charges. First Amendment advocates have long supported Backpage on the grounds that their site was protected by Section 230 of the Communications Decency Act as well as First Amendment principles.

And advocates have been concerned the Backpage case represents a slippery slope for prosecution of protected speech and the rights of websites that host user generated content. They see it as a threat to the free and open internet. Whereas opponents and prosecutors have frequently described the site as an online brothel.

So, we’ve got three distinguished guests here with us today to kind of break all of this down. Two of the guests are repeat appearances on the show. You all know Ronnie London who is FIRE’s general counsel and Bob Corn-Revere who is FIRE’s chief counsel. And in addition to being regular guests on the show and my colleagues here at FIRE, prior to coming to FIRE, they represented Backpage and so are very familiar with the prosecution against the website and its staff.

But joining us as well is Elizabeth Nolan Brown who is a senior editor at Reason Magazine where she has written in depth about the Backpage case. And it’s the main – I believe, Elizabeth, you’re the main author of Reason’s Morning Newsletter. Is that correct?

Elizabeth Nolan Brown: I was until very recently. I’m launching a new newsletter that’s going to be specifically focused on sex and tech and First Amendment issues.

Nico Perrino: You heard it here first maybe. But in 2018, Elizabeth, you wrote a profile of Backpage that dives into the history of Jim Larkin and Michael Lacy and their journalistic enterprises. I learned a lot from the profile. They pissed everyone off and they had, actually, a unique history of defending free speech values in court. And then, you dive into the current controversy. Elizabeth, I’d love to start with you given that you wrote this profile. Can you tell us a little bit about the origins of New Times, Inc., which then spun off Backpage and kind of the stories of Jim Larkin and Michael Lacy?

Elizabeth Nolan Brown: Yeah. I had started writing about Backpage before I ever met them because I was writing about sex worker rights issues and also free speech and technology issues and controversy around Section 230. But I had the chance to meet them briefly in 2017 when they were called before congress. And then, after they were arrested in 2018, I went out to Arizona that summer. And they hadn’t talked to any other journalists about their case yet. And I got to sit down with them over the course of several days and just hear about, not only their current case but about their whole history.

And I hadn’t known so much about them. And when you hear their story, it puts a lot more context into why they are fighting so hard in this battle. They had met as students in Arizona in the 1960s. The formed a student newspaper there that was originally specifically dedicated to opposing the Vietnam War. They worked to make it into a more robust paper that was ad supported. They said from Day 1, they didn’t want to be starving journalists. They needed a way to support the paper through advertising. So, they had a lot of classified ads.

They also did a lot of arts and entertainment coverage, too. But the underlying ethos of their paper was reporting on issues that the mainstream newspapers in Phoenix would not report on. And this continued at the Phoenix New Times. And then, they eventually went on to expand and own the Miami New Times and then, to own alt weekly papers in more than a dozen cities across the U.S. And everywhere they went, their thing was calling out the local power structures and reporting on – not chumming up to them like a lot of the mainstream papers would for access but calling them out for things.

They also fought a ton of First Amendment battles. One of the first times that they wound up in court was because they had an advertisement for – this is back pre-Roe v. Wade. And they had an advertisement for a service that would help women in Phoenix go out to California to get abortions. And that was illegal under Arizona’s anti-abortion law. And so, they went to court over that. Time after time, they went to court to stick up for free speech. They fought Sheriff Joe Arpaio when they had published some things about him.

And he had them arrested and they ended up winning a huge settlement after fighting him in court about that. They channeled that into a fund that supports immigrant get out the vote things in Arizona. They’ve been both challenging authority in their papers and in court for several decades, which I think really helps explain why when the government came to Craigslist and said, “You’ve got to stop running adult ads,” Craigslist eventually was like, “Yeah, okay. We’re just going to do that.”

When they came to Michael Lacy and Jim Larkin and the heads of Backpage and said, “You’ve got to do it,” they were like, “No. We know our First Amendment rights. We’ve been fighting for our First Amendment rights for decades. We’re going to keep doing this because it’s legal.” So, that’s been there thing all along. And as you mentioned, they founded Backpage in order to continue funding their journalism once Craigslist took over and made print classified ads not as profitable anymore.

Nico Perrino: Yeah. Bob, can you talk a little bit about the significance of classified ads to the newspaper ecosystem? I think a lot of folks who might be of a younger generation, maybe even my generation, don’t quite understand what classified ads in a newspaper are and how they over time migrated online.

Robert Corn-Revere: Well, sure. Just starting with the bigger picture for the economics of the newspaper business overall. Certainly, subscribers pay a fee for the newspaper but that doesn’t come close to providing the economic backbone for the business. It’s always come through advertising. And classified ads are those ads at the back of the paper you see for cars for sale or various different categories, employment ads and so on. And those have always been the lifeblood of print newspapers in the United States.

The alternative weeklies that were the background that Lacy and Larkin came up through were the ones who would not just provide an alternative take on the news and challenge authority, but they would also carry categories of classified ads that the mainstream newspapers largely would not. So, talking about when the New Times was founded in the ‘70s, they would have ads for things like head shops. They would have ads for abortion services back before Roe v. Wade where you can find out about services in other states.

They would also have adult ads for massage parlors, for strip clubs, for things like that. And so, that was the background of advertising, in general, and then, advertising in the alternative weekly world. And then, that moved over to the internet once classified ads and the revenue from them started being eaten up by free services online starting with Craigslist.

