Backpage and The Iron Law of Prohibition

By now, most of my readers have already heard that Backpage founder Michael Lacey, was found guilty of a single count of money laundering for a $16.5 million transfer to a bank in Hungary, which was supposedly done to conceal the illegal source of the money.

That seems weird, since the jury did not find him guilty of any crime in which he supposedly earned that illegal money — the jury deadlocked on 84 of the remaining charges against him and found him not guilty of the 85th. That seems like the sort of inconsistency which should result in the conviction being overturned, but in a world where you can be convicted of lying to cover up a crime which never occurred, I’m not counting on common sense prevailing.

Several articles have noted that the crime carries a sentence of “up to 20 years,” which would be an especially harsh sentence for the 75-year-old Lacey. However, as Ken White always points out, such maximum sentences are usually meaningless. Federal sentencing guidelines and practices are too complicated for me to follow, but most sentences fall below the maximum. I don’t expect Lacey to go away for a full 20 years.

Except…federal sentencing allows for some bullshit called acquitted conduct sentencing, in which the judge is allowed to use other criminal charges in the determination of the sentence, even if the defendant was found not guilty of those other charges. So those other 85 charges against Lacey could actually lengthen his sentence considerably. The judge is still constrained by the 20-year maximum for the single proven charge, but she could conceivably hit him with long prison time.

This is an ugly outcome to an ugly trial, and it gets worse. Two other Backpage employees, Scott Spear and John Brunst, have been found guilty of much more. Spear, the former executive vice president, was found guilty of of 18 prostitution-related charges, 23 money laundering charges, and a conspiracy charge. Brunst, the chief financial officer, was found guilty of 31 money laundering charges. Federal sentences don’t multiply by the number of counts, but these convictions seem likely to send them away for a long time.

Adding to the ugliness, Lacey’s long-time business partner, James Larkin, had been indicted as well, but he committed suicide shortly before the trial was scheduled to start.

(Two other Backpage defendants, Andrew Padilla and Joye Vaught, were found not guilty of conspiracy and prostitution charges.)

Unfortunately, I fear there is more ugliness yet to come.

As a libertarian^[1]Definitely “small-L” these days., I have been following the War on Drugs for decades and calling out the evils when I can. At the same time and for the same reasons, I also found the criminalization of consensual sex deplorable: Gay sex, group sex, furry sex, whatever — it’s none of the government’s business. Paid sex is no different. Adult consensual sex work should not be a crime.

One of the remarkable things about prostitution compared to drug dealing is how out in the open it is. Maggie McNeill has been blogging as The Honest Courtesan for 13 years now, Tits & Sass ran for 9 years, Brooke Magnanti started Diary of a London Call Girl twenty-one years ago last month and still writes today although she’s in a very different line of work. Sex workers also have a vibrant presence on Twitter/X (and now on Bluesky). Sex workers even have advocacy organizations such as the Sex Workers Outreach Project and Old Pros which operate in the open to advance sex worker causes. Even much of the business of sex work is in the open, with sex workers advertising on sites like Slixa, PrivateDelights, and Tryst. Many of them also have individual marketing websites.

Sex workers used to have Backpage for advertising too, but it was shut down in 2018 when the Department of Justice seized the site. This turned out to have unintended consequences.

Shutting down Backpage didn’t make the sex trade go away. Backpage‘s sex workers still needed to make money, and Backpage‘s readers still wanted to have sex. Buying ads on Backpage had been the low-cost entry-level alternative to setting up a personal website or advertising on one of the major escort sites, and while it was in operation, Backpage allowed thousands of street-level sex workers to inexpensively switch to a much safer way of doing business. This almost certainly saved lives, and it definitely made sex workers’ lives better. But with Backpage gone, many sex workers were dumped back into a life on the streets, with all the dangers that involves.

Backpage‘s attackers accused it of being complicit in child sex trafficking, claiming that pimps would advertise children on the site. This was undoubtedly true to some extent, but what goes unmentioned is that Backpage worked closely with law enforcement agencies to fight child sex trafficking, alerting them to possible cases and helping them track down perpetrators. But now that Backpage‘s share of the sex trade has moved back to the streets, it has become less visible. Child sex trafficking is still going on, but now it’s much harder to find.

