The Profits of Pimping: Abolishing Sex Trafficking in the United States

I am very happy to be with you this afternoon. I’m thrilled that a brilliant economist and a former colleague of mine when we were both at another think tank, Diana Furchgott-Roth, is taking up this topic and I thank her for convening this discussion. Of course, I’m always delighted to be sharing intellectual space with Michael Horowitz, a leader in the anti-trafficking movement ever since he was alerted to the trafficking of Russian women to Israel in the 1990s. Michael is driven, the way William Wilberforce was, to build a political consensus to insist that basic human rights be protected, and for that, I am deeply thankful.

I have the privilege of leading the State Department’s office dedicated to combating modern slavery, the Office to Monitor and Combat Trafficking in Persons. One of our primary jobs is to compile the annual Trafficking in Persons Report which the Secretary of State released last month. The TIP Report covers human trafficking in the areas of sexual and labor exploitation, looking and the dimensions of prosecution, protection, and prevention in each country.

One of the great benefits of this document, conceived in Congress’s wisdom, is that it draws from hundreds of sources, from all over the world. This year it covers 170 countries. So the material the office accumulates allows us to discern patterns and practices regarding the modus operandi of traffickers, among other things. Let me share some of the trends related to profits, pimps, and the sex industry—trends relevant to our domestic discussion.

Many people assume, superficially, that poverty creates human trafficking. Poverty is, certainly, a powerful contributing factor, making people vulnerable to the tricks and lies of traffickers. But other elements are common in the trafficking scenario: (1) criminals who combine greed and sadism, and (2) corrupt officials—as I’ve visited countries where members of the police are directly involved in running brothels.

Both criminals and corrupt officials are motivated by money—a powerful incentive that is, self evidently, the real driver in the economics of sex trafficking, not poverty alone. It is in fact ironic that economic gain for the traffickers and complicit government officials is even more important than economic desperation of the victims as a source of the problem. Everywhere there is a thriving sex industry exploiters need to generate a supply for the ravenous market to consume fellow human beings as sex commodities. Where do they turn? They turn to vulnerable populations: Foreign migrants and minors.

That global sex trafficking is profitable is an understatement. The United Nations Office of Drugs and Crime (UNODC) estimates that human trafficking generates some 32 billion dollars a year. Of the transnational TIP problem, we estimate two-thirds of all victims trafficked across international borders are exploited for sexual exploitation. Therefore, a sizeable portion of that $32 billion is for selling, renting, leasing people to be violated sexually over and over and over.

But let’s look at the ways traffickers, including pimps, are profiting from sexual exploitation:

A common scenario in trafficking cases is for traffickers to promise people a good job, even benefits, in order to lure them to a new workplace. Then, the traffickers add arbitrary debt as a tool of coercion. Such a debt scheme is increasingly used to enslave women and girls in prostitution throughout the world. Many women trafficked into prostitution report a never-ending cycle of debt—first they are often charged exorbitant fees for the cost of transportation, but daily expenses are frequently added and mount up exponentially. Many women trafficked into prostitution receive no money from pimps or brothel owners. This becomes a cycle of entrapment.

In the United Kingdom, according to a leading NGO, brothel keepers and traffickers force some victims to pay debts that could range as high as 20,000-40,000 pounds ($39,000-$78,000). Commenting on patterns of abuse in prostitution of East European women in London, Detective Inspector Dick Powell from Scotland Yard told the Guardian, “Some [women] have sex with as many as 40 men a day. It’s very rare [for her] to get to keep any of the money she earns. We’ve seen places where 300 pounds ($580) a day goes to the brothel pimp or ‘madam,’ and that’s even before the woman begins to try and pay off the ‘debt bondage’ of thousands of pounds charged to bring her here.” Often, the debt can never be repaid because costs for food, rent, medicines, and condoms are added every day.

Take the example of 30 year-old Mara, who left her husband and two children in Ukraine to take a housekeeping job in Italy. Recruiters from an employment agency promised her a high salary. But once there, she was taken to a brothel where the owner said he had purchased her for several hundred dollars. He said she owed him money for the plane ticket. For nine months, Mara was controlled by this trafficker, who beat her when she refused a client. If a man complained about her, the brothel owner increased her debt. Mara was freed only when the Italian police raided the brothel. Charged with prostitution, she was deported to Ukraine.

