[House Hearing, 109 Congress] [From the U.S. Government Publishing Office] COMBATING TRAFFICKING IN PERSONS: AN INTERNATIONAL PERSPECTIVE ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON DOMESTIC AND INTERNATIONAL MONETARY POLICY, TRADE AND TECHNOLOGY OF THE COMMITTEE ON FINANCIAL SERVICES U.S. HOUSE OF REPRESENTATIVES ONE HUNDRED NINTH CONGRESS FIRST SESSION __________ JUNE 22, 2005 __________ Printed for the use of the Committee on Financial Services Serial No. 109-40 U.S. GOVERNMENT PRINTING OFFICE 24-400 WASHINGTON : 2005 _____________________________________________________________________________ For Sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800 Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001 HOUSE COMMITTEE ON FINANCIAL SERVICES MICHAEL G. OXLEY, Ohio, Chairman JAMES A. LEACH, Iowa BARNEY FRANK, Massachusetts RICHARD H. BAKER, Louisiana PAUL E. KANJORSKI, Pennsylvania DEBORAH PRYCE, Ohio MAXINE WATERS, California SPENCER BACHUS, Alabama CAROLYN B. MALONEY, New York MICHAEL N. CASTLE, Delaware LUIS V. GUTIERREZ, Illinois PETER T. KING, New York NYDIA M. VELAZQUEZ, New York EDWARD R. ROYCE, California MELVIN L. WATT, North Carolina FRANK D. LUCAS, Oklahoma GARY L. ACKERMAN, New York ROBERT W. NEY, Ohio DARLENE HOOLEY, Oregon SUE W. KELLY, New York, Vice Chair JULIA CARSON, Indiana RON PAUL, Texas BRAD SHERMAN, California PAUL E. GILLMOR, Ohio GREGORY W. MEEKS, New York JIM RYUN, Kansas BARBARA LEE, California STEVEN C. LaTOURETTE, Ohio DENNIS MOORE, Kansas DONALD A. MANZULLO, Illinois MICHAEL E. CAPUANO, Massachusetts WALTER B. JONES, Jr., North HAROLD E. FORD, Jr., Tennessee Carolina RUBEN HINOJOSA, Texas JUDY BIGGERT, Illinois JOSEPH CROWLEY, New York CHRISTOPHER SHAYS, Connecticut WM. LACY CLAY, Missouri VITO FOSSELLA, New York STEVE ISRAEL, New York GARY G. MILLER, California CAROLYN McCARTHY, New York PATRICK J. TIBERI, Ohio JOE BACA, California MARK R. KENNEDY, Minnesota JIM MATHESON, Utah TOM FEENEY, Florida STEPHEN F. LYNCH, Massachusetts JEB HENSARLING, Texas BRAD MILLER, North Carolina SCOTT GARRETT, New Jersey DAVID SCOTT, Georgia GINNY BROWN-WAITE, Florida ARTUR DAVIS, Alabama J. GRESHAM BARRETT, South Carolina AL GREEN, Texas KATHERINE HARRIS, Florida EMANUEL CLEAVER, Missouri RICK RENZI, Arizona MELISSA L. BEAN, Illinois JIM GERLACH, Pennsylvania DEBBIE WASSERMAN SCHULTZ, Florida STEVAN PEARCE, New Mexico GWEN MOORE, Wisconsin, RANDY NEUGEBAUER, Texas TOM PRICE, Georgia BERNARD SANDERS, Vermont MICHAEL G. FITZPATRICK, Pennsylvania GEOFF DAVIS, Kentucky PATRICK T. McHENRY, North Carolina Robert U. Foster, III, Staff Director Subcommittee on Domestic and International Monetary Policy, Trade and Technology DEBORAH PRYCE, Ohio, Chair JUDY BIGGERT, Illinois, Vice Chair CAROLYN B. MALONEY, New York JAMES A. LEACH, Iowa BERNARD SANDERS, Vermont MICHAEL N. CASTLE, Delaware MELVIN L. WATT, North Carolina FRANK D. LUCAS, Oklahoma MAXINE WATERS, California RON PAUL, Texas BARBARA LEE, California STEVEN C. LaTOURETTE, Ohio PAUL E. KANJORSKI, Pennsylvania DONALD A. MANZULLO, Illinois BRAD SHERMAN, California MARK R. KENNEDY, Minnesota LUIS V. GUTIERREZ, Illinois KATHERINE HARRIS, Florida MELISSA L. BEAN, Illinois JIM GERLACH, Pennsylvania DEBBIE WASSERMAN SCHULTZ, Florida RANDY NEUGEBAUER, Texas GWEN MOORE, Wisconsin TOM PRICE, Georgia JOSEPH CROWLEY, New York PATRICK T. McHENRY, North Carolina BARNEY FRANK, Massachusetts MICHAEL G. OXLEY, Ohio C O N T E N T S ---------- Page Hearing held on: June 22, 2005................................................ 1 Appendix: June 22, 2005................................................ 19 WITNESSES Wednesday, June 22, 2005 Leidholdt, Dorchen A., Co-Executive Director, Coalition Against Trafficking in Women........................................... 11 Neuwirth, Jessica, President, Equality Now....................... 8 O'Connor, Michael E., Jr., Director of Operations, South Asia International Justice Mission.................................. 6 Thompson, Lisa L., Liaison for the Abolition of Sexual Trafficking, The Salvation Army National Headquarters.......... 13 APPENDIX Prepared statements: Pryce, Hon. Deborah.......................................... 20 Lee, Hon. Barbara............................................ 30 Leidholdt, Dorchen A......................................... 32 Neuwirth, Jessica............................................ 39 O'Connor, Michael E., Jr..................................... 42 Thompson, Lisa L. (with attachment).......................... 47 Additional Material Submitted for the Record Leidholdt, Dorchen A. Written response to questions from Hon. Barbara Lee.......... 63 O'Connor, Michael E., Jr. Written response to questions from Hon. Barbara Lee.......... 65 Thompson, Lisa L. Written response to questions from Hon. Barbara Lee.......... 67 Neuwirth, Jessica: Written response to questions from Hon. Barbara Lee.......... 69 COMBATING TRAFFICKING IN PERSONS: AN INTERNATIONAL PERSPECTIVE ---------- Wednesday, June 22, 2005 U.S. House of Representatives, Subcommittee on Domestic and International Monetary Policy, Trade, and Technology, Committee on Financial Services, Washington, D.C. The subcommittee met, pursuant to call, at 2:36 p.m., in Room 2128, Rayburn House Office Building, Hon. Deborah Pryce [chairman of the subcommittee] Presiding. Present: Representatives Pryce, Biggert, Maloney and Moore. Chairwoman Pryce. Thank you all very much for your patience. We were hung up on the floor with a series of votes, and I appreciate my ranking member Mrs. Maloney for being here. Good afternoon. We will start right away so as not to hold up anybody else any further. The hearing on the Committee on Domestic and International Policy, Trade and Technology will come to order. I would like to welcome everyone this afternoon. Today we are convening the second in a series of hearings in this subcommittee on a serious issue, trafficking in persons. At our first hearing in April, we heard testimony from a great leader at the State Department's Trafficking in Persons Office, Ambassador John Miller. Ambassador Miller offered a thorough and passionate testimony about U.S. efforts to combat trafficking here andabroad. We also heard from Ms. Norma Hotaling, executive director and founder of the SAGE Project in San Francisco. Norma turned her own experience with homelessness, addiction and sexual exploitation into a mission to make it easier for other women, men and youth to want to make lives for themselves and leave the sex trade behind. Ms. Tina Frundt, our final witness, courageously offered her firsthand experience as a victim of sex trafficking and sexual exploitation in the United States. Her harrowing encounters with victimization by pimps and johns put a human face on this tragedy and shed light on an issue that is all too often kept in the dark. I expect today's hearing to further expose members of this subcommittee, members of the media and the public to the multifaceted and destructive issues surrounding human trafficking, including the significant economic and financial implications. Today's hearing is timely for a number of reasons. First, in stating the obvious, modern-day slavery will be a timely issue to debate in the halls of Congress and committees across the world until it has its own chapter, complete with a start and a finish, in the history books of every country in the world. Second, just a few weeks ago Ambassador Miller's Trafficking in Persons Office at the