Inside eBay Billionaire Pierre Omidyar's Battle To End Human Trafficking
This story appears in the November 19, 2012 issue of Forbes.
Pierre Omidyar (Photo: Michelle Clement) is behind a $115 million push to end trafficking. Click for more photos.
Pierre Omidyar looked out over Nepal’s Kathmandu Valley this past February, scanning the horizon with his camera in hand. All the billionaire eBay founder could see for miles were huge, belching chimneys taller than houses and mountains of red bricks drying in the winter sun. Kids of 12 or 13 lugged bricks on their backs to and from these ovens, 80 pounds at a time. Ninety percent of the workers here in Bhaktapur, the heart of Nepal’s brick sector, are slaves. Day after day they incur more debt to the traffickers who found them these jobs and hovels to live in nearby.
As Omidyar walked around snapping photos, he grew more certain that he wasn’t seeing the whole picture. “They don’t let people like us visit the bad kilns,” he says. “I extrapolated. If this is one of the good ones, what does a bad one look like?”
How Pierre And Pam Omidyar Invest Their eBay Billions With Impact
Photos: Inside Pierre Omidyar's Battle To End Human Trafficking
It’s a question he’s trying to make permanently moot. Omidyar and his wife, Pam, are taking their considerable fortune and business acumen and deploying them in an ambitious effort to end modern-day slavery. Nepal, they’ve decided, will be their case study; success would have global ramifications.
This means creating Omidyar-funded options so that Bhaktapur’s children won’t feel compelled to sign the human traffickers’ bogus, exploitative contracts. First up: a $600,000 grant that will pay for 2,500 working kids to leave the dangerous, dirty Nepalese kilns and go to school. Next the Omidyars plan to pay for entrepreneurship and money management training to help 4,000 more brick workers escape slavery.
In the past four years the Omidyars have become the single biggest private donors to the fight against the pernicious but lucrative human trafficking industry. They’ve invested $115 million to date in their Humanity United foundation, which funds 85 antislavery nonprofits as well as on-the-ground projects in five countries, including this first one in Nepal. They’ve pledged to spend another $50 million by 2016.
They’re up against increasingly sophisticated sex and labor trafficking rings, many backed by organized crime, in a business that generates $32 billion in worldwide revenues a year, according to the UN. But the Omidyars have recruited powerful partners that stand the best chance to date to win the battle.
When eBay went public in 1998, Pierre Omidyar “skipped ‘regular rich’ and went straight to ‘ridiculous rich,’ ” he says. He and Pam, a molecular scientist and his college sweetheart from Tufts, decided immediately that they’d give the vast majority of their wealth away within their lifetimes (they’ve since signed the Giving Pledge). Both just 31 then and worth more than $7 billion, it was a serious, overwhelming proposition. It took a few early years of earnest, scattershot check-writing across a handful of charities before they focused on trafficking as a target.
Humanity United was Pam’s idea. While Pierre expanded his auction site into a multibillion-dollar public company, she spent her days holed up in a UC Santa Cruz biology lab doing pharmaceutical research for her master’s degree, rarely surfacing to read the news. “I insulated myself against world events,” she says. During a stay in Pierre’s birth city of Paris in the early 2000s, she had time to flip through a National Geographic and landed on a piece about Darfur, at the time descending into civil war. She was horrified at the stories of Sudanese child soldiers and trafficked refugees. She did some digging but couldn’t find much coverage of modern-day slavery in the press or any evidence of attention from rich philanthropists.
Pam and Pierre Omidyar (Photo: Michele Clement)
Pam decided the couple’s donations to charities like Doctors Without Borders and Oxfam, however generous, were no longer cutting it. Pierre was immediately on board. Sudan would join Nepal on the list of countries they eventually chose to focus their cash on first, along with Congo, Liberia and the U.S., where more than 40,000 women, men and kids are being held as sex slaves, unpaid domestic workers or forced field hands at any given time.
