We were waiting until all the documents were circulated. This hearing will now come to order. Senator mccaskill and i have called this hearing to address the difficult but really important subject of sex trafficking. Over the past seven months the city has conducted a bipartisan investigation into how sex traffickers increasingly use the internet to advance their trade and evade detection. The name of this investigation is very straightforward. We want to understand how lawmakers, Law Enforcement, even private businesses can more effectively combat the serious crime that thrives online in this black market. As cochair of the Senate Caucus to end Human Trafficking and maybe more importantly is someone who represents the state has experienced some abhorrent sex trafficking networks, and maybe most importantly as a father, this is an issue i feel strongly about and have worked on over a number of years. I have spent time with those dedicated to fighting this crime and those victimized by it. For victims, the toll of sex trafficking is measured in childhoods stolen and has accounted for lots of dollars. Its a problem that i believe congress should pay more attention to. Precise data is hard to come by because this market exists in the shadows, but experts say there are as many as 27 million victims of Human Trafficking last year, including 4. 5 Million People trapped in Sexual Exploitation. In the United States, about eight of every ten suspected incidents of trafficking involve sex trafficking, 80 . Thats the sale of minors or for sale of adults for commercial sex. Sex traffickers prey on the vulnerable. The department of justice has reported that more than half of the sex trafficking victims are minors and the problem appears to be getting worse. Over the last five years the leading authority on Child Exploitation, the National Center for missing and exploited children that well hear from later today reported an 846 increase in reports of suspected child sex trafficking. The increase is, quote, directly correlated to the increased use of the internet to sell children for sex. Thats what this hearing is all about. Traffickers have found refuge in new customer websites that special in advertising socalled ordinary prostitution. And lawful escort businesses. A business called backpage. Com is the Market Leader in that industry. With the annual revenues in excess of 130 million last year, with a look and layout similar to craigslist. Com, backpage has a special niche. According to one industry analyst, in 2013 eight out of every ten dollars spent on commercial advertising goes to backpage. Eight out of ten dollars. Some of the advertising is legal. Much of it is illegal. A federal court in chicago noted that backpages Adult Services section overwhelmingly contains advertisement for prostitution including the prostitution of minors, end quote. The Public Record indicates backpage sits at the center of the online black market for sex trafficking. The National Center says that backpage is linked to 71 of all suspected child sex trafficking reports that it sees from the general public through cyber tips online. Think about that, 71 of all the suspected child sex trafficking reports that the center gets are related to backpage. According to a leading antitrafficking Organization Called shared Hope International, Service Providers working with sex trafficking victims have reported between 80 to 100 of their clients have been sold on backpage. Com, end quote. Its easy to see why the National Association of attorneys general described backpage as a hub of Human Trafficking, especially the trafficking of minors. Well hear more about that today. A recent study of press accounts reveals that scores of serious crimes are linked to backpage. Shared Hope International has more than 400 cases of children being trafficked using backpage across the state. On this record, psi saw a compelling need to better understand the Business Practices of backpage. Com. S especially the efforts it takes to limit the use of traffickers on their site. That seems very reasonable and thought it would be simple enough because backpage holds itself out as a critical ally against Human Trafficking. The company has stated it, quote, leads the industry in its review and screening of advertisements for illegal activity. A process it called moderation. Backpages top lawyer has described its moderation process as the key tool for disrupting and eventually ending Human Trafficking via the worldwide web. But backpage refused to turn over documents about this key moderation process that it touts as well as other aspects of its business. Specifically, the Company Refused to comply with a subpoe subpoena. July 7th says it have overbroad. Senator mccaskill and i agreed to withdraw the subpoena. We targeted a new subpoena to accommodate some of backpages concerns but the Company Refused to apply. Defiance of a congressional subpoena is rare and its serious. Backpage has tried to excuse its noncompliance based on a sweep of unconstitutional privilege. The companys argument is vague but summed up this way, backpage says the First Amendment to the constitution shields it from this investigation of advertising by sex traffickers because it also publishes some lawful advertisements that are protected speech. Its an interesting argument. It has no support in law or logic. In a detailed ruling on behalf of the subcommittee, senator mccaskill and i discussed why we think this is without merit. We also