Ties to Adult Lead to Controversy for Pmints

CHARLOTTESVILLE, Va. — Startup Internet payment processing company Pmints has recently been dropped from a program at the University of Virginia’s Darden School of Business, because of the company’s association with adult content, according to media reports.

The “Darden Incubator” program is designed to “promote early stage business ventures involving Darden MBA students,” according to the school's website. Pmints CEO Rafael Diaz-Tushman is a graduate student at Darden.

Earlier this month Charlottesville-based newspaper the Daily Progress reported that part of Pmints’ business plan was to process payments related to the adult entertainment industry.

Suddenly what was once deemed a promising startup venture involving a Darden student apparently became a political liability, as Darden began receiving complaints from angry alumni and local activists that were upset by the school’s association with a company that was connected to the adult industry.

According to the Daily Progress, one such angry alumnus was Oliver Asher, a graduate of the university who these days serves as vice president of a Christian ministry organization called Advancing Native Missions.

“Honestly, it appears to be more opportunist than innovative,” Asher wrote in a letter to Darden Dean Robert F. Bruner. “PayPal could have offered this service long ago if they had chosen to; however, they chose the high road. I believe this goes against the principles of servant leadership in considering the value of people over profit.”

Among other things, Asher’s comments regarding PayPal can be viewed as inaccurate. While the company stopped processing charges for adult websites in 2002, PayPal continues to allow users of eBay to purchase adult materials using PayPal and still processes gambling transactions in countries where online gaming is legal.

It’s not clear if Asher is simply unaware of the nuances of PayPal’s policy with regards to the adult entertainment sector, or if he just conveniently ignored those nuances. What is clear is that Pmints’ intention to process for adult websites has cost it the benefits offered by the Darden Incubator — resources that include office space, access to faculty advisers, legal support and stipends, according to the Daily Progress.

In a statement issued Monday, Bruner said that while the school supports Diaz-Tushman as an MBA student, the school and the Pmints CEO “mutually agreed” to sever ties between Darden and Pmints.

“The school, as a public institution of the commonwealth of Virginia, cannot directly support, financially or otherwise, his startup venture, Pmints, because of the nature of some aspects of the business,” Bruner said in the statement.

While Diaz-Tushman has thus far declined to criticize Darden over its decision to drop his company from the Incubator project, there does appear to be some discrepancy over what was known about his company and when it was known.

Diaz-Tushman told the Daily Progress that the school “definitely knew all about us” prior to the article that ran earlier this month. A spokesperson for Darden, however, said that Bruner did not know about the company’s association with adult entertainment and gambling until after reading the article.

“I think it would actually be surprising if he [Bruner] knew the details of a company in the incubator,” said Beth Schmidt, media relations director for Darden. “He doesn’t get into the nitty-gritty like that.”

On its website, Pmints certainly makes no attempt to conceal its association with the adult entertainment industry; the site’s fledgling “merchant directory” clearly lists a section labeled “adult,” which currently has more listings (eight) than any other merchant category, including listings for GameLink, VideoBox and Xtube.

Although the controversy resulted in Pmints dropping out of the Darden Incubator project, Diaz-Tushman said the company is going to be just fine.

“It’s not going to affect the company,” Diaz-Tushman said. “Things are going well.”

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