State Department released a much-anticipated Trafficking in Persons report, or the TIP report, for 2005. The State Department is required by law to submit a report each year to Congress on the efforts of foreign governments to eliminate severe forms of trafficking in persons. This report covering April 2004 to March 2005 is the fifth annual TIP report. The intent of the report is to raise global awareness and prompt foreign governments to combat all forms of trafficking in persons. The report highlights the three Ps, prosecution, protection and prevention, and the three Rs, rescue, rehabilitation and reintegration. There is great significance in this marriage between the Ps and the Rs, and we need to focus on both in order to fully understand and tackle the scope of the problem. During my time overseas meeting with NGOs and victims, I saw firsthand the great potential to make this holistic approach work. While no country I visited came close to perfecting this approach in its entirety, I witnessed improved prosecution efforts in Albania, and the implementation of better prevention and reintegration efforts in Moldova, showing that progress can be made with commitment and coordination across the globe. Countries, including the U.S., must strive to implement all aspects of this victim-centered approach to fighting trafficking. The 2005 report gave a Tier 3 classification to 14 of the 50 countries that were assessed. A Tier 3 country, the lowest of the ratings, fails to take significant actions to bring itself into compliance with the minimum standards for eliminating trafficking in persons. Such an assessment can trigger the withholding of nonhumanitarian, nontrade aid, and U.S. Opposition to assistance from public lenders, such as the International Monetary Fund or the World Bank. One country on the Tier 3 list has already ignited action. Jamaica, a country previously on the Tier 2 list was downgraded because of a failure to follow through on previous commitments to strengthen law enforcement and protection measures. Not long after the reports were released, the Jamaican Prime Minister disclosed in a meeting with several journalists that a Cabinet office group consisting of representatives for the Ministries of Health, Education and Foreign Affairs, the Attorney General's Office and the immigration authorities would be established to act on the findings of the report and review existing law to identify areas to improve. Several countries that were on the Tier 3 list last year jumped up a notch this year, and that is a good thing. For example, Bangladesh showed a strong commitment to implementing antitrafficking efforts over the last year. The country established an antitrafficking committee to oversee its national efforts to combat the issue, and set up a much- anticipated special antitrafficking police unit which initiated new investigations for rescuing more and more victims. And in South Africa, Guyana's President facilitated the enactment--South America, excuse me. Guyana's President facilitated the enactment of the country's first antitrafficking law and launched a countrywide awareness campaign on the dangers and risks of trafficking. The report revealed that progress is being made in the campaign to combat sexual slavery and other forms of forced servitude. New antitrafficking measures were enacted in 39 countries last year, and there were more than 3,000 convictions worldwide relating to trafficking. Upon release of the report, Ambassador Miller was quoted as saying, ``Shining through these global tragedies are many, many rays of hope.'' Though there is still much work to be done, the U.S. is putting its laws to work. In 2003, Operation Predator was launched within the Department of Homeland Security and in the Immigration and Customs Enforcement Agency. This marked an unprecedented initiative to protect children worldwide from sexual predators, including those who travel overseas for sex with minors, Internet child pornographers and sex traffickers. Operation Predator targets U.S. citizens suspected of sex crimes against children, as well as noncitizens whose child sex crimes render them deportable from the U.S. Since its inception there have been more than 5,700 individuals arrested nationwide, including 14 arrests brought under the child sex tourism provision of the Protect Act. While progress has been made to combat trafficking, sobering statistics linger. An estimated up to 800,000 people are trafficked across international borders each year; 80 percent are females, and 50 percent are minors. According to a recent study by the International Labor Organization, a special agency of the United Nations that seeks to promote human and labor rights, at least 12.3 million people are trapped in forced labor across the globe. Of this number, over 2 million are victims of human trafficking, and 1.2 million are children forced into prostitution, drug trafficking and armed conflict. These victims of trafficking are an enormous source of revenue for organized crime. The ILO study estimates that $44 billion in global profits is brought in annually from forced labor, including 15 billion from victims of trafficking in persons. This report offers us evidence that there is much to learn about how effectively or ineffectively we are following the money and enforcing existing antilaundering money laws to deprive criminals of the economic gains associated with the global sex trade. There is not one clear cause of modern-day slavery, nor is there one clear solution, but there is a clear goal: to stamp it out for good. I want to thank the witnesses we have here today. We know that you each bring a unique perspective, and we appreciate your time, your energy and your courage on educating us about this global crisis. Chairwoman Pryce. Without objection, all members' opening statements will be a made a part of the record, but I would like to acknowledge the gentlewoman from New York, Ms. Maloney, her passion for tackling this issue is admirable, and I appreciate her partnership with me. Chairwoman Pryce. Mrs. Maloney. Mrs. Maloney. Well, I appreciate very much your leadership and partnership on this really, really critical issue, and I feel that together we can really make a difference and will make some changes that will help thousands, if not millions, of young women and men. And I really appreciate your making this the spotlight on what the United States is doing and can continue to do to combat sex trafficking. This is a topic that I personally care about deeply and have worked on for many years in Congress. The exploitation of the world's young women and children in sex trafficking is a tragic human rights offense. As you will hear, many of these victims are kidnapped, sold or tricked into brothel captivity. The 2004 State Department Trafficking in Persons report estimates that 600- to 800,000 persons are trafficked across international borders each year, with some 18,000 brought into the United States. This doesn't mention the number of people in the United States that do not cross international borders that are tricked or forced into sex slavery. Instead of the better jobs and better lives they dream of, they are trapped into a nightmare of coercion, violence and disease. I have worked on the trafficking issues for many years, including working with the Equality Now, and I am pleased that the founder and president of it, Jessica Neuwirth, is one of the participants today. She