Nico Perrino: So, the ads that were housed on Backpage or sometimes posted on Backpage or sometimes posted on the back page of the print edition of New Times –

Robert Corn-Revere: Well, that came specifically from the Village Voice. And for that group of alternative weeklies that Lacy and Larkin ultimately owned, the flagship was, ultimately, they purchased the Village Voice, the long time New York alternative news weekly. And at the Village Voice, they called their classified ad section because it was printed on the back page the Backpage. And so, that is where the name came from for the online version of the Backpage.com website.

Nico Perrino: So, presumably, the automotive services, maybe even the head shop information, some of the classified ads that appeared there were non-controversial. But the crux of the case against Backpage involves adult services, massages, escort services.

Robert Corn-Revere: Right. Right. And the one thing that has led to a political campaign against Backpage and against a lot of the misunderstanding about it is that when you have ads for adult services, keep in mind that majority of those services are legal services. They don’t include advertisements for illegal sex for money transactions. And this is something that Judge Richard Posner in one of the cases that Ronnie and I handled for Backpage pointed out. And just because something is for an adult service doesn’t mean you’re talking about an illegal adult service.

And he went through a list of the kinds of things and the kinds of ads you see on Backpage. For example, escort services, which are licensed in most states, advertising for those services is entirely legal. Strip clubs, massage services, things like that. And it is only in those categories where you actually have people out there breaking the law that the advertisements can be classified as beyond the pale.

Nico Perrino: So, what it really comes down to is prostitution, right, Ronnie? So, escort services, correct me if I’m wrong, this isn’t really my world, advertise what is theoretically just an escort. Someone who goes around with you places, spends time with you but doesn’t on its face, although it’s often suggested or implied, involve payment for sex, right, which would fall under the definition of prostitution.

So, what they’re coming after Backpage for is the allegation that these ads are actually for prostitution, which in most states is illegal and, therefore, arguing what, that it’s speech integral to criminal conduct, Ronnie? How do we think about that?

Ronnie London: Well, the theory of the government’s case when they finally got – I’m jumping forward just a little bit here. But to answer your question also, the theory of the government’s case and of many of Backpage’s critics was you can tell from these ads just by looking at them that they’re for illegal prostitution. But the actual truth of it is you, in fact, cannot.

You, in fact, probably could not pick out an ad that ultimately turned out to be for an illegal sex transaction once the advertised person and the customer or the person who responded to the ad would meet up and decide how they were going to go about their interaction and an ad where, like you say, it was just strictly for keeping someone company. And don’t forget also that there are legal adult ads for things like people who come to bachelor and bachelorette parties who provide a First Amendment service.

That is put on a show that doesn’t involved prostitution or sex for money in any way, shape, or form. That also would fall into the category of adult ads. So, the idea was – it was almost like what you just said where there is this subtext of yeah, but we all know what they’re really for. But you don’t. And when the government tries to put a halt to something like that or to criminally punish it or whatever it is, the burden is on them. They don’t get to say, “Well, if it walks like a duck and it talks like a duck and it swims like a duck then, that’s close enough for government work.”

In the First Amendment sphere, that’s absolutely untrue.

Robert Corn-Revere: And let me add just a thought to that. And that is the complaints against any of the classified ad websites, including Craigslist and not just Backpage, were that they facilitated not just prostitution but also child sex trafficking. And that’s the part of the allegation that is absolutely false. To begin with, Backpage had a track record of cooperating with law enforcement whenever they came across information about possible trafficking of reporting it. They also would respond to subpoenas within 24 hours.

They would send people to testify at trafficking trials around the country on the company dime. And so, they were probably one of the better sources, if not the best source, online for combatting child sex trafficking. The other argument was that they facilitated not trafficking but prostitution. And, again, for the reasons that Ronnie was describing, the assumption was being made that you can simply tell that an ad is for someone who is wanting to perform an underlying illegal act is something that the government doesn’t just get to assume.

The trafficking allegations, interesting while they formed most of the political reaction and a lot of the political reaction to Backpage, the government didn’t even try to bring a trafficking case against Backpage because of lieu. They had no case in that area. And when we talk about the trial, part of the misconduct by the government during the trial was even though they didn’t charge Backpage and its former owners with child sex trafficking, they kept trying to introduce to taint the jury with the thought that somehow this involved child sex trafficking.

Elizabeth Nolan Brown: Could I jump in? I just wanted to add one thing to Ronnie’s point, too. There’s a whole host of services that people might not realize are legal that are like dominatrix services, sensual massage, things that actually could involve getting with another person and engaging in some sort of erotic activity or some sort of nudity or things like that without actually explicitly engaging in direct sex acts for money. And those are legal, too, and much harder to tell apart from prostitution based just on an ad.

And then, to Bob’s point, I just wanted to say there were these memos that were turned over by the prosecution accidentally to the Backpage defendants during the trial. And they wanted to use them in their defense but they were told they weren’t allowed to because the prosecutors only accidentally gave them to them. But these memos were written by federal prosecutors back in 2011 through 2013. And that was when they had started looking into could they make a child sex trafficking case against the folks at Backpage. And they did extensive interviews.

They went through all sorts of documents. They interviewed all sorts of employees. They did all of this stuff. And what they came away saying was, “We thought we’d go in, seeing open admissions for them allowing child sex trafficking for profit, even though they knew that’s what the ads were for. And instead, we found that they were very much trying to stop that. Instead, we found that they were very much trying to help out prosecutions and things like that.”