The Omidyars decided they wouldn’t start from scratch unless they absolutely had to. In the U.S. they found a smattering of disparate antislavery NGOs, most of them small and working in isolation. In Florida evangelicals from the faith-based International Justice Mission were trying to free Mexican tomato pickers from forced labor with a group called the Coalition of Immokalee Workers. In California social workers from the Coalition to Abolish Slavery & Trafficking were working to free women trapped in domestic servitude in Los Angeles, as well as monitoring a growing problem of unpaid farm laborers upstate. Both groups were lobbying for the same antitrafficking legislation with little funding and no cooperation.
Pierre, Pam and their team at Humanity United found the best of these U.S. antislavery nonprofits, grouped them under one umbrella–the Alliance to End Slavery & Trafficking–and invested $8 million across all 12 of them. They didn’t meddle much, trusting that the new group would know best how to make a joint case to Congress to pass a raft of laws.
It’s the same tenet Pierre remembers invoking as a twentysomething computer programmer: Give someone the right tools and the benefit of the doubt, and they’ll rarely screw you. (It was, he recalls, rather tougher to convince the jaded tech press that his new auction platform wouldn’t be overrun with cheaters and counterfeiters.) “In the early days of eBay I articulated for the very first time this belief that people are basically good,” he says. “Ebay’s success as a company depends on the success of the community of sellers.”
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The Omidyars’ $165 million pledge to Humanity United is just part of the $1.25 billion they’ve given away to date to philanthropic causes–both nonprofit grants and for-profit investments, mostly in companies that would be considered early stage by Silicon Valley standards. The Omidyar Network’s for-profit portfolio spreads $100 million across 28 microfinance operations as well as smaller injections of capital into startups in developing countries: a mobile payment firm in Zambia and a solar lighting venture on the Indian subcontinent, for example. “For some reason people think that doing good is giving money away and business is just business,” says Matt Bannick, who runs the Omidyar Network. “It’s an artificial bifurcation. Businesses can have a social impact. People are earning their livelihoods on eBay.”
So far the slavery alliance hasn’t let the Omidyars down. A year after Humanity United’s grant kicked in, the combined advocacy efforts of these ex-slaves, social workers, lawyers and churches secured 90% of the amendments they’d requested to the 2008 Trafficking Victims Protection Reauthorization Act, which helps rescued slaves secure visas and protect themselves from retribution from their traffickers. In 2010 the group lobbied for, and won, a landmark $12 million increase in U.S. federal antitrafficking funds.
To antislavery experts, having the Omidyars’ names attached to the cause has helped legitimize it. “These small NGOs are now part of a whole,” says Kevin Bales, who in 1999 published Disposable People , considered a seminal work on modern slavery (and the first book Pam looked for after reading National Geographic ). “They’re not just going cap in hand to senators. If you want a politician to show up for anything, put a billionaire’s name on it.”
The Omidyars’ investment in the alliance also pays for ex-slaves to train as advocates, meeting regularly with politicians to put a clearer face on the misunderstood business of trafficking. FORBES met a member of this national Survivors’ Caucus, Ima Matul, in a former convent in a grubby part of Los Angeles. It’s been converted into a comfortable shelter run by the Coalition to Abolish Slavery & Trafficking, one of the 12 U.S. antitrafficking groups funded by the Omidyars. She’s one of 550 slaves from 58 countries the Coalition has helped rescue.
Indonesian, petite and dressed in corporate casual, Matul perches on a leather sofa in the home’s large living room. Along one wall is a row of desktop computers where Ethiopian residents often watch soaps from their home country on YouTube. In a sunny back garden vines half-obscure a stone grotto containing a shrine to the Virgin Mary, a relic from the home’s convent days. The shelter is ten minutes from West Hollywood, where Matul spent three years as a teenaged domestic slave.
She’d already escaped an abusive arranged marriage at age 16 by the time she arrived in L.A. from the East Javanese city of Malang. Her traffickers, an Indonesian couple expecting baby number two, reeled off a list of expectations as soon as she arrived in their handsome home. She’d be a cook, cleaner, housekeeper, nanny, and gardener, all for a promised salary of $150 a month, which never materialized. She was beaten daily. If the wife found a patch of rogue dirt or dust in the house, she’d smear it across Matul’s face. Unable to speak English, she felt trapped and was repeatedly warned she’d be jailed if she tried to escape, a common tactic traffickers use to control young, naive victims.
