Senate Banking, Housing, and Urban Affairs Committee
On September 19, the Senate Banking, Housing, and Urban Affairs Committee held a hearing on combating child pornography by eliminating pornographers’ access to the financial payment system. The hearing focused on credit card transactions and “shell” corporations (a legal business with no significant income or assets) that facilitate the production, purchase, and sale of exploitative images of children on the Internet.
In his opening statement, Chair Richard Shelby (R-AL) said child pornography has become a “multibillion dollar industry worldwide because it is low-risk and highly profitable. The sad truth is that there is a large and growing demand for these disturbing images.” He emphasized the need for collaboration between law enforcement and financial institutions, saying, “An important key to combating this national cancer is to follow the money just as we do in organized crime.”
Ranking Member Paul Sarbanes (D-MD) said, “The pain that results from producing these [child pornography] images is difficult to contemplate. Without access to a payment system it is reasonable to believe that the child pornography industry would shrink and perhaps die. That is why it is so important to follow the money.” He concluded his remarks saying he was “encouraged that legitimate financial businesses are working to end payment to these sites.”
“While the Internet is undoubtedly one of the greatest inventions of our generation, it has also, unfortunately, greatly facilitated the sexual exploitation of children,” said Attorney General Alberto Gonzales. “By providing pedophiles a cloak of anonymity, extremely rapid communications, and access to potential victims, the Internet has made it easy for pedophiles to commit these crimes, and, in many cases, to profit from them…Moreover, by enabling pedophiles to use credit cards and other forms of payment to purchase child pornography, the Internet has greatly contributed to the commercial trade in child pornography images.” He continued, saying, “The scope of these dangers facing our children is immense…And you can get a sense of the explosive increase in child pornography fueled by the Internet from the fact that from 1998 to 2004, the National Center for Missing and Exploited Children’s Cyber Tipline experienced a thirty-fold increase in the number of child pornography reports.”
Attorney General Gonzales detailed a number of prosecutions of online child pornography businesses by the Department of Justice. He noted that while the recently enacted Adam Walsh Child Protection and Safety Act (see The Source, 7/28/2006) gives the Department of Justice new power to monitor sex offenders, more needs to be done to protect children. Attorney General Gonzales mentioned four possible strategies: increasing the penalty for Internet service providers (ISPs) who knowingly and willfully fail to report violations of child pornography laws; requiring warning labels on sexually explicit websites; extending administrative subpoena power to obscenity investigations; and charging child pornographers under federal organized crime or money laundering statutes.
Sen. Shelby asked Attorney General Gonzales what the Department of Justice was doing to work with other countries: “As you know, many countries do not have statutes prohibiting [child pornography] or penalties. What kind of collaborative efforts are underway with international governments to combat this problem?” The attorney general said that he was “working with the E.U. [European Union]” and consulting with his foreign counterparts. He also said that the Senate’s ratification of the Convention on Cyber Crimes Treaty will help the Department of Justice gather information on international child pornography crimes.
Sen. Debbie Stabenow (D-MI) asked the attorney general how he expected to combat the problem with an increasing caseload. Sen. Stabenow noted that the National Center for Missing and Exploited Children had “24,000 Internet-related complaints in 2001; by August of this year, the number was 375,000.” She asked if additional resources would be needed. Attorney General Gonzales said, “Yes, we need more resources. We have to be smart in utilizing the resources Congress gives to us.” He said that the Adam Walsh Child Protection and Safety Act authorized additional prosecutors and computer forensics experts and noted that “there is a serious backlog because we don’t have enough computer forensics experts.”
Ernie Allen, president and chief executive officer of the National Center for Missing and Exploited Children (NCMEC), told the committee that “according to NCMEC data, 19 percent of identified offenders had images of children younger than three years old; 39 percent had images of children younger than six years old; and 83 percent had images of children younger than 12 years old.” Mr. Allen described the creation of the Financial Coalition Against Child Pornography (FCACP), a group of child advocates, law enforcement officials, and financial institutions collaborating to stop the production and sale of child pornography. He said the goal of NCMEC and FCACP is to “aggressively seek to identify child pornography sites with method of payment information attached. Then we will work with the credit card industry to identify the merchant bank. Then we will stop the flow of funds to these sites.”
Head of Risk and Fulfillment for Bank of America Kim Mowder said, “Bank of America has a zero tolerance for anything related to child pornography. We believe strongly that our investigations and due diligence procedures provide assurance that no undesirable merchant activities are being processed through our service and we work closely with card associations to close any merchant [accounts] they identify as posing a risk. Finally, we support the collective efforts of the coalition [Financial Coalition Against Child Pornography] and of this committee to ensure the legitimate electronic payments industry is neither wittingly or unwittingly facilitating the sale of online child pornography.” Mark McCarthy, senior vice president for public policy at VISA, Mike Denoma, group executive director of Standard Charter Bank; and Jodi Golinsky, vice president of MasterCard Worldwide, also testified as to their respective employers’ anti-child pornography due diligence standards.