So, you have federal prosecutors directly contradicting in their private memos that were never supposed to get out the message that you had the Department of Justice and politicians putting forward publicly.

Robert Corn-Revere: And the prosecutors did not want those memos to see the light of day. As Elizabeth pointed out, they were done during an earlier investigation of Backpage where they found both that Backpage cooperated with the government, had been commended by the FBI in its efforts to prevent trafficking. And the other thing is they said, “Contrary to what many people believe, you can’t tell from the face of an ad whether or not it is for criminal activity. And you can’t assume that when it’s published on a third party website like this that they had any knowledge of it.”

And yet, that’s what the entire prosecution was based on saying that you can tell just by looking at it. Now, this has been a rocky prosecution from the beginning going after the former owners long after they had sold the company and then, various other officers and workers at Backpage. And one of the reasons for the first mistrial is that three days into the testimony, not only did the government persist in trying to put on all of this tainted testimony about child sex trafficking that had nothing to do with the prosecution, they also made the very argument they had debunked in those memos that Elizabeth pointed out.

They, basically, said, “You can tell just by looking at these ads that they’re for illegal activity.” And then, the publishers had to know by looking at these ads. And even though their first witness, basically, said, “You can’t tell.”

Ronnie London: Their law enforcement expert.

Robert Corn-Revere: Their law enforcement expert. So, it was a clown show from the beginning. The sad part is it’s a clown show that had lethal consequences for Jim Larkin who snapped, ultimately, under the pressure of the prosecution and for those people who had findings that they had violated certain laws that still have to deal with that. We can talk about the weird verdict that came in later. But still, the consequences here in destroying people’s lives, destroying a business are very significant.

Nico Perrino: So, I do want to bring up before we get into the principles at stake in this case and why First Amendment advocates or advocates for an open internet should care about it, the objection that when my producer and I were looking into this figured most prominently in our minds, which there was the allegation that Backpage helped some of these advertisers tweak their content so it didn’t explicitly advocate – or advertise, I should say, prostitution.

I found a note here in October 2010, operations manager, Andrew Padilla, is alleged to have sent an email to a large number of Backpage employees containing instructions on how to moderate advertisements, including a spreadsheet of key words indicated prostitution that needed to be stripped from the ads before they could be posted. It’s alleged that this was a common practice in consultation with Backpage’s moderation team and that federal prosecutors claimed this was evidence that Backpage knew they were facilitating prostitution. What’s the response to that?

Robert Corn-Revere: We should start by acknowledging that the jury found Andrew Padilla not guilty on all 51 charges for which he was charged. And what you had were moderation policies, which said, “Ads cannot appear on our platform that make the following allegations.” The idea that the moderation practices were intended to conceal what the government said was prostitution flies in the face of their argument that, “Regardless of what changes were made, we know that these ads are for prostitution.” The moderation policies were to let people know that you cannot advertise using these terms on Backpage.

Elizabeth Nolan Brown: Yeah. I think a lot of the arguments when people talk about that sort of misunderstand the way content moderation works. And you see them now making these same arguments – the government making these same arguments against all of the mainstream social media sites that have age limits. But they’ll complain about Backpage and now about these other sites like, “Oh, well, they say you have to be 18. And then, if someone creates an ad and says that they’re 17 and they’ll tell you no, you have to be 18 then, they’re just allowed to create one that says you’re 18.”

And you’re like they can’t just ban anyone from – they’re not telling them that because they want them to secretly code it as they’re actually 18. And that’s what they make it seem like. Or they’ll say, “Oh, they told them they weren’t allowed to use these prostitution words. That must mean they’re coaching them to secretly conceal their prostitution.” But that’s also exactly what you do if didn’t want people to be advertising prostitution on your website.

So, it’s a damned if you do, damned if you don’t think because, obviously, if they explicitly let people post on there like, “I am advertising prostitution,” that would be illegal. But then, if they told people, “No, we don’t let you say these words that are indicative of prostitution on our website,” then, the government says, “Oh, well, the fact that you’re telling them not to advertise prostitution also means that you’re in cahoots with them advertising prostitution.” It’s just – they really can’t win in that regard, I think.

And it goes to the fundamental way that the content moderation has to work. Unfortunately, you can’t just ban someone from advertising forever because they one time tried to post something that had an illegal word in it. And it’s not unique to Backpage that they do that, too. All sorts of websites.

Ronnie London: The government itself operates in the same way because, for example, under the Children Online Privacy Protection Act, which, basically, says, “You can’t knowingly collect personal information from those under 13,” that’s the trigger if you collect something based on someone’s age that you know, you’ve got a whole compliance rationale. And so, the FTC has said it is permissible in certain circumstances to age gate out anyone who is under 13 because you’ve got a service that you want to be able to collect personal information for.

And the FTC says, “If you age gate and you allow people to put in the date and you don’t suggest what the right answer should be, you drop a cookie so they can’t come back and give another age, give another guess.” That is unless they’re smart enough to clear their cookies or just switch to a different browser and proceed on the same website again. And the FTC has said, “Okay. If the users are doing that, that’s not chargeable conduct to the website operator under COPPA and that won’t be a violation.”

You couldn’t operate otherwise. And to say that Backpage was doing something similar and when they did it, it was impermissible, I think is a bridge too far to say the least.

