WASHINGTON, D.C. – It was a day that may go down in adult history. It was only the second time that the Federal Bureau of Investigation (FBI) had invited an array of adult industry representatives to discuss their mutual interest in the regulations and inspections under 18 U.S.C. §2257, the federal recordkeeping and labeling law ... and the first time that journalists from the adult media had been allowed to be present.
In all, 18 people attended the meeting, which was held in a large conference room at the bureau's Washington headquarters: Six from the FBI, including the heads of the bureau's sole inspection team, Chuck Joyner and Stephen Lawrence; four attorneys representing adult interests, six industry executives, and two reporters.
Kenneth W. Kaiser, Assistant Director of the Inspection Division, convened the meeting shortly after 1 p.m. on Thursday, and after everyone present had introduced him/herself, Joyner announced the good news/bad news: Of the 24 inspections conducted so far (all apparently in California), four companies had been found to be in total compliance, 15 had been found to have had "unintentional violations" (which it was later revealed consisted mainly of failure to properly cross-index the performer identification records), and five were found to have been in "willful violation of the law." Joyner said that those five companies had been reinspected after an undisclosed period of time and were still found to be in violation, and that all reports of the inspections had been delivered to the Department of Justice (DOJ). Section Chief John V. Gillies later told the group that the Justice Department had not yet made any decisions as to filing charges against any of the companies.
Gillies also said that he was concerned that companies found to be not in compliance had apparently not taken steps to cure their violations, but lauded both Joyner and Lawrence for their efforts to communicate the FBI's mission to the adult industry by giving interviews and appearing on panels at adult events.
Attorney Paul Cambria, representing LFP, opened the industry side of the conversation by assuring the government that his clients who had been inspected have had no issues with the way the FBI had been conducting its inspections. However, he noted, now that the agents had had a fair amount of experience with the inspection process, and knowing that Free Speech Coalition, among others, had commented on the proposed revisions to the 2257 regulations, Cambria told the assemblage that he felt that several of the revisions seemed to serve no purpose in identifying minors in the industry, but rather seemed designed to curtail the production of lawful adult material. Cambria hoped, therefore, that the bureau would look at the practicality of the new regulations and note for itself that many of the revisions had nothing to do with determining the age of performers, and that the bureau might suggest to the DOJ that new regulations were not needed.
Kaiser agreed that the adult companies had all been cooperative with the inspectors, but claimed that, "We have no impact on legislative matters."
Cambria replied that he wasn't asking the bureau to try to influence the legislation itself, but merely the regulations to implement the legislation, and again asked the agents simply to "just share your information" with the Justice Department.
Kaiser said that in fact the bureau had already done that, in a report authored by Erin Zucker, the bureau's assistant general counsel who had been present at the first FBI/industry summit last October.
Attorney Jeffrey Douglas, representing both Red Light District and the Free Speech Coalition, agreed with Cambria that the FBI communicating its experiences regarding inspections with the Justice Department would be helpful. However, he said, many government agencies which have the duty to inspect private industry have generated forms which the companies can use to assist those agencies in doing their jobs, and which often specify exactly what information the government requires. Such forms are non-existent regarding the 2257 recordkeeping and inspection process.
"One standard form," Douglas suggested, "would make everybody's life easier."
"We'll take a look at this compliance form," Kaiser responded, "and see what we can do." He also offered to discuss the issue with the DOJ to assist in making the inspection process better.
Another issue Douglas brought up was the fact that the new regulations require adult companies – particular on the Internet side of the business – to keep track of too many dates associated with the explicit material on their sites, and attorney Greg Piccionelli, representing Digital Playground, discussed the fact that the new regulations require that all dates of production be included in the 2257 compliance statement, and put forward the example of a video distributor who could have 10 boxcovers on a single Web page – "Or 100," Douglas interjected – each of which could contain a dozen or more sexually explicit photos shot on a variety of different dates. With the new regulations requiring that the compliance statement appear on every page containing explicit material, rather than simply providing a link to the notice on another page, the compliance statement with its hundreds of "dates of production" could easily crowd out all the other material on the page. Douglas pleaded with the government representatives to ask the Justice Department to rectify that problem.