has a background in international law. She is an expert on women's rights and has dedicated her life to helping women across the globe and in the United States. We worked together to stop a sex tour operator that was operating blatantly in the district I represent in Queens called the Big Apple Oriental Tours, and they would literally advertise in brochures on the Internet, all over the place. Call them up and they would tell all about how they could take men or boys on sex tours to the Philippines and Thailand and sexually exploit impoverished women and young girls, advertising young ages, 11 years old. And we worked for 7 years against Big Apple Tours' blatant and obvious violations and tried to prosecute them under existing laws. It was against the law in the United States, against the law in the Philippines, yet they continued to operate for 7 years. The Department of Justice declined to take action, and only New York Attorney General Eliot Spitzer obtained an indictment that shut Big Apple down, and he has continued to proceed with this case. Although in the first level he was not successful, just the attention and press pressure basically closed them down; not a law, but the focus that we put on them. The story of Big Apple, although a story of some success, demonstrates that we need to do more to convince law enforcement in this country, as well as abroad, that we need to focus on the demand side of the trafficking equation. While the laws against prostitution in this country applies to johns as well as prostitutes, the overwhelming practice is to arrest the women and to let the men go, as though the women were the perpetrators and the men the victims. If we see this situation through the lens of trafficking, then this is backwards. The buyers of sex and the pimps selling it are the perpetrators, and the victims are those whose bodies are bought and sold. It is critical that we protect the women and children victims of the sex trade industry and punish the predators that exploit them, recruiters, traffickers, brothel owners, customers and criminal syndicates. This is why I am so pleased to join with Chairwoman Pryce to reintroduce legislation that will strengthen U.S. Laws and help victims in our country, whether they are foreign or U.S. citizens, and this is H.R 2012. The End Demand for Sexual Trafficking Act of 2005 combats trafficking by going after the purchasers of commercial sex acts and providing U.S. Law enforcement with improved tools to fight trafficking and assist victims. We have 12 cosponsors, and I urge all of the public here today to reach out to your Congress Members and Senators to urge them to become cosponsors of this important bipartisan legislation. And I am hopeful that we will be able to pass it this year. We are also working together, Deborah Pryce and I. We have requested a GAO report to conduct a study of trafficking and of what the U.S. and the multilateral development banks are doing to combat this problem. We are also working with Sue Kelly, with her subcommittee on criminal activity with money laundering, to see if there is any money in sex trafficking also illegally being laundered. This year I also introduced the Prevention of Trafficking of Tsunami Orphans Act, which would authorize critical assistance to the Department of State and the U.S. Agency for International Development to support programs that are being carried out by nongovernmental organizations to protect tsunami orphans or homeless children from becoming victims of trafficking. Although the tsunami is no longer front-page news, the thousands of homeless children and orphans it created are still very much at risk. We certainly must do more to stop the human rights abuses inflicted on men, women and children around the world by preventing trafficking and ending the sex trade industry. Although we continue to make important advances in the rights of women throughout the world, as long as there are women whose freedoms, livelihoods, bodies and souls are held captive because of trafficking, our work will never be done. I look forward to your testimony, and I hope that you will address many items. But may I ask one particular troubling item that has come up that I would like them to address in their testimony? Believe it or not, since we have been working on this, I am now being contacted by many organizations, some of whom are ex- prostitutes, gems from the Gem Society helping other prostitutes restore their lives. But some organizations that are arguing they like being prostitutes, they want to legalize prostitution, legalize johns--I am not kidding you, I am blown away by this. And in your testimony, if you could give me your response. I have been contacted by two or three organizations coming forward with this point of view of having tolerance for the beliefs or choices of other people. And one said, I like my profession, and, you know--I don't have to draw a picture, but I would like to hear your responses of how you would respond to that. Thank you. Chairwoman Pryce. Thank you, Mrs. Maloney. I think some of our witnesses look eager to respond to that question. Chairwoman Pryce. I would like to introduce now our witnesses. Mr. Michael O'Connor serves as the director of operations, South Asia, for International Justice Mission, IJM. IJM is an international human rights agency that rescues victims of violence, sexual exploitation, slavery, oppression and other injustices. Based on referrals from relief and development agencies around the world, IJM conducts professional investigations of abuses, and mobilized interventionson behalf of the victims. And Ms. Jessica Neuwirth is president of Equality Now. I know that the ranking member of the subcommittee gave you some recognition. Welcome today. And Ms. Dorchen Leidholdt is the co-executive director of the Coalition Against Trafficking in Women, which she helped found in 1998. An umbrella of grass-roots organizations around the world, the Coalition Against Trafficking in Women has strong, growing regional networks in Asia, Latin America and Africa. And Ms. Lisa Thompson is the liaison for the Abolition of Sexual Trafficking for the Salvation Army USA National Headquarters. In this role she develops and coordinates the strategies for the Salvation Army to create recovery services for survivors of sexual trafficking. Ms. Thompson is a member of the Salvation Army's International Antitrafficking Task Force representing the Americas. We welcome the witnesses to the hearing today. Without objection, your written statements will be made part of the record. You will be recognized for 5 minutes to summarize your testimony. And, Mr. O'Connor, we will begin with you. Thank you very much for being here today. STATEMENT OF MICHAEL E. O'CONNOR, JR., DIRECTOR OF OPERATIONS, SOUTH ASIA INTERNATIONAL JUSTICE MISSION Mr. O'Connor. Chairman Pryce, my name is Michael O'Connor, and I work for IJM, International Justice Mission. IJM helps rescue slaves, sex trafficking victims, forced labor victims. In 2004 alone we helped rescue more than 400 victims of slavery and sex trafficking. The international data regarding sexual trafficking suggests it is a massive problem, but we can't forget that there are individual perpetrators and individual victims with specific names and faces, and many of these victims are children. As but one example, in February of 2003 IJM undercover investigators went into a brothel in Svay Pak, Cambodia. An investigator