Investigation Shows Big Business = Funding Sex Chat=20 Rooms

Companies Pull Ads After Station = Exposes=20 Problem

UPDATED: = 7:30 am PDT=20 June 1, 2005

HOUSTON --=20 Several well-known companies have pulled ads from a = popular=20 online chat room service after an investigation by Houston=20 television station KPRC revealed to them what their money = was=20 funding.

Yahoo! is facing a $10 million lawsuit that accuses = it of=20 cashing in on some disturbing chat rooms. The stations'=20 investigation showed what's really going on in those rooms.

The companies are paying huge fees for their ads to = appear on=20 Yahoo!. But many are now canceling those ads because of the = report.=20 The discovery has prompted fast action in corporate America = and a=20 strong reaction at the nation's capital.

"Yes, more legislation is required. The law has not = kept up=20 with this type of criminal activity," U.S. Rep. Ted Poe, = R-Texas,=20 told the station.

Among the thousands of chat room titles, where people = can=20 look for common interests like music or movies, there are = other=20 rooms with some disturbing titles, such as:

9-17-Year-Olds Wantin' Sex=20
Younger Girls 4 Older Guys=20
Girls 13 And Under For Older Guys=20
Girls 13 And Up For Much Older Man=20
Girls 8 to 13 Watch Boys (In A Particular Sex Act) =

The station found all of those rooms listed as = education chat=20 rooms, sponsored day in and day out by some major companies=20 consumers have heard of -- all paying money for their ads to = be seen=20 before a person enters the child-sex chat rooms.

"Children are the largest victimized group in this = country,=20 and we need corporations to do the right thing," Child Rescue=20 Network, Inc. spokesman Charles Clickman told the = station.

Before entering the chat room titled "5 To = 13-Year-Old=20 Kiddies Who Love Sex" or "Girls 5 To 13 For Older Men," = guests were=20 required to click on a Star Wars-themed ad from Diet Pepsi.

Inside the chat rooms, not only were men trying to = meet=20 children or even take them away from home to run away, the = station=20 found countless adult men using Web cameras to send children = in the=20 room lewd pictures or display live nude images of = themselves.

However, the nation's top law enforcement officers = said it is=20 all legal.

"Short of changes in the law in Congress, we may be = limited=20 about what we can do in this area," U.S. Attorney General = Alberto=20 Gonzales said.

Gonzales told the station he can't use the laws now = on the=20 books to shut down Yahoo!'s child sex site. But back in = 2002, the=20 station broke the story when federal officials shut down a = Web site=20 called "Candyman" with those existing laws.

Pepsi, State Farm Insurance,=20 Countrywide Mortgage and several other large=20 corporations pull their ads from Yahoo after a = Local 2=20 Troubleshooters investigation shows their ads = appearing=20 on sexually-explicit chat rooms promoting sex = with=20 = children.

The "Candyman" site was geared only toward trading = child sex=20 pictures and stories, just like the Yahoo! rooms.

"By doing what they're doing here with the = advertising, this=20 is endangering children and that's serious. I'm offended as = a parent=20 and I'm offended as a child advocate," Clickman said.

Sponsors around the country are reacting to what the=20 investigation found.

The station called Pepsi for comment and the company = quickly=20 pulled its ads. A statement from Pepsi said, "We were = completely=20 unaware that our advertisements were associated with these = chat=20 rooms in any way."

Countrywide Mortgage pulled its ad for refinancing = because of=20 the investigation. The company said, "We took measures to = ensure=20 that a situation like this could not occur again."

State Farm Insurance also pulled its ads, not only = from the=20 chat room but also from all Yahoo! sites. The company said, = "We will=20 be suspending our online advertising with Yahoo! until it = provides=20 us a detailed explanation of how this situation was allowed = to=20 happen in violation of our contract, and until we receive = sufficient=20 assurance that our advertising will never again appear on=20 inappropriate sites."

The same goes for Georgia-Pacific, maker of Brawny = paper=20 towels. Its ads were pulled, and a spokeswoman said Yahoo! = admitted=20 it did not adhere to the advertising contract with Brawny. = The=20 Troubleshooters found Brawny ads in a Yahoo! chat room = called "6 To=20 11 Year Old Girls Into Older Men."

Another big sponsor, T-Mobile, did not respond to the = station's request for comment.

"Yahoo! is aware of the situation now. They are put = on public=20 notice by (KPRC) and other people about what is taking = place, and=20 they need to come up with a solution to the problem unless = they want=20 the government to get involved and hold them liable, either = civilly=20 or even criminally, for these types of activities," Poe = said.

Online ads just pushed Yahoo!'s income to more than = double=20 what it was a year ago -- up to $205 million.

Yahoo! executives declined to answer the stations' = questions=20 but issued a statement saying, "Yahoo! strongly supports law = enforcements' efforts to combat illegal activity on the = Internet and=20 works cooperatively with law enforcement to aid in their=20 investigations."

The statement also said Yahoo!'s terms of service do = not=20 allow illegal activities, but those same child sex chat = rooms are=20 being hosted by Yahoo!.

The lawsuit against Yahoo! accuses the company of=20 capitalizing on child pornography when it hosted the = Candyman site,=20 and with the other sites like the ones the station found = still in=20 action.

The lawsuit by the family of one child porn victim = said=20 Yahoo! could have removed the sites, but instead chose to = make money=20 on them.

Distributed by Internet Broadcasting = Systems, Inc.=20 This material may not be published, broadcast, rewritten or=20 redistributed.