Robert Corn-Revere: And here I think understanding a little bit about the legal context for publishing third party speech would be in order. Obviously, in most states, prostitution as an activity is a crime. Nevada is an exception. But the act of engaging in prostitution is against the law in most jurisdictions. The question of whether or not carrying an ad for prostitution is then the – creates the First Amendment question. Are you publishing something that is for a service that is against the law? And here what is required under the First Amendment is specific knowledge of what you’re dealing with.

You have to both know and intend that what you have accepted for publication violates the law. Here in the Backpage prosecution, they were charging both the former owners and certain of the executives of Backpage for knowledge of prostitution ads they had never seen. There were millions upon millions of ads and the prosecution here listed 40 of them and, basically, said, “You are responsible for knowing these existed and knowing what they were proposing,” even though they were ads that none of the defendants had ever seen.

And so, the First Amendment implications of holding people criminally responsible for someone else’s speech and someone else’s acts, whether or not those acts were criminal or not, raises profound First Amendment questions, particularly for a medium where much of what you see online is third party speech, speech that a platform is going to host that someone else has posted.

Elizabeth Nolan Brown: Can I add one more thing? Sorry.

Nico Perrino: Go ahead, Elizabeth. Yeah.

Elizabeth Nolan Brown: One of the things, too, that is kind of weird and double talk in this case from politicians and prosecutors is that National Center for Missing and Exploited Children gave Backpage a list and pressured them saying, “We really wish you would ban all of these terms. We think that they’re indicative of prostitution or child sex trafficking.” This was a huge list. It was like 100 plus words. And some of them were things like young or teen but you can be 18 or 19 and still be a teenager and still advertise that.

Also, lots of sex workers who are a little bit older than that say that they’re that age because like it or not, that may be an effective marketing technique. People will say they’re young. It doesn’t necessarily mean they’re underage. So, there were all these words like that that they pressured Backpage into not allowing on their website and trying to comply with them. The moderators at one point said, “Okay. We won’t allow those words if you think that those words are bad.” And then, therefore, they would strip those words from ads or they would tell people they couldn’t post those words in those ads.

And then, when they did that, you had the government say, “Oh, my gosh. They’re allowing ads that they knew were for child sex trafficking.” And it was like it was never the moderators and it was never the Backpage executives saying, “We know that these are words for child sex trafficking.” It was them saying, “Fine. We’ll accept your overly broad speech squelching idea of this just to be overly cautious.” And then, banning those words and then, the government yelling at them for banning those words. So, it was, again, sort of a bait and switch.

Ronnie London: And it’s a constant arms race. You’ve cleared your spam filter occasionally. You’ve seen what the subject lines of spam look like with dollar signs instead of S and misspellings and whatever else. So, you develop a list and you – let’s say you start with the list of 150 and you either explicitly or implicitly indicate what terms are not permitted. Well, those who want to circumvent your protections will then try something else. And so, you have to add that to this list. And this was a constantly growing list of things that Backpage tried to block.

And the government would turn around and say, “Well, look how big the list is. Surely that must indicate to you that there’s a big problem here.”

Nico Perrino: You see this in other context, too. For example, in China, where you have the Great Fire Wall and you can’t criticize Xi Jinping, they refer to him as Winnie the Pooh to try and get around the filters. And you see this on Tik Tok [inaudible - crosstalk] [00:30:31]. Yeah. And you see this on Tik Tok all of the time where sex will be spelled with the X as a dollar sign or something to try and avoid the content filters that exist there. So, it’s always that the content moderators are trying to catch up with the creativity of the content creators.

And it’s just impossible. One of the things that strikes me about this case is how collaborative Backpage was with law enforcement. And I think I read somewhere, Elizabeth, in your piece about how law enforcement would say, “No. We can’t go after Backpage because they’re very collaborative with us and they help us get these sex traffickers. And they implement credit card requirements for these ads so it makes them easier to track,” while at the same time acknowledging that if Backpage leaves, there will likely be other places that these advertisers will go.

And you might have platforms or publishers perhaps out of the United States that will be less willing to play ball on the illegal, underlying conduct.

Elizabeth Nolan Brown: Yeah. I think that’s one of the things that’s like fundamentally misunderstood or misrepresented is the idea that – no one is really arguing that no, nothing terrible ever was advertised on Backpage. You couldn’t know if someone actually was underage. You couldn’t know if someone actually was being forced or coerced into prostitution or any sort of sex work, into legal sex work. People are coerced into stripping and things like that, too. But in cases where that was known, they did help out.

And so, I think the political argument was always if we just take these ads off Backpage, not only will there not be new sites that crop up to take their place but this stuff will stop happening. And that’s just a really insane thing to think. Obviously, the bad stuff is still happening, even if you can’t see it on this one particular site. And it is going to migrate to sites that are going to be less responsive to government requests, less willing to help out.

Robert Corn-Revere: That is exactly what happened. The advertising that closed down on Backpage immediately popped up on a lot of other sites, including foreign sites. You did have some of the more honest law enforcement agencies acknowledging that they were now no longer able to effectively investigate instances of child sex trafficking because they no longer had the cooperation of a site like Backpage. Occasionally, you would see those kinds of acknowledgments pop up in news accounts but sadly more rarely than it actually happened.

And one of the only places where you could find full reporting of this whole issue was at Reason and through Elizabeth’s pieces that she wrote for Reason.

Nico Perrino: So, I want to turn now, we’re 30 minutes into this, to talk about Section 230 of the Communications Decency Act, which was a big defense, I’m assuming, of Backpage. So, I’m wondering maybe, Ronnie, if you can explain what Section 230 is and how it protected or should have protected the editorial rights or the existence and third party content that existed on the platform.

