MORE: and again, Jim Buckmaster did not post my comment (although he already posted a pretty much random one -- much less relevant -- and submitted after mine) -- I can pretty much ignore his stuff from now on (seems to be B.S.) D.
You just *can't* keep any of that money and expect people to believe that you are honest or that you care about the very serious problems you talk about here -- you must realize this. I don't know whose idea it really was, but the AGs agreed with the charging of the fee and you publicly vowed not to profit from it. As long as you keep your word, the impasse should be solvable. I would just hand over all those profits to the AGs and tell them to do as they will with it! because you have trouble giving it away as was planned and do not want to keep any of it.
I would also ask them to get together with the orgs they deem pertinent and come up with ways to solve the problem and offer honest cooperation. If they say, you should shut down the adult section and you believe it would really make no real difference -- give it a try! Shut down the erotic section in one location where it has high activity at the moment and see what happens -- are those ads truly migrating to personals in mass as you appear to believe would be the case or only a small part of them do? Given that some may suspect conflict of interest, make sure you allow a neutral party to do the determination of what is really going on and make that public regardless of their findings.
As long as there is a genuine desire to solve this problem, I see no reason why things could not drastically improve.