Hurricane Katrina versus Something Awful

[Occhidiangela]

Most of you know about the website Something Awful.  I'm a paid member of the expansive forums there, so I've been following this pretty closely.

Something Awful (heretofore dubbed "SA") has (had?) its servers located in downtown New Orleans.  Well, you can guess what happened.  Despite valiant efforts from their hosting company, it went blank.  The owner of SA, Rich "Lowtax" Kyanka, managed to get some hosting elsewhere to serve up a small front page in the meantime.  The only thing online right now is that front page.  The forums, articles, and everything else is gone.  You can read for yourself what is transpiring (start from the bottom and work your way up), but if you hate long reads with lots of cursing, I'll summarize.

First, a backstory relevant to this.  SA used to use PayPal for any purchases.  They used it for account purchases, account upgrades, and SA merchandise.  One day PayPal pulled the plug on SA purchases.  I guess it was too close to a hardcore porn site for PayPal's tastes, or something like that.  Lowtax cursed a lot and switched to a Credit Card merchant system, and was glad to be free of PayPal's smothering policies.

Fast forward to a few days ago.  SA goes blank, and Lowtax gets a small bit of hosting for a front page.  One of the first things he does is set up a PayPal account for accepting donations to go directly to the Red Cross (he has no access to his Credit Card merchant account, which is sitting with his servers somewhere in downtown New Orleans), and starts the ball rolling with $3,000 of his own money.  The account amasses over $13,000 in a few hours, then goes to $20,000 a few hours later.  All of this money (less PayPal's cut) would go directly to the Red Cross.

(SA is really great when it comes to charity drives.  Since I've been a member there, I can recall a $20k+ purchase of body armor for US soldiers, multiple drives to buy thousands of dollars of toys for terminally ill children, a drive to pay for a member's kidney transplant, and countless others.  SA forum members are a very giving bunch.)

Then PayPal froze the account.  PayPal has now put the smother on more than $20,000 of donations earmarked entirely for the Red Cross and its efforts in New Orleans (minus PayPal's cut, of course).  Those donations are now effectively owned by eBay and PayPal pending resolution of this matter, and if you've ever dealt with PayPal before this could take a long time to resolve.  In the meantime, people in New Orleans couldn't give two craps about PayPal or SA and just want some damned help.
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Man, that strikes me as just plain weird, and a potentially black eye for PayPal's rep. I am sure Slashdot will hear of this soon. :P Is it possible that PayPal is worried about fraud? There have been articles already about the number of fraudulant donation solitications in the past three days, even down here in South Texas.

Do we have PayPal's side of the story?

Occhi