In that same vein, Cambria asked Joyner and Lawrence whether they felt that the system of hyperlinking to the compliance system had been effective so far, and Joyner stated that it had – and added that the attorneys were in fact bringing up issues which the FBI itself had already communicated to the DOJ through Erin Zucker's report.
However, when Cambria asked if the bureau would consider making Ms. Zucker's report available to the industry, Kaiser replied that that wasn't an option, but that he would be meeting with the DOJ's criminal division attorney.
"It's not the FBI that has the final say on this," Kaiser reminded, referring to the DOJ-created regulations.
After Joyner told the group that websites would be "the next wave" of inspections, Cambria was prompted to ask what the bureau's definition of a "Web page" was, saying that the term needed clarification in the regulations.
"You have to employ a definition [of a page] when you're in the field," Cambria noted, and asked the agents to talk to the DOJ about the issue.
Kaiser, who had replaced Chip Burrus as the assistant director in charge of dealing with the industry, informed the group that although he was an accountant and not a lawyer, he would ask the Justice Department to "tighten that up" ... but that it was the DOJ that makes that decision.
Douglas then brought up another issue of great concern to the industry.
"The best suggestion we have made," he said, "is the notion of third-party recordkeeping."
Primary producers, Douglas detailed, could send their performers' identification documents to some "central repository" – a company that could even be licensed by the Justice Department – and that company could allow secondary producers access to the records on as as-needed basis – a system, he said, that would make it easier for the FBI to ascertain the performers' ages, easier to cross-reference the actors' appearances in different adult features, plus it would make it easier to protect the performers against identity theft.
In that regard, Douglas recalled a situation that arose shortly after the 2005 revision of the regulations had been issued, where a person claimed in an Internet post that he had stolen copies of all the 2257 records from one company and was offering them for sale, even going so far as to post one performer's photo ID as proof that he had the information. Douglas also told of one actress in the late '90s who was surprised to find that she had bought an SUV – except she hadn't; it had been purchased by someone who had stolen her identity from a company's 2257 records. Douglas termed identity theft “inevitable" under the current system.
Piccionelli added that although the new regulations allowed producers to redact the home addresses and phone numbers of the performers before providing the identity documents to third parties, dates of birth and driver's license numbers would still be visible, and that information, together with the performer's real name, would be all that is necessary to steal the person's identity. Such records, he warned, could go out to tens of thousands of companies under the current system – to which Douglas added that it would even be possible for an unscrupulous individual to pretend to start up an adult website, ask primary producers to provide content "on spec" – and then request the 2257 records for that material, and use those records to steal the performers' identities.
Kaiser responded that it would be the industry's responsibility to make sure that whatever third-party recordkeeper was selected would be able to maintain the records' security, and noted that the FBI had had ample experience in attempting to thwart extortion demands such as the one Douglas had detailed.
To this point, there had been good dialog between the FBI representatives and the industry attorneys – so good that some of the industry executives present decided to join in the conversation.
Julie Russell, Wicked Pictures' chief compliance officer, asked whether, with the addition of the Internet companies to the FBI's database, its method of selecting which companies to inspect – so far accomplished by a computer's random selections from the full list – would change? Joyner assured her it would not.
Russell was also concerned about what records her company would be required to keep on features which Wicked didn't produce in-house, but which it had agreed to market, or had bought outright, from third parties? Joyner responded that his guideline as to where to find production records is based on the compliance statement, and would look for the records from whatever records custodian is noted therein. He reiterated that his overriding concern is always who has the best records for the material.
Russell also stated that her company frequently substitutes the latest version of a performer's identification document for older versions in its records, and wondered if that process violated the 2257 regulations. Joyner said that any version of the performer's ID is acceptable.
That interchange led Chris Haberski of KeepSafe to ask whether it mattered if the copy of the performer's ID was in black-and-white rather than color? Joyner said that it didn't matter.
LFP's records custodian Sean Berrios asked if, in obtaining identity documents from foreign performers, it was also necessary for him to verify those performers' tax status or other official information. Joyner assured that the FBI was only interested in verifying a performer's identity for 2257 purposes.