was offered several young girls to have either sexual intercourse or oral sex with him for $30 an encounter. IJM then went to the Cambodia authorities. The Cambodian authorities did a raid and rescued 37 young girls, all of them under the age of 16; 10 of them were 10 years of age or younger, one of them was approximately 5 years old. If you extrapolate on a yearly basis, the victims were producing for the brothel managers approximately $400,000 a year in a country where the per capita income is $2,000. This is big money, big business. Just a couple months ago undercover agents went into a brothel in Southeast Asia where we suspected sex trafficking to be taking place. The brothel had about 200 women and girls there. An IJM undercover investigator talked to one of the women, who said she has sex approximately five times a day, $26 a time. Again, if you extrapolate, that brothel is pulling in approximately $9.5 million a year. This is a lot of money. Sex trafficking is not a crime of passion, it is an economic crime, and as an economic crime you need a market. You have drunk perverts who are trying to find these young girls to have sex with, and they find them. IJM was just an NGO, and we find them. So why can't the police find them? Well, the answer is a complicated one, but at least in part it is because many police accept bribes. Many of the countries where sex trafficking flourishes are countries where the police make desperately woefully inadequate wages, sometimes $40 or less per month. Meanwhile, the sex traffickers are making literally tons of money and can shower police with money to turn a blind eye. Where is this money coming from? A lot of it is coming from abroad, internationally; a lot of it is coming from sex tourism, and sex tourism isn't hidden. You go on the Internet, you go to Google, you put ``sex tourism'' into its search engine, and you get approximately 1.8 million hits. The second of those hits is an organization called WSA, the World Sex Archive. It seems to me to be a place where sex tourists can compare notes about good places, bad places to go. The Website itself says on the ``you need access'' page, quote, ``You will save tons of money by joining this site. Imagine spending a ton of cash to travel somewhere only to find yourself yanking your 'blank,''' it is a slang word for male genitalia, ``because the cops busted all of the 'blank,''' a slang word for female genitalia. This would totally 'blank.' but members of WSA are informed. They know the best places to go. We have chicas to yank our 'blanks' for us.'' I am not saying that all sex tourists are pedophiles, but some of them are. There is a man named Donald Bakker. He is a Canadian citizen, and the Canadian Government, the police authorities got a copy of a sex tape that he apparently made of having sex with young children, but the Canadian authorities couldn't identify who these young children were. Coincidentally, one of the Canadian cops on the case was watching a Dateline NBC special of the IJM's Svay Pak raid and noticed that the same brothel room on the Dateline piece was the brothel room that Donald Bakker had used to film his videotape. The Canadian authorities called us up, and we shared our information with them. Donald Bakker was, last month, convicted of seven counts against these young girls in Cambodia. But the unique thing is he wasn't prosecuted in Cambodia. They didn't have to ship him off to Cambodia to prosecute him, they prosecuted him in Canada. It was the first time that the Canadian authorities had done this under a new law that allows Canadian authorities to prosecute Canadians who go abroad and commit sexual acts against children abroad. It is a great law. The United States has a similar law. It is called the Protect Act. This law needs to be better publicized. Child molesters are, in general, cowards. It is why people spend so much money to go abroad to have sex with children, because they are afraid to do so in the United States because they know they will be prosecuted. We have got to get the word out that they will be prosecuted if they do such crimes in other countries as well. One thing I would suggest is that in each new and each reissued passport, that just a simple fact sheet be put in that passport regarding the contours of the Protect Act so that people are put on notice. I would also suggest that people who are convicted in the United States of sex crimes against children have such convictions stamped in their passports so at the very least we put foreign governments on notice of the people that they are letting into their country. I would like to thank, in conclusion, the Chair as well as the bipartisan efforts regarding sex trafficking. The traffickers are strong, they are united, they are committed, and we have to be committed as they are. Thank you. Chairwoman Pryce. Thank you very much, Mr. O'Connor. [The prepared statement of Michael E., O'Connor Jr. can be found on page 42 in the appendix.] Chairwoman Pryce. Ms. Neuwirth. STATEMENT OF JESSICA NEUWIRTH, PRESIDENT, EQUALITY NOW Ms. Neuwirth. Thank you, Congresswoman Pryce, for this opportunity to testify before you. And thank you for your interest and support of efforts to combat trafficking in persons. My name is Jessica Neuwirth, and I am the founder and president of Equality Now, an international human rights organization based in New York working for the protection and promotion of the rights of women and girls around the world. Equality Now's membership network is comprised of more than 25,000 individuals and organizations in 160 countries. Issues of concern to Equality Now include trafficking of women and girls, as well as rape, domestic violence, reproductive rights, female genital mutilation, denial of equal access to economic opportunity and political participation, and all other forms of violence and discrimination against women and girls. The Trafficking Victim Protection Act of 2000 recognized that sex tourism is one of the means through which commercial sexual exploitation of women and girls has contributed to the growth of the international sex industry and feeds the demand for sex trafficking. The Trafficking Victims Protection Reauthorization Act of 2003 went a step further in requiring the dissemination of materials alerting U.S. citizen travelers that sex tourism is illegal, will be prosecuted, and presents dangers to those involved. In evaluating how other countries are addressing human trafficking, H.R. 972, the Trafficking Victims Protection Reauthorization Act of 2005, would require adding, as a minimum standard for eliminating trafficking in the State Department's annual report, measures to reduce the demand for commercial sex acts and for participation in international sex tourism. We should hold ourselves to the same minimum standard and play a leadership role for other countries in this regard. My comments today will focus on Big Apple Oriental Tours in Bellerose and Poughkeepsie, New York, and the G&F Tours of New Orleans, Louisiana. I will speak about these sex tour companies because in their methods of operation, they demonstrate the typical activities of sex tour companies. I will also speak about them because the lack of action against them by both Federal and State prosecutors is also typical of our country's inadequate response to the demand side of the trafficking of women and children. From its location in New York, as Congresswoman Maloney mentioned earlier, Big