Senate Commerce, Science, and Transportation Committee
Also on September 19, the Senate Commerce, Science, and Transportation Committee held a hearing on Internet-based child pornography.
Assistant Attorney General Alice Fisher said, “It is critical to recognize that virtually all images of child pornography depict the actual sexual abuse of real children. In other words, each image literally documents a crime scene.” Ms. Fisher detailed the Department of Justice’s Project Safe Childhood initiative. The initiative “helps law enforcement and community leaders develop a coordinated strategy to deter, investigate, and prosecute sexual predators, abusers, and pornographers who target our children. It will do so by creating, on a national platform, locally-designed partnerships to investigate and prosecute Internet-based crimes against children.” In addition to Project Safe Childhood, Ms. Fisher described the Department of Justice’s Innocence Lost initiative, Obscenity Prosecution Task Force, and ongoing collaboration with Immigration and Customs Enforcement.
Sheriff Mike Brown of Bedford County, Virginia, testified about his work with the Internet Crimes Against Children Task Force (ICAC). Mr. Brown told the committee that Congress could help ICAC by “ensur[ing], through hefty fines, that communication service providers report the presence of child pornography on their systems, and do so in a timely manner; improve the date retention requirements for all ISPs (Internet service providers); and encourage foreign governments to crack down on child porn in their countries and to work with our law enforcement agencies, not only our federal agencies but our national ICAC Task Forces.”
Dr. Sharon Cooper, an adjunct professor of pediatrics at the University of North Carolina, testified as to the long-term effects of sexual exploitation and abuse on children. Dr. Cooper told the committee that “research from the Kaiser Permanente system in California has confirmed that adverse childhood experiences, such as sexual abuse with pornography production, has lifelong negative physical, reproductive health risk behaviors, such as smoking, drinking, drugs, and obesity and mental health impact.” Dr. Cooper recommended that child sexual abuse prevention strategies as well as online and communication technology safety strategies be mandated in the health classes of public schools. She also urged Congress to increase block grant funding to states for programs that provide “housing and education to marginalized youth who are being exploited through prostitution.”
Ernie Allen, the president and chief executive officer of the National Center for Missing and Exploited Children, also testified.
House Energy and Commerce Subcommittee on Oversight and Investigations
On September 21, the House Energy and Commerce Subcommittee on Oversight and Investigations held its sixth hearing on online crimes against children. The hearing focused on alternate methods of payment that may be used to purchase child pornography over the Internet as well as the need for Internet service providers (ISPs) to retain customer service records for investigatory purposes.
Chair Ed Whitfield (R-KY) said, “Federal and state law enforcement officials need more resources to combat online crimes against children…We must work aggressively to put child pornographers out of business.” Chair Whitfield said that a two year retention of IP (Internet protocol) — a unique number that electronic devices use in order to identify and communicate with each other — addresses by ISPs would aid investigators.
“The problem of child pornography is of great concern to all members of Congress–Democrats, Republicans, and Independents,” said Ranking Member Bart Stupak (D-MI). “Parents expect us to protect their children from the 50,000 predators that the FBI [Federal Bureau of Investigation] says are on the [Inter]net right now.”
Christopher J. Christie, U.S. Attorney for the District of New Jersey, testified about his experience with the RegPay case. The RegPay case, which began in early 2003, was an international investigation that targeted the operators of commercial websites offering access to child pornography over the Internet and to track the financial trails of persons profiting from the production and sale of child pornography. The investigation was traced to producers in Belarus; law enforcement officials were able to lure the producers to France and Spain where they were arrested and extradited to New Jersey. He urged other law enforcement officials to duplicate the investigative techniques, to collaborate with international officials, and to pursue all reports of online child sexual exploitation promptly and thoroughly.
Arne Christenson, senior vice president for government affairs at American Express; Mark McCarthy, senior vice president for public policy at VISA; Kim Mowder, head of risk and fulfillment at Bank of America; Joe Sullivan, associate general counsel at PayPal; Dr. Douglas Jackson, chairman of E-Gold; David Strider, executive vice president at U.S. Bancorp; William Matos, senior director for credit and risk at Chase Paymentech Solutions; Ralph Shalom, associate data counsel at FirstData Corp.; and Jodi Golinsky, vice president of MasterCard Worldwide, testified regarding their respective company’s investigatory procedures designed to prevent financial payment for online child pornography.
Also testifying were Ernie Allen, president and chief executive officer of the National Center for Missing and Exploited Children, and James Plitt, director of the Cyber Crimes Center Office of Investigations for the U.S. Immigration and Customs Enforcement.
