Bill Ackman Sent a Text to the CEO of Mastercard. What Happened Next Is a Parable for ESG.

On a Saturday morning last December, Bill Ackman was scrolling through Twitter when an article in The New York Times caught his eye. “The Children of Pornhub,” by Nicholas Kristof, told how unauthorized sex — and rape and torture — videos were being spread across the internet on a website called Pornhub, one of the most popular in the world.

Ackman, who has four daughters, was outraged when he read how one teenager ended up a Pornhub victim after sending a naked video of herself to a boy she had a crush on. Harassed and humiliated, the young girl attempted suicide.

“In your mind replace the victims with your daughter or son,” the hedge fund manager and CEO of Pershing Square Capital Management wrote when he retweeted the article. “We could fix this problem.”

Then he swung into action. Ackman’s first step was to call Bradley Myles, the former CEO of anti–human trafficking nonprofit Polaris, whom Ackman had met through his charity, the Pershing Square Foundation.

“He was reaching out to me and asking what’s a metastrategy for addressing this whole area of nonconsensual intimate images. He was thinking at a strategic level,” recalls Myles, who is now a senior adviser at Panorama Global, a not-for-profit social impact platform.

Kristof’s piece wasn’t about the money behind Pornhub, which is owned by a secretive, private Canadian corporation called MindGeek, or the many corporations that profit from its existence. It focused on the writer’s moral outrage about the victims and their tragic stories of rape and abuse.

But Ackman had noticed a salient fact buried near the end of Kristof’s story: Mastercard and Visa were payment processors for Pornhub, and search engines were also part of the corporate apparatus that allowed the world’s largest porn empire to flourish. MindGeek might be privately owned, but those companies are not.

An influential shareholder activist, Ackman immediately thought about the growing interest in ethical, or ESG, investing.

And that’s where the billionaire hedge fund titan — who has unseated several corporate CEOs in his career — saw an opening. In this case, he wasn’t an investor in any of the publicly traded companies that he knew were profiting from Pornhub’s content, which is often uploaded from users the same way individuals post videos on YouTube.

But he was friendly with Mastercard’s then-CEO Ajay Banga, whom he had met through a mutual friend. Ackman texted Banga, providing a link to Kristof’s story with his tweet: “Amex, VISA and MasterCard should immediately withhold payments or withdraw until this is fixed. PayPal has already done so.” (Ackman was unaware that American Express already did not allow its card to be used on adult sites.)

Banga quickly wrote back: “We’re on it.”

Then things began to move. Within days, Mastercard announced it had “instructed the financial institutions that connect the site to our network to terminate acceptance” of Pornhub charges, saying it had found evidence of illegal activity and was continuing to investigate.

Visa also stopped processing Pornhub payments, at least temporarily, and launched an investigation. Within 24 hours of the credit card companies’ actions, Pornhub said it had taken down 10 million videos, or 80 percent of those on its site.

Since then the Parliament of Canada and the U.S. Congress both have held hearings, legislation has been proposed, and there have been calls for a criminal investigation.

A recently filed racketeering lawsuit accuses MindGeek and its executives of running a criminal enterprise.

As it turns out, the backers of MindGeek come from the pinnacle of the worlds of finance and academia, and Pornhub has had business ties with some of the most well-known corporations on the planet: The racketeering lawsuit’s defendants also include Visa and hedge fund Colbeck Capital, which helped finance the company’s growth.

“It’s shareholder money that fuels this activity,” says Ackman. He points out that while the environmental and governance efforts of ESG — or environmental, social, and governance investing — get a lot of attention, the “S” part “has come in third.”

He notes, “Lots of companies say that they’re really great with ESG issues, but they’ve got to look a little deeper.”

To be sure, Ackman is only one player in the grand scheme of Pornhub’s reckoning — which might not have occurred without Kristof’s shocking exposé. But the involvement of the high-profile financier drew more attention to a campaign for accountability that activists had been waging for almost a year — with little success.

The rest of the story can be found here:

My follow-up story details the federal racketeering lawsuit that was just filed:

One comment

  1. Michelle: Great piece! Read the entire II piece. Loved the way that you chased down every thread of the story from the U.S. to Canada to London to the European Continent to Cyprus and back. Like reading a mini-Dickens novel with good-guy Ackman & other forces of light (lawyers, journalists, NGOs, US Congress) waging battle against sinister shady villains pushing unregulated illegal porn & sex trafficking. A case study in investigative financial journalism – thanks for sending it over! Warmest regards/ Paul

    On Fri, Jun 18, 2021 at 1:16 PM Michelle Celarier wrote:

    > Michelle Celarier posted: ” On a Saturday morning last December, Bill > Ackman was scrolling through Twitter when an article in The New York Times > caught his eye. “The Children of Pornhub,” by Nicholas Kristof, told how > unauthorized sex — and rape and torture — videos were being ” >


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