- Associated Press - Saturday, December 4, 2010

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 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.

WikiLeaksPayPal 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.

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