Apple Oriental Tours was advertising its services, communicating with potential sex tourists to persuade them to travel with Big Apple Oriental Tours, making airline and hotel reservations, and arranging for local tour guides in the destination countries to introduce men to women from whom they could buy sex. The local Big Apple representative who escorted the men to the clubs was also available to negotiate the sex acts to be purchased and their price with the mamasan who controlled the women in these bars and clubs. G&F Tours in New Orleans is currently conducting its activities in precisely the same way, even using the same tour guide as Big Apple in Thailand. It should be simple to prosecute a company that so blatantly accepts money to facilitate and arrange commercial sex acts. New York penal law section 23020 makes it a class A misdemeanor when a person knowingly advances or profits from prostitution. Penal law section 23025 makes it a Class D felony to knowingly advance or profit from prostitution by managing, supervising, controlling or owning, either alone or in association with others, a house of prostitution or a prostitution business or enterprise involving prostitution activity by two or more prostitutes. Despite the clear language of the New York penal law and the uncontroverted activities of Big Apple Oriental Tours, Equality Now campaigned unsuccessfully for 7 years with the Queens County District Attorney to prosecute Big Apple Oriental Tours for promoting prostitution. Only when the case was brought to the attention of New York Attorney General Eliot Spitzer in 2003 was a civil proceeding to shut down the company undertaken, and a criminal prosecution subsequently commenced. The criminal case was dismissed, and then the dismissal was reversed on appeal. We are now waiting for another grand jury proceeding, and hoping that the case will finally go to trial. No other State-level prosecution against sex tour operators for promoting prostitution has even been attempted, despite most States have similar prohibitions of such activities of those in New York that I just described. I would like to note that from the beginning of our campaign 7 years ago, Congresswoman Maloney has been tremendously supportive of our efforts to close down Big Apple Oriental Tours and prosecute its owner/operators. I would like to thank her for her support, which has been instrumental in leading finally to the case currently under way. The Federal prosecutors have been equally unwilling to address the demand for trafficked women and girls created by sex tour operators and their customers. Unless it can be proven that children are involved, they are not interested. Very often minors are involved, but it is usually impossible to prove. Moreover, as a matter of principle as well as practicality, law enforcement interest in sex tourism should not be confined to cases involving minors. Section 2421 of Title 18 of the United States Code, known as the Mann Act, provides a 10-year sentence for anyone who knowingly transports any individual in interstate or foreign commerce with the intent that such individual engage in prostitution or in any sexual activity for which any person can be charged with a crime. Section 2422(a) makes it a crime for anyone who knowingly persuades, induces, entices or coerces any individual to travel in interstate or foreign commerce to engage in prostitution or in any sexual activities for which any person can be charged with a criminal offense. These provisions of the Mann Act could be effectively used against United States sex tour operators, but the Department of Defense has so far failed to apply this statute against them. Neither of these sections requires that the individual being transported or induced or persuaded to travel in foreign commerce be the prostituted person or the victim. In other words, transporting johns in foreign commerce, which is exactly what sex tour companies do, falls within the scope of the Mann Act. In virtually every popular sex tour destination country, such as Thailand, patronizing a prostitute is illegal, and johns can be charged with a crime for purchasing sex acts. Although both of the Mann Act sections just described could be applied to sex tour operators who every day induce, persuade and ultimately transport individuals in foreign commerce to engage in criminal sexual activity, Equality Now has now not been successful in its efforts over the past 6 years to get the Department of Defense, United States Attorney's Offices in the Eastern District of Louisiana and the Southern District of New York to apply the Mann Act against G&F Tours---- Chairwoman Pryce. Ms. Neuwirth, you are going to have to sum up because your time has expired. Ms. Neuwirth. Sorry. Equality Now welcomes the End Demand for Sex Trafficking Act, and thank you for your sponsorship of this bill. The bill includes the needed clarification that the Mann Act does apply to sex tour operators who transport purchasers, as well as sellers of commercial sexual acts. We hope this clarification will facilitate law enforcement efforts to end sex tourism. And more generally, we welcome the focus on demand for prostitution, which is the engine driving the commercial sex industry. Thank you. Chairwoman Pryce. Thank you. And I am so sorry, we are due to have another vote in about 10 minutes, so I wanted to leave time for the other witnesses as well. So thank you. [The prepared statement of Jessica Neuwirth can be found on page 39 in the appendix.] Chairwoman Pryce. Ms. Leidholdt. STATEMENT OF DORCHEN A. LEIDHOLDT, CO-EXECUTIVE DIRECTOR, COALITION AGAINST TRAFFICKING IN WOMEN Ms. Leidholdt. Congresswoman Pryce, Congresswoman Maloney, members of the subcommittee, I am grateful for this opportunity to address the subject of the economics of sex slavery. In addition to speaking as a founder and co-executive director of the Coalition Against Trafficking in Women, which has been working against all forms of commercial sexual exploitation of women and girls since 1998, I am speaking as director of the Center for Battered Women's Legal Services, Sanctuary For Families. It is a provider of legal and social services to domestic violence victims in New York City primarily, but has assisted many victims of sex trafficking in the United States. We have been asked to focus on the economics of the international sex trade, and this is a formidable task for several reasons. First of all, much of the industry operates underground, is run by organized crime groups that don't undergo financial audits or file tax returns. Second, only recently have criminal justice agencies had the legal mandate and motivation to investigate traffickers and other sex trade predators. And finally, myths about the agency of women in the sex industry accompanied by obliviousness to the role of men, both as patrons and profiteers, has led both governments and civil society to view the industry as inevitable, harmless, and its economics is a matter of little consequence. Thankfully all of this has begun to change. The magnitude of the industry's harm to women and children propelled into conditions of exploitation and slavery, the millions of lives maimed and destroyed can no longer be ignored. At the same time the growth of the industry over the last two decades in particular, the enormous profits made has caused social scientists, journalists and economists to begin to pay attention and to numbers crunch. If we