Strange Bedfellows: Sex Trafficking and Investment Banking

On Saturday, New York Times columnist Nicolas D. Kristof ran a story on financiers and sex trafficking. Blogging While Blue has previously posted commentaries on sexual trafficking in Georgia and the impact that it has the on lives of young women and girls, so we were interested in his story. What we discovered was this was more than a story about trafficking, it was a story about who are some of the silent partners that finance this illegal trade.

Surprisingly, one of the private equity owners of Backpage.com was Goldman Sachs who held a 16 percent investment in the company. Backpage.com is similar to Craigslist. There are listings from Atlanta to Washington, DC for real estate, items to trade and sell, services and an adult section with escorts. It is the Backpage.com escort section that Kristof says has some 70 percent of the prostitution market ad business. While companies like Craigslist and Backpage make an effort to screen ads by traffickers, there is little documented success.

One of Goldman Sachs managing directors sat on the board of the company according to Kristoff while the private web based prostitution empire was growing its share of the trafficking business. The managing director resigned in 2010 but that was four years after Backpage.com merged with Village Voice Media, the current owners of Backpage.com

It is hard to imagine that underage sexual trafficking would be backed by Goldman Sachs investments. Once Kristoff began inquiring about the investments, and uncovered the owners Goldman Sachs began selling its shares.

There seems to be a lot of talk about Super PACS owning politics and the debatable relationship between politics and financiers. It’s another thing when smart seemingly sensible leaders in business and civic life unknowingly make money in sex trafficking. Its time for them and us to ask basic questions and fact check our business interests otherwise our children are fair game for the worse we can offer.