Ronnie London: Yeah. So, Section 230 that you refer to is Section 230 of the Communications Decency Act. It’s codified in Section 230 of the Federal Communications Act. It was adopted as part of the ’96 Telecom Act when the internet was really getting revved up and becoming a thing. Basically, what it says is if you are an online computer service, i.e., websites and now apps and social media, there’s two parts of it, the first part is you can’t be treated as the publisher of any content that is of a third party.

So, if you didn’t create or contribute to content then, you have immunity from liability, unless, of course, you contributed to in some way, shape, or form what made it unlawful. Even if you do some editing or do some moderating but you don’t change it in a way that contributes to the unlawfulness or the legality, you don’t have liability. Second, there is an immunity from if you choose to take things down or not platform things, you have an immunity against being told that you had some sort of obligation to put it back up or to carry it.

So, that’s Section 230. And Section 230, putting aside the federal criminal trial of Backpage for a minute because it actually didn’t have application there because Section 230 gives you immunity from, basically, all civil liability – at least originally, all civil liability and all state liability criminal or civil.

So, when the state AG’s, for example, would try and go after Backpage with civil investigative demands or state legislators would pass new laws targeting online advertising worded in a way that oddly enough really only captured the kinds of things Backpage were doing, courts routinely struck the down both on constitutional grounds but also on grounds that they’re preempted by Section 230. When people who claim to have been trafficked on Backpage tried to bring civil claims against Backpage for contributing to the harm that they suffered, those claims were also routinely held to be preempted by Section 230.

Now, the funny thing is the – funny is not the right word probably. But the odd thing is Section 230 has never applied to federal criminal liability. And for years, law enforcement and politicians would say, “Oh, we’ve got to do something about Section 230. It’s letting Backpage skate. It’s enabling all of this trafficking.” And so, you had ultimately the passage of Fosta and Sesta, which were two pieces of legislation that carved out from the state immunity and the civil immunity trafficking offenses and lawsuits for trafficking.

And so, almost concurrently with the indictment being brought against Backpage and the government seizing the company and the servers and everything else, you had the signing ceremony for Sesta and Fosta for this great legislation that was finally going to let them go after Backpage. But that was a myth. It was never needed in the first place. And as Bob and Elizabeth have already described, the counts in the indictment were solely about federal facilitating prostitution crimes and money laundering in connection with those crimes, which the government could have brought at any time.

So, not only did the government use Backpage as kind of a punching bag for this alleged sex trafficking problem, they also used it to get the camel’s nose under the tent to amend Section 230. And now on Capitol Hill, you hear ideas for amending Section 230 left and right to deal with the so-called social media problem.

Nico Perrino: Was there a similar protection for these publishers prior to the internet like when Village Voice was just publishing classified ads? Was there a Section 230 for the analog age or because it required more to actually publish them in the pre-internet age, it did not exist.

Robert Corn-Revere: Well, it did require more to actually publish them. And you had the possibility of publisher’s liability. But you had to have specific knowledge. And in the internet context because you have the ability to publish third party speech before you have a chance to review it, that’s why Section 230 was necessary as a way of immunizing platforms that would never take a chance on allowing third party speech where they have millions of posts and can’t review them if they are going to be held responsible either in criminal law or civil law for what other people post on their platform.

Nico Perrino: Yeah. That volume problem is one of the reasons that Jeff Kosseff and his book on Section 230 titles it The Twenty-Six Words That Created the Internet. Given the volume of posting that happens on the internet, you could not have social media if you did not have Section 230.

Interviewee: And that’s why people – one of the biggest misunderstandings about Section 230 is that it protects a lot of speech that otherwise maybe wouldn’t be protected by the First Amendment. And it’s simply not true. A lot of these cases that turn on Section 230, if they fought them out in court, they would ultimately – the companies would ultimately prevail on First Amendment grounds. It’s just that Section 230 stops them from having to fight out this really long, prolonged trial in court because they could always say in summary judgment, “No. Section 230 is going to prevent this.”

So, Backpage, Craigslist, social media companies wouldn’t have to fight these huge court battles over every user generated content. So, it’s sort of a shortcut to protect people.

Ronnie London: And by the way, if the speech was unprotected or otherwise legitimately a source of liability, the fact that you give 230 immunity to interactive computer services doesn’t mean that there isn’t someone that you can hold liable or charge for the unlawful speech. It’s the speaker. It’s not the publishing platform that allows them to publish. There were to models, I think, that when the internet first started becoming part of common, modern day life, there were two models. We have a line of cases that’s like bookstores.

And we don’t charge the owners of bookstores for shelving a book that has defamatory content or obscene content unless you can show knowledge of what’s actually in the books. And that’s really hard because most bookstores, especially if they’re dealing in volume, they’re not looking inside of every single book that they shelve.

The other model would be like the newspaper model where even if you publish an ad like Heed Their Rising Voices that contains falsehoods, if you can get over the hurdle of the constitutional protections for liable and defamation, the newspaper could be liable along with the people who placed the ad. And so, the question was which model are we going to use for the internet.

And I often envision kind of an alternate history where you never adopt Section 230 and we have decades of battles and caselaw where you eventually get to the bookstore model because of the problem of scale and scope on the internet. Section 230 just allowed us to get there that much more quickly and allowed online business and online commerce to happen much sooner than it otherwise would have because you wouldn’t have sites like Amazon or Yelp or anywhere where third party content would be permitted if the service had to review every piece before it went up on pain of being liable for it.

