Goldman Sachs dumps stake in Village Voice Media to avoid ties to sex trafficking allegations
New York Times columnist Nicholas Kristof has revealed some information on one of Goldman Sachs’ investments that has the private equity firm furiously attempting to control what it apparently sees as potential damage to its image.
Kristof wrote in his column on Saturday that Village Voice Media, which owns a website that he described as “the biggest forum for sex trafficking of under-age girls in the United States,” was itself partially owned by Goldman Sachs.
As a result of Kristof’s inquiries earlier this week, Goldman Sachs began “frantically” unloading its shares in that company, and a Goldman Sachs representative called Kristof on Friday to say it had just agreed to sell its remaining stake in the business to management. A Goldman Sachs spokesperson insisted, “We had no influence over operations.”
The irony of the situation is that among all the misdeeds of which Goldman Sachs has recently been accused, its indirect involvement with the sex ad website Backpage.com may be the most innocuous. Kristof has reportedly been on something of a crusade against Backpage and its owners, but the site’s defenders insist that many of his charges are distorted or overstated.
“This emporium for girls and women — some under age or forced into prostitution — is in turn owned by an opaque private company called Village Voice Media,” Kristof wrote melodramatically. “Until now it has been unclear who the ultimate owners are. That mystery is solved. The owners turn out to include private equity financiers, including Goldman Sachs with a 16 percent stake.”
Kristof also states that Backpage “has 70 percent of the market for prostitution ads” and insists that although “many escort ads on Backpage are placed by consenting adults,” the site also plays a major role in coercive sex trafficking.
Village Voice Media, which acquired Backpage.com in 2006 as the result of a merger, says it has been making efforts to screen the ads for possible abuse. In addition, the Village Voice newspaper, which is owned by Village Voice Media, has recently been pushing back against Kristof’s charges.
Two weeks ago, for example, Kristof wrote about a former teenaged prostitute who alleged that at the age of sixteen, she was routinely pimped out on Backpage.com. The Voice notes, however, that in 2003, when the girl was sixteen, Backpage did not yet exist. Even in 2005, it still did not exist in the cities where she said she had worked.
As early as last summer, actor Aston Kutcher was accusing Village Voice Media of promoting “child sex slavery.” Last fall, however, In These Times reported that sex workers themselves felt they would be harmed if Backpage was closed down:
“’Efforts to close down third-party advertisers are a shortsighted and misguided tactic to address trafficking,’ said the New York City branch of the grassroots Sex Workers Outreach Project (SWOP), in correspondence with In These Times. Blanket crackdowns endanger sex workers by forcing them ‘further underground,’ potentially pushing vulnerable people away from social services and other initiatives that could alleviate the social and economic oppression often underpinning sexual coercion.”
Kristof, however, expresses no doubts about his course of action, boasting that since he began focusing attention on Backpage, nineteen US senators have written a letter asking Village Voice Media to stop abetting traffickers. There have also been protesters outside the Village Voice Media office and an online petition criticizing the firm.
Kristof acknowledges that the Goldman Sachs investment in Village Voice Media goes back to 2000 and that “this is a tiny investment by a huge company, and I have no reason to think that Goldman’s top executives knew of its connection to sex trafficking.”
However, he appears to see the Goldman Sachs connection as a fresh weapon to use against Backpage.com and concludes his column by suggesting that “if the minority shareholders, Goldman included, worked together instead of rushing for the exits, they might be able to pressure Village Voice Media to get out of escort ads.”
[Ed. note: This article was edited after publication.]
Phobo by Oriez (Own work) [Public domain], via Wikimedia Commons