PayPal cuts WikiLeaks from money flow over website's 'illegal activity'

BERLIN -- WikiLeaks has lost a major source of revenue after the online payment service provider PayPal cut off its account used to collect donations, saying the website is engaged in illegal activity.

The announcement also came as WikiLeaks is struggling to keep its website accessible after service providers such as Amazon dropped contracts, and governments and hackers continued to hound the organization.

The weekend move by PayPal came as WikiLeaks' release of hundreds of thousands of United States diplomatic cables brought commercial organizations on the Internet that have business ties with the organization under more scrutiny.

WikiLeaks also is under legal pressure in several countries, including the U.S., and a former colleague of founder Julian Assange has said he will launch of a competing platform.

Donating money to WikiLeaks via PayPal was not possible anymore on Saturday, generating an error message saying: "This recipient is currently unable to receive money."

PayPal said in a blog posting that cutting off WikiLeaks' account was prompted by a violation of the service provider's policy, "which states that our payment service cannot be used for any activities that encourage, promote, facilitate or instruct others to engage in illegal activity."

The short notice was dated Friday, and a spokeswoman for PayPal Germany declined on Saturday to elaborate and referred to the official blog posting.

WikiLeaks confirmed the


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latest trouble in its Twitter account, saying: "PayPal bans WikiLeaks after U.S. government pressure."

WikiLeaks has embarrassed Washington and foreign leaders by releasing a trove of brutally frank U.S. diplomatic cables.

PayPal, a subsidiary of U.S.-based online marketplace operator EBay Inc., offers online payment services that are one of several ways WikiLeaks collects donations -- and until now was probably the most secure and convenient way to support the organization.

The other options listed on WikiLeaks' website are through mail to an Australian post office box, through bank transfers to accounts in Switzerland, Germany or Iceland, as well as through one "credit card processing partner" in Switzerland.

WikiLeaks' PayPal account redirects users to a German foundation which provides the organization with the money. The Wau Holland Foundation, named after a German hacker, confirmed Saturday in a Twitter message that its PayPal account had been taken down because of the "financial support to WikiLeaks."

The foundation's president, Winfried Motzkus, earlier this week was quoted by the local newspaper Neue Westfaelische in his hometown of Bielefeld as saying that Wau Holland has collected euro750,000 ($1 million) for WikiLeaks, covering the organization's expenses.

WikiLeaks' recent releases seem to have been a boon for the foundation, which had previously described itself as the organization's main financial backer.

On its website, the foundation said "the huge and in this form unique amount of donations has caused the delay of issuing contribution receipts" -- which allow Germans to deduct donations from their taxes.

Messages left for the foundation and for Motzkus were not immediately answered.

While WikiLeaks vows to make the world a more transparent place, very little is known about its day-to-day functioning. It has no headquarters, few if any paid staff and its finances remain opaque.

Wau Holland's vice president, Hendrik Heye Fulda, last month told the German daily Sueddeutsche Zeitung that WikiLeaks operates on a tight annual budget of about $200,000. Fulda could not be reached for comment Saturday.

Meanwhile, Daniel Domscheit-Berg, a former WikiLeaks' spokesman, has announced plans to launch a new and more transparent platform on his own, German news magazine Focus reported.

It will provide the technical infrastructure for anonymous postings and allow informants to choose themselves how and by whom to publish the information, Focus quoted Domscheit-Berg as saying. The 32-year-old Domscheit-Berg, who also has used the name Daniel Schmitt, said he will soon publish a book about his time with Assange at the website.

On Friday, WikiLeaks was forced to move from one website to another as governments and hackers hounded the organization, trying to deprive it of a direct line to the public.

EveryDNS, a company based in Manchester, New Hampshire, stopped directing traffic to the website wikileaks.org late Thursday, saying cyber attacks threatened the rest of its network.

But while wikileaks.org remained unreachable Saturday, it has found new homes. Its German website wikileaks.de was reachable Saturday, and so was its Swiss domain.

The Swiss address directs traffic to servers in France, where political pressure quickly mounted with Industry Minister Eric Besson on Friday, saying it was unacceptable to host a site that "violates the secret of diplomatic relations."

The web hosting company OVH confirmed that it had been hosting WikiLeaks since early Thursday, after a client asked for a "dedicated server with ... protection against attacks," adding it was now up to the courts to decide on the legality of hosting the site on French soil.

French newspaper Le Monde -- which was among the publications that were granted full access to the diplomatic cables beforehand -- said in one of its online articles Saturday it could not provide links to the relevant cables "as a result of the computer attacks WikiLeaks has suffered and the refusal of some Internet hosts and countries to take in the site."

Media freedom watchdog Reporters Without Borders on Saturday condemned the personal attacks on Assange and "the blocking, cyber-attacks and political pressure" in what it called the first "attempt at the international community level to censor a website dedicated to the principle of transparency."

WikiLeaks has been brought down numerous times this week by what appear to be denial-of-service attacks. In a typical such attack, remote computers commandeered by rogue programs bombard a website with so many data packets that it becomes overwhelmed and unavailable to visitors. Pinpointing the culprits is difficult. The attacks are relatively easy to mount and can be performed by amateurs.

The attacks started Sunday, just before WikiLeaks released the diplomatic cables. To deal with the flood of traffic, WikiLeaks moved to Amazon.com's Web hosting facility.

But Amazon booted WikiLeaks from the site on Wednesday after U.S. congressional staffers started asking the company about its relationship to WikiLeaks.

The U.S. is currently conducting a criminal investigation into WikiLeaks' release of the diplomatic cables.