The Iron Law of Prohibition says that making something illegal will make it stronger and more dangerous. Nobody drank bathtub gin in America until the Prohibition laws of 1920 criminalized alcoholic beverages. Almost nobody smoked crack until law enforcement started a war on cocaine, and we didn’t have much of a fentanyl problem until the government started cracking down on opioids. Legal alcohol and tobacco distributors didn’t shoot each other in the streets the way drug-smuggling gangsters do.

Criminalizing a good or service necessarily drives it underground. The need to hide makes it harder to build a good reputation, which makes it less rewarding to have good business practices. Customer service and attention to product quality fall by the wayside. Without transparency, public regulation, or access to the courts to redress grievances, there is little penalty for being a bad actor. Thus bad actors enter and thrive in the market, engaging in fraud, theft, and violence, which can often only be countered with more violence. Prohibition drives good people out of the business, resulting in entire markets being controlled by gangs of criminals, and the harder the prohibition laws are enforced, the more power gets transferred to people willing to endanger themselves and others to make a buck.^[2]Stronger drugs are also more compact and easier to smuggle, but I can’t think of an analogous effect for sex work.

With the success of the Backpage prosecutions, it seems likely that more such prosecutions will follow. The SESTA/FOSTA laws, which were advertised as being useful in fighting Backpage-style websites (but which passed after charges were filed) would make it even easier for the government to harass sex workers. We could be on the verge of a dangerous War on Sex Work.

I don’t think we’re there yet, and I don’t think it’s inevitable. We may be able to head off a War-on-Drugs-like attack on sex work. I don’t know how, but I assume activists at SWOP and other organizations have some good ideas. For myself, I’m going to continue drawing attention to the issue and making arguments for decriminalizing sex work.

I do have one suggestion, however: Let’s try to keep the people behind the War on Sex Work from holding elected office. The idea that sex work should be fought with severe police action is not widely taken as given. Many people still aren’t very concerned about it.^[3]And many of those who are very concerned are tainted by QAnon conspiracy theories, which thankfully undermines their credibility. And if we can punish these anti-sex-work warriors at the ballot box, maybe it will never catch on.

To that end, let’s name some names.

The war on Backpage was started by Kamala Harris who, as Attorney General for California, brought the first criminal case against Lacey and others in 2016. The case was pure theater — Harris was running for Senate at the time — and it was was unceremoniously laughed out of court, as was her second attempt in 2017.

(This was not Harris’s only terrible decision as an office holder. As District Attorney for San Francisco she made some odious decisions which caught up to her as “Kamala is a cop” during her failed presidential campaign.)

The Department of Justice’s case against Backpage was started under the Trump administration by Attorney General Jeff Sessions. It tanked due to prosecutorial misconduct, but was eventually taken to trial by the Department of Justice under Biden’s Attorney General appointee, Merrick Garland. The actual dirty work, however, was done by local DOJ lawyers who for all I know had the best of intentions.

I’m pretty sure that when Assistant U.S. Attorneys Kevin Rapp, Margaret Perlmeter, Andy Stone, and Peter Kozinets caught this case for the District of Arizona they didn’t set out planning to make the sex trade worse. But that’s what they’re doing. And I’m pretty sure that when Austin Berry from the Child Exploitation and Obscenity Section joined them, he wasn’t planning to make it harder to catch child predators, although that’s what he’s doing.

(As for Assistant U.S. Attorneys Daniel Boyle and Joseph Bozdech, they’ve been running the civil forfeiture operation against Backpage — stealing assets from the defendants with questionable justification, thus impairing their ability to pay defense lawyers — so fuck ’em.)

In the War on Sex Work, these are some of the people we need to keep an eye on. Merrick Garland has the power to prosecute more cases like this one, against many more web sites and organizations. As Vice President now, Harris is (a) powerless, but (b) a heartbeat away from being able to set Justice Department priorities. I’m not sure we can do much about either of them.

As for the rest of the prosecutors, they may just settle into ordinary careers, but they could just as easily leverage their credentials to get into politics. We should be ready if they do.