Or alternatively if they did, what they allowed up would be so much more constrained than what they would allow when they knew that they had immunity if they didn’t contribute to the problems that the content presents.

Nico Perrino: Yeah. I don’t know what I would do for Christmas if I didn’t have Amazon. So, I’m very thankful for Section 230. I’ve got three more topics that I want to touch on quickly before we close up. One of them I think I read in your piece, Elizabeth, your profile from 2018 that’s a quote. “Banks received increasingly stern warnings from federal financial regulators about doing business with sexually oriented enterprise, part of a program called Operation Choke Point. Major institutions like Chase suddenly terminated their relationships with Backpage and many others from porn performers to condom companies.”

Bob, this sort of thing is before the Supreme Court this term, right. That’s pretty much NRAV [inaudible] [00:42:13] or in many ways.

Robert Corn-Revere: Yeah. There’s that kind of job owning in the First Amendment context where you have the government going to businesses, supporting businesses, and saying, “You really don’t want to do business with these people because they engage in bad speech.” So, that kind of issue is really significant. And it’s also something that has been part of the history of this case from the beginning. As I mentioned earlier, Ronnie and I handled the case against Sheriff Dart where he simply leaned on the credit card companies and said, “You guys don’t want to do business with Backpage. They’re very bad.”

And that’s where the Seventh Circuit shut that down rather quickly saying that the First Amendment prohibits that kind of leaning on a particular business. But here’s a weird way in which the phenomenon that you’ve discussed plays into the odd verdict that came out of the trial in Phoenix. And that is there was that kind of direct pressure on financial institutions generally. But on Lacy and Larkin’s personal bankers, they would have FBI agents visiting their banks, banks which Lacy and Larkin had had lifetime relationships with.

And they would tell the bankers, “You really don’t want to be doing business with these guys.” And as a result, they were, essentially, being de-banked by various institutions. Again, it’s hard to say that it’s funny in this context but the one charge on which the jury returned a verdict against Mike Lacy was in, as you mentioned earlier, Nico, international concealment of money laundering. Now, here’s what underlay that. As I said, they were putting pressure on domestic banks not to do business with them.

And so, Mike Lacy transferred some money to a foreign bank, fully reported it to the IRS on the required financial forms. The jury declared that he was not guilty of money laundering. And yet, the one charge on which they found him guilty was concealment of money laundering. Now, if there’s no underlying crime – money laundering is known as banking. It’s simply not a crime. So, the jury’s finding is completely inconsistent with its other finding of no money laundering. And it’s also a product of the government’s illegal campaign to shut down their access to domestic banks.

Elizabeth Nolan Brown: That’s what’s so crazy about so many of the money laundering charges that they have in the prosecution of Backpage is that a lot of them are predicated on things that they had to do because of the government’s pressure on banks. When Sheriff Dart, the case they represented, got the credit card companies to stop doing business with them, they encouraged people to use Bit Coin or checks to pay for ads. Then, the government used that as evidence of money laundering in their case. They moved their money because they were –

Robert Corn-Revere: I don’t know how they were trying to evade. Exactly.

Elizabeth Nolan Brown: And a thing that we’ve reported on, too, at Reason a lot is that this isn’t just happening to Backpage. This is happening to all sorts of sex workers. But it’s also not just happening to sex workers. You have them exerting the same pressure on people who sell guns or ammunition and things like that. You have the same sort of play book that they went through with sex workers and Backpage going on with all sorts of – any industry, basically, that is sort of disfavored by people in power can have this happen to them.

Nico Perrino: The thing that’s interesting to me and maybe this is because I’m not a lawyer and I’m not as familiar with criminal proceedings as I am with maybe civil given the nature of FIRE’s work, law enforcement came in and seized all of their assets, right?

Robert Corn-Revere: Right.

Nico Perrino: Even going so far as to seize the home of someone who either Larkin or Lacy had lent money to to help buy the home, some grandma or something. So, I don’t know. At that point, they hadn’t been convicted of any crime.

Robert Corn-Revere: That’s right.

Nico Perrino: And then, all of their assets are seized. And now, they can’t put up a robust defense because they don’t have their assets to defend themselves against the charge that they haven’t been convicted of yet. So, it just boggles my mind. I know it’s – I’ve heard about this in other contexts. I know the courts have said that law enforcement can do this. But I just don’t understand how this isn’t punishment before conviction, right.

Robert Corn-Revere: Well, it is. And the asset seizure was part of the case that I worked on. And it is more vile than even you have described it. When Lacy and Larkin were arrested, there were swat teams and federal agents coming in and with instructions to seize anything of value they could find.

Ronnie London: Evidence of wealth.

Robert Corn-Revere: Yeah. Any evidence of wealth, artwork off the walls, anything like that. The origin of that federal authority came with RICO statutes that were designed in the 1960s to fight organized crime. But the issue is really something that was designed to go after if you find money from drug sales or illegal weapon sales or things like that. What you’re talking about here are proceeds of a publishing enterprise. And there is abundant caselaw that when you’re talking about seizing publishing products or the proceeds of publishing products that those are protected by the First Amendment.

You don’t get to assume your conclusion. You don’t get to assume guilt and, basically, impose the punishment beforehand. But what was particularly evil about this approach is that the government’s approach was designed specifically to deprive the defendants of a defense and to deprive them of the ability to defend themselves because they didn’t just seize their assets. They went after the trust accounts that the defendants’ law firms had and made it impossible for them to pay lawyers.