Another trend we’ve identified in the TIP Report relates to the frequency that women function as controllers, recruiters, brothel operators—even pimps. The use of women in sex trafficking networks disarms victims and increases profits. Female trafficking victims in Europe and Central and South Asia are frequently recruited and trafficked into prostitution by other women, sometimes women who were previously trafficking victims. Dubbed “Happy Trafficking” in parts of Eastern Europe and Central Asia, the method minimizes risks to organizers and maximizes profits through a “layering” of trafficking that involves multiple levels of traffickers who buy and sell and victim repeatedly. Physical and psychological pressure is combined with financial incentives, turning victims into traffickers. In part to avoid detection by authorities, traffickers grant some victims limited freedom—and even reward them financially—while coercing them to return to their home countries and recruit one or more women to replace them.

"Happy" refers to victim-cum-traffickers' practice of pretending to have had an ideal experience in legitimate jobs in the West or elsewhere, hiding the fact that they have been forced into prostitution themselves. Some anti-trafficking activists describe this "happy trafficking" as a type of simply refined psychological coercion that says, "Comply, and you'll be rewarded; cross us, and unspeakable things could happen to you and your family."

Women also serve as pimps and madams, brokering illicit commercial sexual transactions that include trafficking. From brothels in West African countries selling children for sex to others in South Africa exploiting prostituted Thai women, women are found running the operations. Criminal organizations often employ female traffickers because governments frequently exhibit leniency toward female criminals. In many countries in the former Soviet Union, female traffickers continue to receive light sentences or are granted amnesty because of sympathies for the traffickers’ children or general indifference demonstrated toward female criminals.

I met two young sex trafficking survivors in Romania who had been repatriated from a Western European capitol, the week before. As they were in a police holding area in the Bucharest airport, they saw their trafficker, a woman from their hometown, get off a flight and breeze through Baggage Claim. The girls begged the police to arrest her up but it was just one person’s word against another and the trafficker was left to go her way—a way of sewing other women’s misery.

The topic of today's forum—what makes sex trafficking profitable—is not just academic. It helps identify how to disrupt and deter the traffickers, the recruiters, the exploiters, and the pimps responsible for enslaving fellow human beings. It is essential that we do everything possible to fight sex trafficking at home both because it is a national necessity and because it strengthens my hand, as the U.S.’s chief envoy on human trafficking, in our efforts to convince other nations to cooperate with us in eradicating this evil. That includes fully holding the exploiters to account. I have urged the officials of dozens of governments to hold those responsible for sex trafficking to account—through investigations, arrest, prosecutions, convictions, and sentences commensurate with enslaving another human being.

When pimps regularly engage in force, fraud, and coercion they deserve to be treated as human traffickers and punished severely. They've robbed others of their freedom and they deserve to be robbed of theirs—locked up for a long time. All over the world we see legal prostitution as creating an enabling environment for sex trafficking. It is sad that in America today all too often pimps are not only not severely punished but treated in popular culture as admirable rebels, as hip and stylish. That's got to end. And the first place to start is to put the full force of law enforcement to punish them for putting women and girls on sale, beating them, manipulating them, and extracting all their money from them after prostituting them.

That we reverse engineer what makes sex trafficking profitable at home is important. A few days ago, I met abroad with a Secretary of a Ministry of Justice, who was also chair of an inter-agency committee to combat human trafficking (as I chair in the U.S.). Here was a perfect case when U.S. credibility in making these requests required a record of our practicing what we preach at home. In a very contentious meeting, where we had a true meeting of the minds was on two ideas: (1) we need to attack the way human trafficking pays off for the criminals responsible for it; and (2) we have to make sure that the criminals pay for their crime. In short, we must make sure this grotesque crime doesn't pay and indeed that its perpetrators pay for their crime. "Governing justly," as the Bush Administration calls the centerpiece of our diplomatic and foreign assistance policy, demands this.

I've seen the victims of the invisible but very real chains of sex trafficking in person in Mexico, Romania, Russia, Kenya, India, the United Arab Emirates, Indonesia, and Japan, to name a few places. The 2008 Annual Report, like the 2007 Report, shows that prosecutions and convictions have leveled off globally. We need to break through a ceiling of progress on achieving justice in the name of those released from their invisible chains. To do so, we must increase prosecutions and convictions at home as an exemplar, to help promote similar actions by other governments around the world.

Demanding justice for those who traffic in women and girls in the United States not only helps restore the robbed dignity of these victims in our own country, but it strengthens our moral standing to lead a campaign worldwide to insist on justice for victims everywhere. Thank you for your engagement in this incredible challenge.