analyze this growing body of data while following the money trail, focusing, as the Norwegian feminist group Kvinnefronten urges us to do, on the buyer, the bought and the business, a picture of the industry's economics and its economic and human toll begins to emerge. First the buyer. The economics of the global sex trade in women and children starts with the dollars, or pesos, or bhat in the pockets of prostitution buyers, known as johns in the United States, kerb crawlers in the United Kingdom, and more often than not as ordinary husbands and fathers in their communities. Although the amount they spend on purchased sex varies from country to country and within the sex industry's specialties, their collective demand fuels a gigantic global industry estimated by a 2004 European Parliament report to turn over more money each year than the total of all of the military budgets in the world. This doesn't include the money generated by the sex industry's Internet sites, which promote and facilitate this trade. In the U.S. alone, Internet pornographers make an estimated $1 billion annually, a figure that is expected to climb to 5- to $7 billion by the year 2007. Research shows that like perpetrators of domestic violence, the buyers of prostitution come from all races, classes, nationalities and walks of life. One study shows that about 70 to 90 percent are married men. While discretionary income facilitates their purchase of the body of a women or a child, buyers often spend income their families desperately need for necessities. Instead of being used to feed, cloth and educate their children, this money is spent in ways that place their families and communities in jeopardy, at the increased risk of HIV/AIDS and the criminal activity that is part and parcel of the sex trade. The money is also spent in ways that reinforce the buyer's perception of women as goods available for a price, a perception that is not confined to his activities with prostituted women and children, but spills over into his interactions with other women, his wife, the women in his workplace, the woman he encounters in the street. In other words, buyers' transactions inside the sex industry reinforce and bolster gender stereotyping and inequality in the rest of society. The bought. The most acute and damaging manifestation of gender inequality, of course, is the buyer's interaction with the woman or child he purchases. Even if he does not batter or rape her, a frequent reality for sex industry victims, research demonstrates that the act that he purchases is experienced by her as a violation. One victim, who went on to found the first organization of sex industry survivors, called the sex of prostitution ``bought and sold rape.'' a Russian trafficking victim I work with at Sanctuary for Families likensit to being strangled. Thousands of testimonies like these gathered by social scientists and organizations conducting research into the sex trade have led many to conclude that not only is prostitution a severe practice of sex discrimination, it is a form of violence against women and children that leaves them physically and psychologically traumatized. Often the buyer's money doesn't even make its way into the hands of the woman or girl whose body he purchases, but is handed off to the individual or group that owns her. When she does take the money, its possession is usually transitory. It is rapidly handed off to her pimp, trafficker, madam or husband, used to pay off inflated debts, or sent back to the family members who sold her into slavery. Research shows that even for the ostensible free agent, the money made from prostitution is spent on the drugs or alcohol she needs to numb her pain and depression so that she can endure another day in the sex trade. The romantic fantasy that, quote/unquote, sex work is a means to women's economic and sexual empowerment, I think described by some of the-- Congresswoman Maloney when she talked about some of the interaction with groups that have reached out to her, has been punctured by the work of organizations of sex industry survivors led by courageous women like SAGE's Norma Hotaling, Breaking Free's Vednita Carter, and GEM's Rachel Lloyd, who have documented prostitution's grim physical, psychological and economic toll, hardly a job like any other as its adherents claim. Many organizations promoting the point of view that this is a job like any other have strong financial connections to the sex industry. A couple of years ago I met a woman who held herself out as the leader of the sex workers in Mexico City, only to learn that her real work was actually running a brothel. Chairwoman Pryce. Ms. Leidholdt, I will have to ask you to sum up, too. I am sorry. We will have time to get back to you all in questions. Ms. Leidholdt. I have many, many statistics about the business. I am afraid I am going to just turn to my recommendations at the very end. When we followed the sex industry's money trail from the hands of the buyer, past the bought, into the coffers of the business, it is clear that addressing and stopping the demand for all forms of commercial sexual exploitation is essential if we are to curtail human trafficking and its devastating consequences. The Coalition applauds the Trafficking in Persons Office for its focus on demand, and urges Federal authorities to continue to look to Sweden for inspiration and guidance. We wholeheartedly support the End Demand for Sex Trafficking Act, especially the incentive it provides State and local law enforcement to marshal their resources against the buyer and the business. We hope that the swift passage and implementation of this legislation will lead to other even stronger Federal measures that will hold accountable law enforcement agencies that violate equal protection guarantees by penalizing and stigmatizing sex industry victims while ignoring the buyers who ensure their continued exploitation. The sex industry and its lobby have long tried to deny the link between prostitution and trafficking, even though research consistently demonstrates that most trafficking is for purposes of prostitution. If we address only one of the faces of this many-headed hydra, our efforts to stop the trafficking of women and children will be in vain. The Coalition is grateful to the Trafficking in Persons Office, which under the leadership of Ambassador John Miller has helped expose the many and interrelated facets of the global sex trade---- Chairwoman Pryce. The gentlewoman's time has expired. Your full statement will appear in the record, and we will get back to you with questions. [The prepared statement of Dorchen A. Leidholdt can be found on page 32 in the appendix.] Chairwoman Pryce. Ms. Thompson, thank you. STATEMENT OF LISA L. THOMPSON, LIAISON FOR THE ABOLITION OF SEXUAL TRAFFICKING, THE SALVATION ARMY NATIONAL HEADQUARTERS Ms. Thompson. Today we have heard human trafficking referred to as modern-day slavery, and I would like to take that slavery analogy a step further and introduce to you what I call the sexual gulag. The term ``gulag'' is used to describe networks of prisons or labor camps, and during the Soviet era the country built a network of prisons for slave labor called gulags so vast and brutal that the word was adopted into the English language, and its use is synonymous with inhumane and torturous prison conditions. The Soviet regime and its gulags has collapsed, but a new gulag system has risen to take its place, the