A siege on the child-porn market

Some of America's most powerful financial institutions have a new target - and it doesn't involve making money.

For the first time, titans such as American Express, Bank of America, and Citigroup will join forces to try to thwart the use of credit cards and other financial tools to buy child pornography. A group of 18 corporate giants intends to share information, issue cease-and-desist orders to offenders, and try to expand its reach to almost every financial institution that matters. The aim: to snuff out the commercial spread of the smut by 2008.

"People say it's crazy, but I don't think it is," says Ernie Allen, president of the National Center for Missing and Exploited Children, which will act as clearinghouse for the effort. "If we can eliminate the credit-card use, the third-party payments, or any of the illegal mechanisms, we can make it a whole lot harder."

By many estimates, child pornography has mushroomed into a giant business, attracting organized crime. At least 200,000 websites sell such images, according to Mr. Allen, and rake in from $20 billion to $30 billion a year. "Its use is absolutely exploding," says Allen, whose organization each week fields as many as 1,500 tips on illicit sites.

"We have no illusions we will make the problem go away," he says. "But if we can get the focus back on hard-core pedophiles, [the problem] will be a much smaller magnitude, and we'll be able to use more traditional means to track [pedophiles] and bring [them] to justice."

In an example of traditional law-enforcement action, charges have been brought against 27 people alleged to have run an online chat room that included video streaming of live molestations, Attorney General Alberto Gonzales announced Wednesday. Federal agents have made arrests in recent days in nine states. Fourteen of the 27 suspects were arrested and charged in Australia, Canada, and the United Kingdom, according to news wire reports.

The idea for the new group, called the Financial Coalition Against Child Pornography, originated with Sen. Richard Shelby (R) of Alabama, chairman of the Senate Banking Committee. "The credit-card system is one of the keys," Senator Shelby said in a phone interview with reporters. "It's all about money, money, money."

He met last summer with leaders of the financial community, and even though the companies are fierce competitors, the leaders agreed to work together, pooling their experience and cooperating with law enforcement. The official organization was announced Wednesday in Washington. "If people were buying heroin and cocaine with their credit cards, people would be outraged," says Shelby. "This is worse."

His message resonated with the financial community - including PayPal and e-gold, newer avenues that some say child-porn customers have used to pay for illicit images. Both are coalition members. American Express, which has long refused to let its card be used for any adult-entertainment purchases, also decided to join.

"The ability to collaborate and share best practices is the best way to eradicate this particular problem," says Christine Elliott, American Express spokeswoman.

Individual credit-card companies have tried in the past to crack down on the use of their cards for child-porn purchases. Three years ago, Visa International hired an outside firm, staffed by former government lawmen, to search 1 million pages on the Internet every day for child pornography that also had the Visa logo. When a site was discovered, the firm turned over the information to law-enforcement officials working out of the National Center for Missing and Exploited Children.

At the time, 80 percent of the 400 websites it found to be selling child porn had either been shut down by authorities or had their Visa privileges terminated, Visa told the Monitor.

Visa is still engaged in that effort, now searching 11 million Internet pages a day. "We use a very sophisticated search engine, and when it raises a red flag we have to look at it and work with law enforcement in a coordinated response," says Rhonda Bentz, a Visa vice president in Washington. "We don't want to disclose everything that we do," she adds, "because we don't want the bad guys to know what we're doing. They are an agile community."

One problem for the card companies is that it is illegal for anyone other than law-enforcement officials to look at child porn. This has made it difficult to proceed with their own internal controls.

"The great thing about this coalition is that it gives us for the first time an independent entity to decide the validity of a particular image - and if it is child porn or not - and gives us actionable information," says Joshua Peirez, group executive of global public policy at MasterCard in Purchase, N.Y.

The Financial Coalition Against Child Pornography, which has met three times already, has created three working groups on detection of child-porn sites, prevention of future sites, and clearinghouse operations. "The goal is to use it as a core and then build out from it," says Allen. "We're hoping to recruit additional financial institutions in the US and around the world."

The financial community has been helpful in past prosecutions. Three years ago, federal prosecutors cracked an international child-porn ring, Regpay, in Belarus. "We followed the money," recalls Carlos Ortiz, who prosecuted the case. "We had great help from MasterCard, Visa, and Morgan Stanley."

This latest effort will also succeed, predicts Mr. Ortiz, now with the law firm DLA Piper Rudnick Gray Cary in New York. "We have the right people involved to strangle the flow of money," he says. "I sincerely think it's going to make a difference."