Berrios' question seemed to stimulate Piccionelli to ask about compliance statements for live webcasts, and how the FBI would go about inspecting the records of such performances? Douglas noted that 2257 recordkeeping is limited to "recorded material," but questioned how webmasters whose sites aggregate a number of live performers' webcasts could go about collecting identification data on those performers, some of which don't even live in the U.S.?
"You bring up a good point," responded Kaiser, who said he would raise the issue with Justice Department attorneys.
Lawrence Iyoho, Jr., director of operations for The Score Group, asked about something which had been raised in Free Speech Coalition's comments on the new regulations; that is, how the FBI was dealing with the requirement that before new regulations could be issued, they had to be vetted under guidelines set down in 1980 regarding the regulation of small businesses? Kaiser said that the bureau hadn't considered the issue, since they don't make the law, they just enforce it.
Some of the industry attendees were content simply to soak in the information without making any comments. These included Gayle Ertz, controller and vice-president of finance for Vivid, and Larry Schwarz of Red Light District.
However, even the reporters got to ask a question or two. Xbiz's Tom Hymes wanted to know how Joyner had determined that some of the companies that had failed their 2257 inspections were "willful violators"? Joyner said that it was the combination of the fact that they had produced sexually explicit material but had failed to affix a compliance statement to their product.
Later, this reporter asked whether the Justice Department would consider having a meeting with industry representatives similar to the one taking place with the FBI? Kaiser responded that he didn't know if they would, but that he would supply the identity of the person at DOJ who could answer the question.
After about 90 minutes, everyone seemed to run out of questions or comments, though Piccionelli inquired whether cross-referencing of the performers' stage names, nicknames, maiden names, etc. was still being looked at in the inspection process? Joyner assured him that it was.
"It's a very important part," he said.
Douglas then asked whether in fact it was missing or improper cross-referencing that had accounted for most of the 2257 violations that Joyner and his team had found, and Joyner agreed that it was.
With that, the meeting was adjourned ... but once outside FBI headquarters, the attorneys were only too willing to give their assessments of how the summit went.
All agreed that the meeting had gone very well, and Piccionelli found it particularly interesting that "their views regarding a lot of the difficulties of the proposed regulations that we have observed, they themselves have observed." He was gratified that the concerns he had expressed at last year's meeting regarding the possibility of the identification documents being used for identity theft had been heard, and that the new proposals had taken a step toward safeguarding performers' personal information.
"That indicates that not only are these meetings effective in terms of keeping the paranoia level down and creating a certain amount of trust in the fact that these people are doing what they say they're doing," Piccionelli observed, "but it looks like that there are actual, palpable changes in the regulations that have resulted from these candid discussions, and that is extraordinary."
Cambria agreed that the identity privacy issue was an important one, and was similarly upbeat about the meeting.
"To me, if they communicate to the DOJ their experiences in inspecting, that's very valuable to us, and if we have to litigate, it'll be valuable for litigation," Cambria said, "because it demonstrates that a number of the regulations that are in place or the practices that are in place are sufficient and adequate and we don't need to further overburden the adult publishers with more complicated, cumbersome and costly regulations. So if they can transmit that information to the DOJ, somewhere down the line, it may become valuable to us, and to me, that's the most important part of this continuing dialog."
Douglas, however, noted that this meeting had not been as informative as the previous one, in part because there was less information that the FBI had to provide that hadn't already been covered.
"It's pleasant how receptive they were to the comments by all of the lawyers as to issues that were created by the existing and proposed regs – issues for their ability to conduct their inspections as well as unnecessary burdens for the industry," Douglas noted, "and they represented that they would analyze and review what they considered to be legitimate concerns to the DOJ, and we hope that will be helpful."
Douglas said that the attorneys would be forwarding to the FBI the industry's 2257 comments that contained the specific issues discussed in the meeting, and he found it "very encouraging" that the bureau had said that it would consider those comments seriously.
Agent Joyner had said during the meeting that he expected that there would be another summit in two or three months, which would likely be after the Justice Department had reviewed both the FBI's and the industry's comments on the new regulations and published a final revised version of them.