explained the great care that psi is taking this protection of personal interests here. And we have made that ruling publicly available today on psis website. And i encourage you to take a look at it. After overruling the backpage objections, we awarded the ceo to produce the documents we asked for by last thursday. November 12. That day came and went without no response. Then backpage informed psi that they would not comply. But at the same time backpage made a show of producing cherrypicked documents favorable to the Company Along with a 16,000 page of document that is the subcommittee does not need or is not seeking. We dont think backpages response to this subpoena has been in good faith. Its fine to have legal disagreements with us about constitutional privileges or the appropriateness of certain requests. We treat these objections very seriously. But backpage has done more than just raise illegal objection to producing certain documents. Just last week backpages lawyers told psi the company had not bothered to look for the documents responsive to by the up is. Had not bothered to look for the documents responsive to the subpoena. Which means backpage does not even know what all it is refusing to produce, much less why the documents should be protected by the First Amendment. Psi was disappointed by the compliance, noncompliance but are not deterred. The report reveals that backpage had practice of editing advertisements by deleting words and images before publication. This is important because changing the appearance of a published ad obviously does not change the advertised transaction. The staff report finds that in some cases the editing practices likely served to conceal evidence of the legality of the underlying transaction. That finding raises some very serious questions. We want to know more about the purpose and effect of these editing practices, which is why we issued a subpoena for documents to tell us whether and how backpages deletes, texts or images could alert Law Enforcement about a crime being advertised. When that failed, the subcommittee tried to take the testimony of two backpage employees and to charge them with moderation practices. But they refused to testify on the grounds it might incriminate them. Nevertheless, we continue to seek documents from backpage to allow us to understand this and other aspects of its screening process. In a moment senator mccaskill will describe other findings in greater detail. At the close of todays hearing, we will address the next steps the subcommittee plans to enforce the subpoena that backpage has violated. Im grateful to our Ranking Member, senator mccaskill and her staff for their shouldertoshoulder work on this bipartisan investigation and i would like to turn to her for her opening statement. Thank you, chairman portman for holding this hearing and thank you for the strong working relationship we have on this committee. Four months ago a 15yearold girl walked into cardinal glenn Childrens Hospital in st. Louis, missouri, and asked for help. Along with four other girls between the ages of 12 and 18, she had been sold for sex at truck stops across missouri, florida, texas and new mexico for almost two months. She was lucky to be alive. According to her police report, another girl traveling with her during those months had died in her arms. The 15yearold girl who walked into Cardinal Glennon like the majority of children who were sold for sex in the United States today was trafficked using backpage. Com. Throughout the subcommittees investigation, we have received information indicating that backpage has built a hugely successful business in part by posting advertisements of children and other victims of Human Trafficking on its website. And despite knowing that its website has hosted advertisements of children being sold for sex, backpage has apparently signaled to its moderators that those ads should remain on the site. In april, 2012, for example, backpage initially told its outside moderators they should, quote, fail, end quote, or remove as containing references to certain sex acts in words, including, quote, school girl, unquote, quote, teen, unquote, quote Human Trafficking, unquote, and quote yung, end quote. Two days later backpage reversed that policy. The employee responsible for moderation issued clarifications regarding the banned words. He instructed that moderators should no longer delete ads that contain young or misspellings of young. Those deletions were capturing too much volume, he explained. Because there were too many legitimate uses of the word to warrant a removal every time. Instead of deleting advertisements for services with young, the backpage employee instructed moderators to send the ads to him for additional review. We dont know how many, if any ads were removed following that additional review. We do know that backpage instructed its moderators to be very cautious about deleting ads. According to the manager of the moderators, quote, the definition of underage is anyone under the age of 18, but for the purposes of making reports, we err on the side of caution and try to report anyone that looks under the age of 21, end quote. Importantly, guidance from backpage emphasized in all capital letters, if in doubt about underage, the process should now be to accept the ad. If in doubt about underage, the process for now should be to accept the ad. And, quote, only delete if you are really very sure a person only delete if you are really very sure that