A US independent news site which relies upon reader donations has had some of its air supply cut off by PayPal.

In a email sent to WhatReallyHappened.com yesterday, PayPal's Orwellian-sounding "Merchant Risk Department" wrote:

As you know, the PayPal User Agreement states that PayPal, at its sole discretion, reserves the right to close an account at any time for any reason. We write to inform you that, after a review of your site, and in accordance with the User Agreement, your account has been closed. Your funds will be held for 180 days from the date of the last transaction on the account. After 180 days have expired, we will refund your funds by mailing a check to the address linked to your account.

Sincerely,
Merchant Risk Department

Sincerely?

Now for WhatReallyHappened.com's reply:

Now, as an experiment, type the words "PayPal" and "Porno" into any search engine. I used Google and got a list of hundreds of pornography web sites that PayPal does not seem to have any qualms about doing business with!

Note also that PayPal is going to hold onto the funds YOU have already donated for almost 6 months before turning them over to us.

Direct email to customercare@paypal.com

What risk to PayPal's financial stability does WhatReallyHappened.com present? Remember, this is a mechanism for donations. Could it be that someone was really pissed at the site's Let's-not-go -to war with Iraq position?

PayPal dominates the US online micropayments scene. Which means that it has to behave better than its competitors. On this evidence, the eBay subsidiary has failed, once again, to grow into its responsibilities. ®