When Matul was finally able to run away with the help of a nanny working next door, CAST gave her shelter, helped her train for a job in a law firm and then hired her to teach fellow survivors to lobby legislators. Last year Matul testified before Congress as part of a push to see the Trafficking Victims Protection Act reauthorized. Right now it remains stalled in the House; it’ll be up for discussion in the first session following the presidential election. Among other measures it would make it easier for courts to prosecute traffickers. Matul knows firsthand how important the bill is because the woman who held her captive never spent a day in jail.
Humanity United’s latest milestone has been rather more public than the passage of biennial bills or the funding of Nepalese schools. In a speech at September’s annual Clinton Global Initiative conference in New York, President Obama announced a partnership between Humanity United and the White House, backed by $6 million from sponsors including Goldman Sachs in its first big donation to anything slavery-related. “We’re going after the traffickers,” said Obama to a mixture of applause and stunned faces.
The President reeled off new initiatives, all of which will serve to boost Humanity United’s work at the federal level. There’ll be training to help police, Amtrak ticket-takers, teachers and others likely to encounter slaves to better identify them as victims rather than prostitutes or runaways. Tech and Internet companies will be offered incentives to help make the Web safer rather than a tool for traffickers to recruit or sell their wares. There’ll be simpler visa procedures for victims, he said. And, crucially, his administration would be helping take forced labor out of the business supply chain, starting with U.S. government contractors.
“The idea that there are exploitative labor practices that pollute the supply chain, more people are aware of now,” says Pierre, noting also the recent flurry of media attention on Chinese iPhone manufacturer Foxconn. “They are starting to think about, do I want to have a piece of equipment that’s made by people in these horrible working conditions? Sweatshops, basically.”
He had to miss Obama’s announcement, which coincided with an eBay board meeting (it still pays the bills, after all). Pam, however, was in the audience blinking back tears. “It was the longest speech on the topic of slavery since Lincoln was in office,” she says. Not far from Pam sat Ima Matul. Before the address the President had sought out the Humanity United delegation and greeted Matul in her native tongue, the Indonesian language Bahasa. Toward the end of his speech President Obama asked that she stand and be recognized for her work.
Pierre has taken a leadership role among Giving Pledge members and fellow billionaires , teaching how to use entrepreneurial skills to tackle the world’s problems. Former eBay colleague Jeff Skoll and Google cofounders Sergey Brin and Larry Page have both backed antislavery initiatives through their respective foundations after consulting with Humanity United.
Overseas, Australian mining billionaire Andrew Forrest has been working toward eradicating trafficking in his own hemisphere. He was moved to found the Perth-based nonprofit Walk Free after a close encounter with slavery. His teenage daughter had been volunteering at an orphanage when it emerged the youngsters weren’t being cared for but rather groomed for sex work.
“‘Value add’ is a horrific term when applied to children,” says Forrest, Australia’s third-richest person. “We had a catatonic reaction to it.” He talks regularly with Humanity United executives to ensure the two groups are working in tandem as much as possible. Like Pierre, Forrest is now a full-time philanthropist; he stepped down as CEO of his Fortescue Metals Group to focus on giving his money away. He also shares the Omidyars’ hope that other NGOs, governments and wealthy individuals will start devoting attention and much-needed funds on ridding slavery from the business supply chain, where it remains prevalent. Big-box store chains are especially susceptible to relying on cheap or forced labor in developing countries, often unaware. “It’s the dark side of globalization,” Forrest says.
For Pierre’s part, he’s encouraged by his February visit to Nepal. He stood in the hallway of a brick kiln school funded by Humanity United money, observing from a distance and taking the occasional photo for his amateur portfolio. Pam sat on the floor of the classroom, joining in the lesson. “I would’ve expected, oh, these are terrible victims, and they’re being beaten every day so they’re kind of downcast, like you might see in the movies, walking around with hunched shoulders,” Pierre says. “They’re regular little kids, and the ones who are in school are raising their hands.”
Inside eBay Billionaire Pierre Omidyar's Battle To End Human Trafficking
The eBay billionaire and his wife Pam are the biggest single donors to the fight against trafficking.