And so, you had a much more difficult ability by the defendants to mount any kind of defense, which makes the verdict that the government got from this case after its first mistrial all the more puny and almost laughable in terms of all of the counts they loaded on to begin with.

Ronnie London: And don’t forget, Larkin and Lacy were involved in the alt weeklies for decades before Backpage. And they made a nice living doing it. They made money. They were, ultimately, able to buy the fabled Village Voice and bring it within the stable of the alt weeklies. And clearly, none of those funds and none of the things that those funds bought were in any way connected to the Backpage website that the government was seizing and bringing criminal charges on. And they seized all of those assets as well.

It’s funny. We’ve got some folks currently, if you want to think about how terrifying this model could be, we’ve got some folks currently up on Capitol Hill not far from here, saber rattling against newspapers. “Did you provide material support to terrorism?”

If DOJ gets in its mind that it's got enough evidence to show that one of these newspapers provided material support to terrorists, there’s nothing stopping them from using the same play book to go in and seize the proverbial and probably the literal printing presses and then, say, “Okay. Now, we’re going to put you on trial for providing material support. And only if and when you can get acquitted will you get any of your stuff back.”

Robert Corn-Revere: Yeah. The other thing, too, is they seized the website on the day of the arrests and, basically, deconstructed it. And in the process, they made it impossible for the defendants to put together the information about all of the cooperation they had been providing and the ways in which moderation actually worked.

Ronnie London: And dismantling a website is a pure prior restraint. And if you have a prior restraint to the extent that they’re lawful at all, you’re supposed to have rapid appeal with the government bearing the burden of proof. And here we are how many years later just getting to a verdict that is a mixed and, quite frankly in my view, a pretty skimpy verdict in the face of the indictment.

Nico Perrino: Yeah. So, let’s talk now. Let’s close up here by talking about the verdict. We already talked a little bit about the international concealment money laundering charges and convictions. There were also convictions for some of the staff or executives surrounding the Travel Act, which I’m not too familiar with. I’m not sure what that means. And then, the facilitation of prostitution. So, I’d like to hear from you three in kind of an open ended question about what’s your first blush of the verdict/month were and where we go from here.

Maybe we’ll start with you, Elizabeth.

Elizabeth Nolan Brown: I think that there is still a lot of miscarriage of justice happening in the verdicts. Lacy was found, like we’ve said, guilty on one count. He was found not guilty on one count. And the jury couldn’t agree on the other 84 counts. So, that does leave open the possibility that the government could try him again for a third time on these same charges.

Nico Perrino: And we should say that Lacy here, despite being found guilty of that one count, international concealment and money laundering, can spend the rest of his life in jail because I think it can carry a maximum sentence of 20 years if I remember correctly.

Elizabeth Nolan Brown: Yeah. And he’s in his 70s. Yeah. Definitely. And two of the defendants were found guilty on multiple charges of money laundering and one of them on facilitation of prostitution. And then, two of the defendants were found entirely not guilty. So, that was good. But all of the other things, all of the other guilty charges, I think, are pretty unwarranted.

But also just to be a little bit positive, well, I don’t know if you’d call this positive or not, but I think the fact that they were able to prove so few of their charges and get so few convictions relative to what they tried to bring, there were over 100 counts in this indictment, really shows the bankruptcy of the government’s case. The fact that they charged all of these things that they have pulled out, like we said, very dirty trick in their book over the years, including the asset forfeiture and everything, and that they were still not able to get the conviction they wanted really tells us something.

Nico Perrino: It looks like we lost Liz briefly there. While we’re waiting for her to come back –

Robert Corn-Revere: But just to pick up on what she was saying, I agree with her point that this shows the poverty of the government’s case and its inability to actually make the case on these 100 counts that they brought back in May 2018 and for Mike Lacy in particular.

After a first mistrial, now to have a mistrial on 83 counts of the entire substance of their claim against him, a not guilty verdict on money laundering, and the only thing in which they got a finding of guilt from the jury is this “international concealment of money laundering,” which raises the question if the money laundering didn’t happen in the first place according to the jury, how do you have a concealment for a transaction that you fully reported to the IRS?

On the others, the employees, Joy Vott and Andrew Padilla, they were found not guilty on all 51 counts on which they were charged. And I should say that those employees were both offered a sweetheart deal from the government to walk away entirely if they would turn state’s evidence. And in particular, Joy Vott said, “I will not lie for you,” and turned down that sweetheart deal that the government had offered her. And the jury saw the government’s tactic for what it was and found that both of those employees were not guilty.

For the other two, the chief financial officer, Jed Brunst, he was found guilty on one count of conspiracy and 30 counts of money laundering but no counts under the Travel Act. And I’ll get to your premise question here in a second about that. And that’s where the vice president, Scott Spear, was found guilty on 18 counts under the Travel Act and 1 count of conspiracy and then, also a number of counts on money laundering. Now, the Travel Act was something passed back in 1959 or 1960. It also refers to the Man Act where you’re talking about transporting women across state lines for immoral purposes.

But the Travel Act is something that can be used to bring federal charges against interstate crimes, even if they’re in support of certain specified state crimes. So, if you’re facilitating those crimes and you travel across state lines, hence the name Travel Act then, you can be found guilty under that federal provision.