sexual gulag. The sexual gulag is a global system made up of hundreds of thousands, if not millions, of brothel, bars, strip clubs, massage parlors, escort services and streets where people are sold for sex. My use of the term ``gulag'' to describe this exploitation is not hyperbole. The analysis laid out in my written testimony details the many chilling similarities between the two systems, particularly the scale of the systems and the dehumanizing treatment of those within the systems. But today we only have time to examine one point of commonality, and that is a purpose. The primary purpose of the Soviet gulag was an economic one. They produced a third of the country's gold, much of its coal and timber, and a great deal of almost everything else. But as you will see, the Soviet gulag and the sexual gulag share the same purpose, an economic one. The principal difference between the two is that the sexual gulag limits its exploitation to one industry, the sex industry. The value of the global trade in women as commodities for sex has been estimated to be between 7- and $12 billion annually. However, as the information I am going to share with you demonstrates, these estimates are astonishingly low. As I share this information, it is important to keep in mind the four following items: One, all prostitution of persons under 18 is de facto sex trafficking. Two, a high prevalence of foreign- born women in a country's sex industry is highly indicative of sex trafficking. Three, the vast majority of adult women in prostitution experience levels of physical and psychological abuse that plainly classify them as victims of sex trafficking. And four, victims of sex trafficking are used in various forms of commercial sexual exploitation such as prostitution, pornography and stripping. Thus, prostitution and sexual trafficking are intrinsically related; the existence of prostitution is the only reason sex trafficking exists. Now my main point. The sexual gulag is big business. In Japan, where prostitution is not legal, but widely tolerated, the sex industry is estimated to make $83 billion a year. There are an estimated 150,000 foreign women in its sex industry, many from the Philippines, Thailand, Korea, Russia and Latin America. Prostitution in the Philippines, a de facto legal industry, now is the fourth largest source of gross national product for the country. The sex industry in the Netherlands is estimated to make almost a billion a year, and it is a major destination country for trafficked women. In Germany, where prostitution is legal, an estimated 400,000 prostituted persons serve 1.2 million buyers a day, in an industry of an annual turnover of 18 billion U.S. Dollars. Now, in Germany, one of 12 cities to hold the World Cup matches, the city is installing a series of drive-in wooden sex huts so as to capitalize on the expected boom in the local sex trade when the games are in town. In 2003, an IPO of brothel shares was introduced on Australia's stock exchange. And a 1998 study by the IOL said that the sex sector made up as much as 14 percent of Thailand's gross domestic product. The report said, the stark reality is that the sex sector is a big business that is well entrenched in the national economies and international economy, with highly organized structures and linkages to other types of legitimate economic activity. According to the reports, the revenues generated by the sex industry were crucial to the livelihoods and earnings of potentially millions of workers beyond the, quote, prostitutes themselves. Owners, managers, pimps, related entertainment industry, segments of the tourism industry, cleaners, waitresses, cashiers, parking valets, security guards, medical practitioners, operators of food stalls, vendors of cigarettes and liquor, property owners who rent premises to providers for sexual services are just some of those who profit from the existence of a sexual gulag. In an interview of Ms. Lim, the woman who edited the IOL report, she said government policies had encouraged the growth of tourism, promoted migration for employment, promoted export of female labor for earning foreign exchange, and thus contributed indirectly to the growth of prostitution. It is clear from the monumental profits generated by the sex industry that the fight against the sexual gulag is a battle like that of David against Goliath; those who have profited have grown extremely powerful, and it will take our relentless energy, creativity and sizable resources and strategic planning to bring the giant down. Current U.S. policy recognizes the innate harm in prostitution, acknowledges the symbiosis between prostitution and sexual trafficking, and we have a national presidential security directive which makes this link. But we need to do more, including we want to see passage of the End Demand Act. We are fully behind that. But I would also suggest that the Congress mandate a report to be done by the international--in the State Department the Bureau of Narcotics and Law to look at organized crime and the financial aspects of trafficking. That would be very productive. In addition, we need to enhance the minimum standards of the Trafficking Victims Protection Reauthorization Act to include provisions such as whether the Government of a country sponsors and supports laws tasked with reducing demand for international and domestic trafficking in persons as a tier- rating estimate, as well as whether or not the Government has legalized its sex industry. Have they legalized pimping, pandering, brothel-keeping, soliciting? These are factors that should be considered for reducing them in their tier ranking. Thank you. Chairwoman Pryce. Thank you very much. [The prepared statement of Lisa L. Thompson can be found on page 47 in the appendix.] Chairwoman Pryce. I know that 5 minutes is not very long to devote to this very, very important subject, and I apologize, but those are the rules, and we will just try to get--and there is the votes. Well, we have probably about 5 minutes. Let me ask the first question just real quickly. We are trying to get a handle on some money laundering and the economy that this terrible crime supports. And how do we get those statistics? Who can this committee call upon to start to educate us? Mrs. Maloney and I were just saying how difficult it is to get our arms around this. Any advice to the committee? Ms. Leidholdt. Well, in preparing my testimony, I really tried to find out what information there was on money laundering, and there is very little information out there. I know that Professor Donna Hughes, who authored The Natasha Trade, has addressed it. And I don't know if she has testified before this subcommittee, but I think that she would be an excellent person to ask. And she has documented considerable money laundering; for example, during the late 1990s, about $10 billion, proceeds from trafficking in weapons, drugs and prostitution in Central Europe and the United States, was laundered through the Bank of New York by a Ukrainian-born crime boss. She has also documented a great deal of money laundering of the profits of prostitution and sex trafficking from Eastern Europe into businesses, banks, and real estate ventures in Israel. So I think Professor Hughes might be a good person to reach out to. Chairwoman Pryce. Ms. Thompson, you mentioned that Treasury is a good place to start. Ms. Thompson. The State Department's Bureau of International Narcotics and