Episode 8: Inside Porn's Star Chamber

maze of the pornography business. The discovery that set us off to report on four decades of breakneck change in the industry, and when you boil it down, each era involves money moving from one wealthy pornographer to another. But today thanks are different. With platforms such as Only Fans, it has never been easier for performers to shoot content on their own terms and sell it straight to fans on demand, which yes, equals more money for them, So

all good, right, Not so fast. I specialize mostly in fetish stuff, so financial domination just bitchy braddy stuff. That's Ali Knox. She's creative and bright, like many performers we've met in the series, and to make a living, she hasn't just relied on being a Dominatrix. She has carved out other personas too, thank you for being here playing with me today, So I thought I tease you a little today, to play a little bit. Fans also love to watch Alie smoke weed. Would she buys legally at

her local dispensary in Las Vegas. She could make her own videos smoking weed, and she had platforms where she could sell them. In her words, she was sovereign and when we say her, fans loved it. Ali can make around a thousand dollars a month reselling mostly old videos of her getting stoned, or she could until payments companies got cold feet. A few months ago, probably January February.

I started noticing that my videos were being rejected. So if I would upload something, the platform would say, no, you can't have this, you had drugs in it, or you had smoking. We don't allow this anymore, or you violated the terms and why. It took her quite a lot of digging around, but in the end, one of the platforms she used most got back to her. They were scared of losing access to the big credit card networks.

I can't put any videos of me smoking weed on the internet any or MasterCard has come through and said that there can be no drug use, even though again it's legal. This might not sound like such a big deal. Portant performers have for years not been allowed to drink alcohol in their films. This was surely just another one of those rules, a way to tighten up standards and protect people on set. But for Ali, losing a big

chunk of her livelihood didn't feel like added security. So now if I can't do that, I gotta go find where I'm going to make that thousand dollars. Because my mortgage hasn't changed, my car payments haven't changed. So am I going to have to go to the street? Am I going to have to escort? Am I still going to have to start crossing on my boundaries? And all of those things happened when credit card processing fucks with our income. What's so odd about Ali's situation is that

it comes after she found a degree of independence. She could make and sell her own content just as long as she had a payment channel. I had no idea when I got in the industry that my biggest, my biggest hurdle was going to be like how do I get paid? I thought I was going to meet a crazy agent or I was going to be unsafe on a porn set, all the things that people tell you, I never knew that my biggest risk was going to be how I can pay my bills. She is trying

to use crypto, but it's tough. She first has to convince people to use it, which can take days, then arrange for the payment, then wait fifteen minutes or so to confirm the transaction. It's far from ideal for impulse purchases. And this is what Ali Knox has in common with the biggest porn companies in the world. It doesn't matter if you're the owner of porn Hub or one woman enterprise.

The Visa and MasterCard networks can hobble your business. Payment companies, in the end set the limits of how any porn business can make money. So who are the people taking these kinds of decisions? Who decides what everybody from Alley to the owners of the biggest porn sites in the world can put on the Internet. In our final episode, we pull back the curtain and meet the real rulers of porn. I'm Patricia Nelson, I'm Alex Barker from Pushkin

Industries and the Financial Times. This is Hot Money Act one the Windowless Room. In previous episodes, we explained Visa and master Card were powerful enough to cripple Pornhub and mind Geek, and how payment networks, day by day influence what can be made on a commercial porn set. The real mystery to us was how did they get into a position like this. It's not like these payment companies want to be seen as pawn regulators. They didn't ask for the job, and they don't like talking about it.

Both companies declined to do an interview with us, but we did manage to track down two guys who used to be on the inside. Two guys who between them, spent a total of thirty years at Visa. First meet a dapper suite called Stanley Skogland I was the enforcer of Visas rules for a number of years. Stanley In left Visa around a decade ago, but he witnessed the crucial period for our story, the moment that Visa and master Card became the reluctant rulers of porn land. How

step by step the companies waded into porn regulation. It started with the explosion of the Internet. Payments suddenly went from in person transactions to virtual ones. They relied on trust, on everybody playing by the rules, and in the early days, pawn was the big test. It wasn't just the credit card scammers. People would pay for pawn and then if their partner found the credit card bill, a lot of

them were denial knowledge and demand a refund. Porn was a hot topic, not from a moral point of view, but because it was so desirable. But also people didn't want to get caught using pornography. That's why it became a big thing, you know, from a fraud perspective. So the banks then took that to VA said you have to do something about this. This has to stop because