Now, as Ronnie mentioned earlier, the federal government could have brought charges against Backpage whenever since Section 230 doesn’t immunize anyone under federal criminal law but for a variety of reasons, including the fact that this earlier investigation that Liz reported on and the government did its memos on, they concluded they really didn’t have a case. It was only in 2018 finally, after Backpage and its executives had won a string of First Amendment victories, the political pressure to bring some kind of action to crush them simply got too great.

And that led to the series of events that led to this prosecution.

Elizabeth Nolan Brown: Yeah. And just to jump in real quick – could I just say real quick that a lot of –

Nico Perrino: Go ahead, Liz. We lost you for a second.

Elizabeth Nolan Brown: I just wanted to say a lot of people assume that maybe they, ultimately – they weren’t doing the bad things back in the day but then, they did things bad in 2016 or 2017 or 2018 and that’s why the charges were brought. But a lot of this conduct that they’re referring to took place before those early memos were written in the early days of Backpage. So, it’s not as if they just got new evidence that made them bring it eventually.

Robert Corn-Revere: Absolutely right.

Nico Perrino: So, Liz, we had lost you for a second. Did you have anything else you wanted to add before we give Ronnie the last word here?

Elizabeth Nolan Brown: No. Go ahead. I’m not sure where I cut out.

Nico Perrino: Very good. Okay. Ronnie.

Ronnie London: I just should add that you mentioned the sweetheart deal that she turned down to turn state’s evidence. But this whole case was built on the president of Backpage turning state’s evidence. What happened was Lacy and Larkin sold out to the president who, ultimately, turned state’s evidence. And so, he was given a great deal to testify on behalf of the government. He, essentially, allowed them to seize the servers and seize the apparatus of the company. And yet, even with that help, they got the paucity of convictions that they got in this most recent trial.

Robert Corn-Revere: Yeah. And just one thing to add and that is we haven’t heard the end of this story. There are pending motions for judgment notwithstanding the jury’s verdict and particularly where you have conflicting findings from the jurors saying there was no money laundering but there’s international concealment. I think that those are strong motions. And I think all of the defendants that had convictions have motions pending that we’ll see what happens.

Ronnie London: And there’s also the evidentiary rulings pre-trial that could be grounds for appeal.

Robert Corn-Revere: That’s right.

Nico Perrino: Go ahead, Elizabeth.

Elizabeth Nolan Brown: A big picture thing that I think is important to remember, too, especially for FIRE audiences is that I think a lot of this was done because the government and prosecutors knew that this would be a good test case because if you say it’s about prostitution or especially if you say it’s about sex trafficking, people are just going to say, “I don’t want anything to do with that. I’m not going to defend it. I’m not going to look too closely at it,” whatever. And it was a test case.

Can we use this sort of prosecution? Can we use this political pressure to either amend Section 230 or go after other sorts of online companies that allow user generate speech? Can we get away with this? And I think that we’re seeing now that they’ve already moved on to doing this against companies that have nothing to do with sex because they were able to perfect this play book or at least test it out with Backpage.

Nico Perrino: I’m not too familiar with criminal proceedings. Bob, when you referenced motions and, Ronnie, when you referenced appeals, is there a possibility that some of these convictions could be overturned?

Robert Corn-Revere: Yes. It is possible. As I say, I think there are strong arguments for it. It’s up to the trial court judge. But then, once that decision is made, it will then, of course, be subject to appeal to the U.S. Court of Appeals for the Ninth Circuit. One thing I should say about this current trial judge is that so many of the pre-trial rulings were so biased toward the prosecution. It’s amazing that there were so few convictions under these counts as there were.

For example, the defense lawyers were not permitted to, basically, mention the First Amendment and not permitted to tell the jury about the many First Amendment victories that Backpage had won in arguing why they were not liable for violating criminal law for the speech.

Nico Perrino: So, I appreciate all of you coming on, unpacking this case that, Bob, as you mentioned – or Elizabeth, excuse me, as you mentioned, some people might have avoided because of the underlying allegations. It clearly has important implications for free speech, the First Amendment, the right of publishers, and a free and open internet. I would urge folks who want to learn more about this case and see some color surrounding the meaty discussion we had to read Elizabeth’s 2018 profile of both Larkin and Lacy and Backpage in general.

And in the meantime, we will stay tuned and see how these motions and appeals play out and be sure to update our listeners as the case progresses. Again, a reminder. Today, we were joined by Elizabeth Nolan Brown. Elizabeth is senior editor of Reason Magazine and has, as you heard, a new newsletter coming out. So, you’ll want to subscribe to that. Elizabeth, thanks for coming on the show.

Elizabeth Nolan Brown: Thank you for having me.

Nico Perrino: Bob Corn-Revere, Ronnie London. Bob, of course, FIRE’s chief counsel and Ronnie our general counsel. Bob, Ronnie, thank you both, again, for coming on the show.

Robert Corn-Revere: Thank you, Nico.

Ronnie London: Always fun.

Nico Perrino: This podcast was hosted by me, Nico Perrino, and produced by Sam Neiderholzer and myself. It’s edited by my colleagues, Erin Reese and Ella Ross. You can learn more about So to Speak by subscribing to our YouTube channel where you can also watch a video of this conversation. You can follow us on Twitter and Instagram by searching for the handle “Free Speech Talk,” around Facebook at Facebook.com/SotoSpeakPodcast. And you can also send us email feedback at Sotospeak@thefire.org. And if you have a thought for our guests today, I will be sure to forward those along to them.

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