a person is underage. Only delete if you really very sure a person is underage. That was all in all caps. The result of backpages guidance, of course, is the site contains numerous advertisements for sexual advertisements with children. The National Center for missing and exploited children are, for example, reports that 71 of the childs sex trafficking reports it receives involve ads posted on backpage. According to shared Hope International, Service Providers working with child sex trafficking victims reported between 80 and 100 of their clients had been bought and sold on backpage. Com. We have also learned that backpage has failed to preserve information that would help Law Enforcement and other entities locate victims and put pimps and traffickers in jail. Backpage also failed to implement other free widely available technologies that have helped Law Enforcement build cases against suspected sex traffickers. Moreover, backpage representatives and Third Party Consultants informed the subcommittee that backpage moderators edit and delete content in ads that may conceal evidence of illegal activity from Law Enforcement. The subcommittee has also found that backpages Business Model has been highly profitable. Based on information obtained by the subcommittee, backpage had net revenue of 135 million in 2014. And is expected to net more than 153 million this year. Nearly all of it profit. The companys fair market value taking into account its lack of marketability is approximately 430 million. As a former sex crimes prosecutor, i know that behind these cold financial statistics are survivors traumatized from abuse and degradation. And families suffering through years of terror and uncertainty concerning the fate of their loved ones. Today i hope to hear from our first witnesses about the impact of backpage on the efforts of Law Enforcement officials and advocacy groups to curb sex trafficking in the United States. Im confident that their testimony will make clear the importance of subcommittee efforts to press backpage for information on its operations and procedures. I also hope that we will at some future date finally have the opportunity to question backpage ceo carl ferrar, carlferrer, carl ferrer, who received a subpoena to appear before the subcommittee today but has refused to attend. I have many questions for him. I thank the witnesses for being here today and i look forward to their testimony. Thank you, senator mccaskill and thank you for your partnership in this investigation. Senator mccaskill mentioned the staff report without any objection in order to become part of the record. With this were going to turn to our first panel of witnesses and have an opportunity for members to ask questions. We are pleased to be joined by yiota souras. She is Senior Vice President of the center for exploited children. For over 30 years she has provided valuable services to Law Enforcement and the criminal Justice Community with the limit of limiting Child Exploitation and reuniting families. They have recovered over 200,000 missing children including assisting with the rescue of a missing child in cleveland, ohio, just earlier this month. We appreciate what you do. Im also honored to have with us today the founder, john walsh, who is with us in the room this morning. Who has been a good at visor to me and to the subcommittee. Were also pleased to be joined by darwin roberts. Darwin is a Deputy Attorney general with the Washington StateAttorney Generals Office where he supervises the criminal Justice Division among other units. And he also is the lead office for the Human Trafficking issues. He is trying to combat child trafficking. The polaris project gave washington the highest ranking for its antitrafficking efforts last year from 2005 to 2013, mr. Roberts also served as the assistant u. S. Attorney. I appreciate you both being here this morning and we look forward to your testimony. Without objection, well make part of the record the written testimony submitted by brant cook, the director of the Ohio Attorney general for crimes against childrens initiative. Ohio is also at the forefront of the issue under the leadership of former senator mike dewine. And well try to make part of the record the testimony of the chief District Attorney for manhattan who has also been juc engaged in this issue in the subcommittee. At this time, please stand and raise your right hand. Do you swear that the testimony youre about to give before this subcommittee will be the truth, the whole truth and nothing but the truth, so help you god . I do. I do. Let the record reflect the witnesses answer in the affirmative. All your written testimony will be printed in the record in its entirety. Try to limit the oral testimony to five minutes. Miss souras, well hear from you first. Thank you. Chairman portman, Ranking Member mccaskill and Ranking Members of the committee, im pleased to be here for the National Center for missing and exploited children. Thank you for your efforts to exploit the crime of child sex trafficking and potential solutions to combat this horrible crime. Im joined today by the cofounder, john walsh, and the incoming ceo john clark, former director of the u. S. Marshals, who are here with me to underscore the support for the committees work and our dedication to preventing child sex trafficking and assisting survivors and their families. Were here to talk about the online lucrative sale of americas children for sex. Which in our experience occurs mo