we're inundated. In the early two thousands, Stanley reckons porn made up roughly ten to fifteen percent Visa's online transaction volumes. It was too big to ignore, and along with the fraud, Visa and MasterCard realized they had to work out ways to deal with content too, the really bad stuff like videos of child abuse. For some reason, those people who are interested in that, they found the Internet a very

useful place very early on. Unfortunately, it would always be clandestine, it would never be obviously child pawn, you know, inc come here and buy your images. So it was quite deceptive. I would say. It meant VISA had to build up its intelligence, find some way to track the Internet and the site selling pawn. But who was going to do that well? In the mid nineties, the man in charge of risk at VISA was a well regarded former FBI agent called Dick Held. And no, Dick Held wasn't his

cover name. Dick Held really was the guy who started to figure out how to regulate Internet porn. There was no obvious solution. Visa's initial idea was just to set up a special porn monitoring team worked from a windowless room deep inside Visa's headquarters in the San Francisco Bay area. Did you ever get in the room? And this is where we want to introduce VISA guy number two, Kevin Smith. You heard from him in an earlier episode. He's a

payments expert and Kevin loves payments. His face lights up when talking about pin codes and zip zap machines, the things that would take imprints of credit cards in the nineteen eighties. For seventeen years, Kevin worked her Visa, often handling issues related to high risk merchants, in other words, pawn and that's how he knew about the windowless room. It was this strange thing. It was. Yes, everyone knew of it, but it was it wasn't clandestine's secret. It

just wasn't talked about. I mean, it's if you look at it in hindsight, it just didn't sound right that Visa actually had this group of people that were manually going out there trying to find violations and get them shut down. I mean, it's a horrible job, incredibly laborious and manual and probably highly ineffective, which is why you needed to find a more technical solution to address it quickly. By the end of the nineties, Visa shut down the

pawn room. They pretty quickly realized that way madness lies. They knew they could never effectively screen all the horrors of the Internet, and they realized there was a much better option. They could delegate. They could outsource spying on porn to somebody else and payment system the banks and billers and service providers, and the Visa and MasterCard networks. But to outsource anything, Visa needed rules for others to apply, and when you're a global business on an issue like pawn.

That's easier said than done. If you look at it a child pornography. Everyone agrees that it's horrible, nobody wants to be associated with it. But actually there are many countries around the world that don't actually have any legislation that says, in this jurisdiction child pornography is illegal. For a company like Visa operating across the globe, even defining what is outright illegal and definitely shouldn't be processed can be tricky. Visa's main regulations run to something like nine

hundred pages. Pawn is a tiny, tiny fraction of that, but it played a special role in how the rules developed. Pawn was one of the first areas where card companies built an enforcement system to manage risky online business. When Visa and master Cards started to clamp down in the early two thousands, one adult payments veteran told us it

was like the sheriff coming to Pawntown. Real regulation, registration rules, supervision requirements, even find The unique nature of porn also made Visa and master Card deviate from a cherished principle. These payment networks succeed by being everywhere, and they can only do that by supporting all lawful commerce without taking immoral stance. Neutrality is good for business. Porn was the exception.

In the two thousands, Visa decided that since their brands gave porn sides credibility helping consumers trust them, they couldn't ignore what the porn sides were selling, even if it was strictly legal. MasterCard took a similar approach. This is Stanley Skogland. Again, those decisions we took, they were never taken lightly, because you know, Visa cannot be a police man of the world trying to say you can buy this,

but you can't buy that. You know, you can see how that could go wrong quite quickly, but especially in these instances where it was violence, where it was borderline underage kind of simulated rape. So there were areas where the legality of it wasn't necessarily what made Visa take action.

This is all encapsulated and Visa Rule one point three point three point four a ban on selling images that are illegal in most parts of the world, like beastiality or non consensual mutilation, but also on top of that, a much broader catch all clause brand protect literally a ban on anything that might bring Visa into disrepute, and out of these decisions emerged a system for keeping pawn in check, the apparatus of control we see today in

the pawn world. This was our takeaway, but we wanted to put it to people who had seen the system from the inside, so we asked Kevin straight up, the Visa and MasterCard ruled the pawn industry, probably, yes, And the reason for that is that there are there are some significant names in the industry, and they are incredibly influential, but at the end of the day, that they are

influential over their own content. Visa MasterCard cut across all of these, and yes, perversely, Visa MasterCard invertently has become

the semi regulator controller of this industry. Visa and MasterCard use their direct power with restraint, but they ultimately oversee the card networks, the networks that create that messy thicket of rules and best practice, codes that left Alie Knox unable to sell videos of her smoking weed Will Naked, and the ones that stopped Stoya, the performer and author we've heard from a few times in this series, from working when she is on her period, or even telling