Law, they already do investigations on organized crime, and we just need to ask them to expand their purview and look at trafficking. It is under the global-- under Paula Dobriansky's office at the State Department. Chairwoman Pryce. Mr. O'Connor. Mr. O'Connor. On page 13 of the Trafficking in Persons Report, it says that the FBI estimates there is $9.5 billion in revenues spent each year in human trafficking. It would be fascinating to have someone from the FBI testify on how those numbers were gathered. Chairwoman Pryce. Mrs. Maloney, I will yield to you. Mrs. Maloney. There is just so much to ask, and we have to go vote. I consider sex trafficking and prostitution violence against women the worst form--I consider any discrimination violence against women, and I consider this the worst form. But since we have been working on it, believe it or not I have been contacted by several unions to, quote, legalize prostitution and to make it a clear distinction between prostitution and trafficking. And they find it offensive that as, quote, sex workers that enjoy their trade, that we are acting like they are incapable of making decisions on their own. And to me, I have a visceral reaction against the entire trade. I feel it is exploitation--I cannot imagine any other reason but exploitation. But I wanted to give that to you to hear what your response is to that. We live in a free society. One of our States, Nevada, has legalized prostitution. And if you want to think about it and get back to us in writing, or if you could respond to it. It caught me totally off guard. I did not even know what to say, because in my opinion it is exploitation and violence. Would anyone like to comment? Ms. Neuwirth. I would like to comment briefly on that, I think there are two categories of support for prostitution coming from a different place. One, the idea--it is an ideology support, that prostitution equals work; it is a form of labor that should be recognized and legitimated. And I think we simply just disagree with that, it is wrong. If you look in the trafficking report, figures are quoted, 89 percent of the women in prostitution want to escape. I don't think most people see this as a form of work, but there is an ideology minority that has been put there for that position. I think more commonly what you find is people are coming at it from a humanitarian point of view: We want to help these women; if we make it legal, it will be safer. Again, I feel that is completely the wrong direction. And that was an argument that was made, of course, with respect to slavery, let's just make it safer, more manageable; don't put all the slaves in a hold. It is just the wrong way to think about it. We want to end this institution. And before we talk about the right of prostitution, we should talk about the right to not have to be a prostitute. Mrs. Maloney. Any other comments? Ms. Leidholdt. Well, I am just very suspicious. Who are these unions; and in fact, are these really the voices of women who have been in prostitution? I mean, one thing we find, a little bit like domestic violence, when you are in an abusive and oppressive system, you don't have the freedom to speak out against it, and you say what your masters want you to say. Once you get out, you hear something very different. Norma Hotaling represents that point of view. But when we have looked at who is speaking out and saying this is a job like any other job, this is free choice, very often we are finding groups with very, very close ties to the sex industry. I mean, the sex industry has a lot of money and a lot of power, and many of these groups are indebted to the sex industry financially. Ms. Thompson. And just earlier we were speaking among ourselves, and Jessica made an incredibly poignant point about how legalization really creates the perfect umbrella for money laundering; what a better opportunity than when you normalize an activity that you can hide, you know, criminal activity under that legal regime. So I think that would be another compelling reason not to legalize. But like in the United States, the average age of entry into prostitution is between 12 and 14. So we are talking about children coming into prostitution, grow up in prostitution; one day they are a victim, the next day this is a choice. Now, that is simply because of a misunderstanding about what is going on in prostitution. And to quote one survivor, she said, ``You feel like a piece of hamburger meat, all chopped up and barely holding together.'' And that is the predominant view. There is always going to be, as Jessica pointed out, the minority of people who have experienced prostitution who tout it as liberating, but that is the minority. Mrs. Maloney. Sir. Mr. O'Connor. I can talk about minors. We rescue 15-, 16-, 17-year-old girls. If we can get them out of the brothels within a month or two of them getting there, they are always very thankful. If we get them out 5, 6, 10 months after they get there, they are not thankful at all when we first rescue them. These are orphans, or people who have been isolated from their families. They have been brutalized, and they have been told that the police will rape them if they are rescued. They are extremely afraid. And so when you see a 15-year-old telling you that, no, she wants to go back to the brothel, it is devastating. Mrs. Maloney. I just to want say--our time is up, but I think all of you are extraordinary, and your testimony was incredibly moving. I could listen to you all day. But we will not be coming back, the Chairwoman tells me, but if you could get to us any examples of what you have heard that is happening in the States around our country in combating this violence, it would be helpful. And also, I think the story of Jessica Neuwirth with Big Apple Tours, where it is obviously against our laws, against the laws of the other countries, yet the law enforcement people we went to--and we went to many, many offices--said they were powerless to react to it. And it shows the need, that we do need the law that we are working on. And if you have other ways that you think we should--other things we should be working on, if you could get it to us, we would really appreciate it. Thank you very much. Chairwoman Pryce. Ms. Moore, you have been patient. And there is probably about 7 minutes left. Would you like to take just a few minutes and ask a question or two? Ms. Moore. Thank you so much, Madam Chair. I, too, am very, very interested in this topic, and I appreciate the thrust and focus of this panel to look at the buyers in the industry. One of my trepidations about this topic has always been to wage some enforcement battle against the victims, and so I am happy to see this focus. Thank you. Chairwoman Pryce. Thank you. And once again, the record will remain open for 30 days for any member who was here--or even who wasn't here--who would like to put forth some questions. And so if you wouldn't mind answering those if any come forward, we would really appreciate it. Chairwoman Pryce. The demands of a congressional day in terms of our voting schedule are really not of our own making, and we just don't have any control over them, but we do so much appreciate what we know you do day in and day out, and once again, is it is so hard to sum up in 5 minutes. But hopefully we will continue in this battle together. Thank you for your presence here today, and we are adjourned. 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