Statement of Richard Shelby on Combating Child Pornography by Eliminating Pornographers' Access to the Financial Payment System

Statement of Richard Shelby
U.S. Senate Committee on Banking, Housing, and Urban Affairs
"Combating Child Pornography by Eliminating Pornographers' Access to the Financial Payment System"

This morning, the Banking Committee will examine the exploding problem of child pornography on the Internet, and the roles the Congress, the Executive Branch and the financial services community can play in combating this global problem. We will hear from the Attorney General of the United States on the efforts of the Department of Justice to attack and stop this criminal activity. The Committee will also review the progress of the Financial Coalition Against Child Pornography since its recent launch in March of this year.

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. Combine that demand with ease of access provided by the Internet and the ability to use credit cards and other payment methods and you get one of the fastest growing on-line businesses.

Unfortunately, our banks and credit card companies which have been instrumental in the Internet commerce revolution, have become an unintentional part of the problem. Credit cards provide an easy and quick method of payment and are accepted worldwide. Purveyors of child pornography know this and they use the Internet and the credit card system to exploit and abuse innocent children for profit.

While this all began as a mostly concealed cottage industry, investigations today have unraveled complex international financial trails. Billions of dollars a year in illicit profits attract organized criminals who are highly adept at using sophisticated finance and money-laundering mechanisms such as shell and front companies which hide true identities and process payments internationally. As the Attorney General will soon discuss, an important key to combating this growing transnational cancer is to follow the money, the same tactic we use in disrupting organized crime syndicates, narcotics traffickers, and terror networks.

If it were in the realm of possibilities to eliminate the incomprehensible demand for this type of disturbing material, we would surely do it. But, unfortunately, that noble goal is well beyond any of our capabilities. It is, nonetheless, all of our responsibilities to do everything we can to protect our children by combining our efforts to combat this undeniable evil. The members of this Committee are committed to doing just that by going after the money.

One such measure involves organizing banks, credit card companies, Internet service providers, and alternate payment providers to work together to address this issue. The Financial Coalition Against Child Pornography is an initiative involving the National Center for Missing and Exploited Children and its international sister organization. These two groups are collaborating with several financial institutions and Internet industry leaders to eradicate the commercial viability of child pornography by the year 2008. So far, 25 companies have joined the Coalition. It is our hope that number will grow significantly in the very near future.

In my role as Chairman of the Senate Banking Committee, I have worked with the Center to bring together industry leaders to develop and implement a comprehensive strategy to attack the problem. We have the technology, resources and expertise - but the key is cooperation, coordination and perhaps most important, commitment in the financial services community.

I look forward to hearing from our witnesses as we discuss these issues in more detail. This morning, we will hear first from The Honorable Alberto R. Gonzales, Attorney General of the United States. General Gonzales, who, since taking the helm at Justice, has made combating the scourge of child pornography one of the Department's highest priorities. The Attorney General has developed a new initiative, Project Safe Childhood, which will coordinate federal, State, and local law enforcement efforts to prosecute child predators and rescue their victims. Under his leadership, the Justice Department has partnered with the National Center for Missing and Exploited Children and other organizations, to deploy their considerable resources against this threat. Also, the Attorney General has worked with Congress to craft new laws to combat those who would harm children - particularly the recently-enacted Adam Walsh Child Protection and Safety Act of 2006. Mr. Attorney General, I commend you for your efforts and we are very pleased that you are with us today.

Our second panel will include Mr. Ernie Allen, President and Chief Executive Officer of the National Center for Missing and Exploited Children, Ms. Kim Mowder, Senior Vice President of Bank of America Merchant Services, Mr. Mike DeNoma, Group Executive Director of Consumer Banking for Standard Chartered Bank, Ms. Jodi Golinsky, Vice President and Regulatory and Public Policy Counsel for MasterCard Worldwide, and Mr. Mark MacCarthy, Senior Vice President for Public Policy, Visa U.S.A., Inc.

http://banking.senate.gov/index.cfm?Fuseaction=Hearings.Testimony&TestimonyID=1341&HearingID=238