her fans that she is whoever is the arbiter of what can be done with sexual media and sexual performance? Like I have no idea who they are? Did they take a philosophy class? Like are they? Do they have a degree in women's studies? After the break, we'll see whether there are any philosophers at the heart of Visa's pawn operation Act two? Playing God? This series has been about power. We've met a cast of secretive pornographers, ruthless bankers,

supercharged tech bros. And we've always been led by the question who rules porn, who ultimately decides on what can and cannot be made in this business? And now, in slightly absurd fashion, we've ended up at the doorstep of Visa and MasterCard, giant financial services providers. But who at Visa was actually deciding on porn policy? Estoya asked, are they moral philosophers, women studies PhDs? Kevin Smith had the answer because at one point he was one of the

people making these calls. You've got a number of individuals playing god in a room. That's how the process has worked. But it's offset by the fact that you've got so many different disciplines there to give you a balanced and appropriate answer based on each individual case, there's a whole raft of individuals. It's almost like the Star Chamber because I was involved in similar versions in Visa in Europe. The Star Chamber back in the Middle Ages was created

to supplement a normal court system. In England, it sometimes handled cases that were moral issues rather than clear breaches of the law, which might sound a little familiar. At its best, the Star Chamber was flexible and judicious, drawing in a wide range of opinion, but under certain kings it became a by word for arbitrary power. It was secretive, It lacked you process so difficult to imagine, you know, senior executives at VISA sitting down at a table and

being like peeing and other people, you know, sexy or not. Yeah, it's a tough job. If you're sitting there looking at a review of potential non compliance activities with the rules, You're going to look at the content, You're going to look at ridiculously sounding website names or descriptors. It comes with the territory. Maybe to you it makes perfect sense, but I think to most people, kind of most civilians, it would be quite extraordinary that these types of conversations

take place at Visa. Yeah, they probably don't realize that these conversations are happening every day, not just on adult but on every single merchant environment you can think of. For Kevin, making decisions that could affect thousands of people in the porn industry was just part of the job routine. The same goes for Stanley. He was more on the enforcement side, but helped take decisions about businesses that broke

VISA rules. He's not a philosopher, sorry Stoya, But Stanley is a trained sociologist, and as a student he happened to take classes in gender studies and the history of ideas, so Stoya wasn't that far off. Stanley and Kevin, of course, wouldn't have seen themselves as pawn regulators. They were payments professionals,

managers of risk, and facilitators of commerce. When they were at Visa, they dealt with pyramid schemes and strange frauds, with gambling, and drugs, with things that pretended to be drugs, all the crazy things you can buy online. In these cases, Visa and MasterCard were trying to apply a complex patchwork of local laws within a global payments network. But a Stayer explained pawn seems to be different. Payment networks do restrict things that are legal, like menstrual blood or cats.

Is that actually Visa and MasterCard? Here's Stanley again, ninety ninety nine percent. I can tell you that that probably isn't the case. Visasa Mastercard's rules would not be as detailed, they would not address these issues, but that Visa would say, yes, you can you shoot at home, but you can't insert an object into your body, or you can't have animals in the frame, or you can't perform sex act while

you're menstruating. No. Now, Stanley is right, Visa does not band videos with menstrual blood, not explicitly in its rules. But Stoya is also right. Menstrual blood is not allowed on most of the major porn platforms that take credit cards. Why the discrepancy? The answer is quite revealing. When Kevin and Stanley think about rules, they mean the Visa and master Card core operating rules, the commandments. They talk of them like the law. And in these regulations, Visa doesn't

explicitly band blood or smoking weed in videos. Visa enjoys an arm's length position from it all. But at the same time, VISA does encourage a whole chain of people in the pawn payment system to make judgments on its behalf.

They are told to protect the brand. They have to interpret the rules, monitor science, and promote what Visa would call best practices, and in part to keep Visa and MasterCard happy, those payment companies and platforms ban menstrual, blood and weed smoking in pawn the example the performer Ali raised, they're making all these arbitrary rules to push us off the Internet, to push us further and deeper underground. We're

constantly under threat of censorship, of regulation. Kevin and Stanley see that as different from a Visa rule, but for performers like Stayer and Ali, there is no difference in practice or in impact. It's very hard for us to live stable lifestyles. We didn't have to shoot from porn companies anymore, we didn't have to shitty agents, and then regulations came through and now are back to being fucked.

Visa and master Card clearly don't make all these decisions, but they do shape the network and try to shape an approach. We've talked lots of payment people for the series, but Kevin and Stanley, more than anyone else, helped us understand the mindset within the credit card Woppoli, the psyche of a reluctant ruler. Have they eat them right people to be the kind of ultimate quasi regulators of Paul In the absence of anyone else, I would say yes,

And that could be quite a ballsy answer. But at the end of the day, I think Visa master Card, through their relationships, they have a good local understanding of what's going on in this industry. Actually, it's challenges and it's constant evolution. I mean, there is a shared responsibility that says nobody wants to kill the industry, but it needs to make sure that as it moves forward, it's

doing so in a legally defensible way. What Kevin described is a murky self regulating system that to some extent keeps pawn in check. When he was at Visa, I can imagine he was more or less trying to do the right thing, and he worked in a system that by its very nature involves different interests that often balance one another. Picture who is sitting around the table. There will be Visa executives whose job it is to drum

up more business and encourage more transactions. Then there will be people with a different outlook, teams managing risk, worrying about the brand or the legal consequences of using Visa's power. Visa's aim, and frankly the aim of the adult industry too, is to try to find a balance where money is flowing but the risks in the system are managed. There is a recognition that everyone needs everyone else. The whole thing is symbiotic. If one of the parties falls out,

then the whole damn thing falls over. Visa and master Card, almost by accidents, have filled a power vacuum and a regulation of porn around the world. It's such a peculiar position to be in, and to Stanley, it carries obvious risks. It's difficult to judge went to intervene and went to hold back. I mean, do you think that Visa and master Card. Do you think they realize how how much power they have, how people in the adult industry see

them as their defector regulator. Yes, I think you may be onto something that if you have worked in that position a long time and you don't engage with the industry. Yes, I think there's absolutely a risk that you don't understand either the de facto power you have or how it is perceived, and perhaps that is something would benefit but Visa master Card to be more kind of self critical in their reflection of how these programs and how this

policies are implemented. Is there a better approach for Visa and master Card. We'll try to do some critical reflection ourselves with a little help from the performers Stayer. That's coming straight after the break Act three ruled by Store. We are near the end of our journey through the porn industry, and we're going back to the person who set us off at the beginning, the performer and artist Stayer. Her advice was invaluable and at least for us, totally unforgettable.

So if you try to make a podcast that's about all of porn, it's going to be scattered and messy and not make sense. You are the financial times, I suggest you stay in your lane. You focus on the business aspect, you focus on the finances. Stay in your lane. At that point, we had secretive porn barrens in our sides, big empires pumping out porn to the world. Men who lived in the shadows, fake names, no real public presence, people like Bernt Bergmeyer, Pornhub or Stefan Paco, the owner

of X Videos. We thought they were the most powerful people in porn. But what we realized is that they aren't the masters of their own fate. What we discovered is that the real rule of s of porn were much closer to home the credit card networks, and they were in plain sight. The porn barons have immense power and influence, sure, but always within boundaries defined by payment companies. Visa and MasterCard have the last word. These were in

MasterCard are truly vast corporations. Visa is the world's biggest financial company, the single biggest, and MasterCard is something like the third and let's be frank, fees are and MasterCard aren't wildly exciting companies, even for financial journalists. We all use them every day, but give them as much attention as the plumbing in our house. But by examining the pawn industry, we saw the incredible power these payment networks

wheeled over the Internet. Instead of the government defining what is and is not considered sexually acceptable, it's a corporation. A credit card company is defining what is and is not sexually okay. If you think about what the core goal is on their part. It's not necessarily you know, the good of the community or society, whatever. It's actually the protection of their brand and no fault of this.

I mean that that's what a company's there to do, but that's not necessarily the thing that we want to use as our measure of whether pornography is okay or what kind of pornography is okay. Yeah, and it feels like a really bad idea to be saying, like, actually, I think the government should pay more attention to born, but I don't think that MasterCard and Visa should be the decision makers on this. We have spoken to people

at these companies. We can tell you with absolute confidence that Visa and MasterCard don't want to be the decision makers either. They oversee a system that sets standards for world porn, but they just hate doing it. They are trapped in this thankless job deciding and enforcing moral codes on sex. It goes against all their instincts. But what's the alternative? A magic in the reaction if they did

explicitly allow payments for videos that depicted rape. So if the question is who should rule pawn, we probably don't have much choice. Cryptocurrencies are still too clunky and expensive to usurp the role of credit cards in pawn, and if crypto did take over, there might be no rules left at all. What about governments. They certainly have immense power over pawn companies within their borders, but we've talked to regulators who are trying to tighten up rules around pawn.

They struggle to get the big pawn platforms based in far off jurisdictions to even respond to their messages. They don't have the leverage of Visa and master Card or the global reach, so in practice Visa and MasterCard remain indispensable. There is nobody else. How should these payment networks use their power. There are some areas where Stoya, given the choice, might actually have taken a tougher approach, like what's so

called faux sest. If you've been on a porn site in recent years, you'll have noticed that there's a craze for sexual fantasies about step relatives. Stoya wants to see less of it around, But then she also thinks decisions like this deserve an open debate, the kind of thing a government would have when making law. Call your senator and be like, hey, I actually want to defend step in sest porn because it's a fantasy, and so we're talking about thought crimes, and you know, I think I

think Stoya is wrong. I think she's being reactionary and like over stepping. But with payment companies in control, it's impossible to have that kind of meaningful debate. You know. It's not like I can go down to the master Card office and be like, hello, I would like to have a civil dialogue about this, Like that's not going to happen. This might be one of the things that

can be improved. The arbitrary nature of that power. Visa and MasterCard maybe reluctant morality police, but that's no excuse for operating at times almost by stealth and issuing vague catch all rules that are turned by payment networks into bizarrely precise, often inconsistent restrictions. We asked master Card for a recorded interview. They were helpful with background information, but in the end end they declined if we did have

that conversation, we'd probably start with some optimism. We've tracked a crazy era for the adult industry. Pawn has gone from being scarce and expensive to being everywhere and mostly free all within a generation, and in business terms, you can finally see things kind of coming back together. The Internet is giving performers more power and independence and most importantly money. If that can improve their working conditions, that is surely welcome. We've seen how Visa and MasterCard oversee

a regulatory system for pawn. But who are these rules for. The truth is they're not designed to protect the performers. They're not designed to protect the viewer. The rules are there to protect the Visa and MasterCard brands, but it is the only system we have. How could it work better? We have one suggestion. This series has been about how big porn barons are reliant on Visa and MasterCard, and how Visa and MasterCard are reluctant rulers of the porn barons.

Those two things have created a really patchy system of rules and a weird situation where tube sides serving free porn have fewer restrictions than sites taking credit cards, even though tube sides are easier for underage people to access. If Visa and MasterCards said to an owner, you own tube sides, you own pay sites, We're going to treat

everything you own as one. That would be one way to be more consistent and bring entire to standards on moderation to help lower the risk of unlawful videos appearing on tube sites. Don't underestimate the power of Visa and MasterCard. When credit card companies call, even secretive pornographers would feel compelled to pick up the phone because right now they

don't want to talk. And that brings me back to the one moment where I thought I heard the voice of the man who was the start of this whole journey, Burned berg Meyer or BB, the ex Gorman Sax banker who I revealed was the secret owner of mine Geek. I was so excited to find his Hong Kong number. I called. A man picked up. I like to think it was BB. Hello, this is Patrician Nelson from the Financial Time this Bergmire As I introduced myself, and that

split second, maybe he thought, what do I say? Do I have anything to hide from this reporter? A millennium of shame about sex and porn might have flashed across his mind. But then maybe he reconsidered things have changed. Porn is everywhere, everyone watches it. It's a business like any other. Is it time to explain what I do? He paused and then he hung up. Hot Money is a production of The Financial Times and Pushkin Industries. It was written and reported by Me, Patrician Neilson and me

Alex Barker. Peter Sale is our lead producer and sound designer. Edith Russelo is our associate producer. Our editor is Karen Shakurgie. Amanda ka Wong is our engineer. Music compositioned by Pascal Wise, fact checking by Andrea Lopez Kusado. Our executive producers are

Cheryl Brumley and Jacob Goldstein. A Pushkin Industry's Special thanks to Mia LaBelle, letal My Lad, Justine Lang, Julia Barton, Heather Faine, John Schnaz, Maggie Taylor, Morgan Ratner, Eric Sandler, Jake Flanagan, Jordan McMillan, Mary Beth Smith, Isabella Nervis, Sean Carney, Carlie Migliori, Maya Kanig, Daniela Lakhan, Nicole Morano and Jacob Weissberg at The Financial Times Special thanks to Renee Kaplan and Ruler Khalaf, Alista Key, Kendra, James, Nigel Hansson, Molly Eisner,

Ronda Taylor, Breen Turner, Nicholas Stansfield Peter Spiegel, Philippa Goodrich, Kevin Wilson, Carolina Vargas, Manuela Saragosa tofer foreheadge Laura Clark, Matt Garrahan, Andrew Georgiades, Petros Gion passes, Richard Martin, Barney Jobson, Daniel Dombie, Cynthia Omoreho and voice Mihawark