As FBI agents were wrapping up what proved to be a successful inspection at the Diabolic offices, Free Speech Coalition Communications Director Tom Hymes confirmed to the adult entertainment industry that the long-awaited federal record-keeping inspections — ostensibly designed to ensure that no minors are involved in making adult films — had begun.
Hymes said companies that are primary and secondary producers should expect inspections but cautioned that FSC members who are secondary producers need only subject their primary producer records to inspection because of the injunction in the Colorado 2257 litigation — Free Speech Coalition vs. Alberto Gonzales.
In the days following the Diabolic inspection, FBI agents visited Bethlehem, Pa.-based Sebastian Sloane Productions on July 28; Chatsworth, Calif.-based Robert Hill Releasing on Aug. 1; and Van Nuys, Calif.-based Sunshine Films on Aug. 16.
While each company was subjected to 2257 inspections, only gay content producer JJ Ruch, who owns Sebastian Sloane, was served with a search warrant.
Ruch told XBIZ that the warrant directed authorities to search for evidence of depictions of minors engaged in sexually explicit acts.
According to Douglas, who did not review the document personally, the warrant contained both directions to search for evidence of child pornography as well as a component instructing the agents to inspect Ruch's 2257 records.
Less than three weeks after the initial inspection, FBI assistant director of criminal investigations Chip Burrus held a press conference where he told reporters that the 2257 record-keeping inspections were "off to a good start."
"[Pornographers] expected guns and battering rams, and we came in with suits and pencils," Burrus said.
While FBI agents were busy conducting their inspections, President Bush signed the Adam Walsh Child Protection and Safety Act of 2006, potentially altering the 2257 landscape.
The bill targets pedophiles and child molesters by creating a national sex offender database. However, a relatively small amount of language contained in the bill amends 2257 by bringing secondary producers within the scope of the record-keeping law, Douglas said.
"I don't think there's anyone in the world who believes that the timing of the inspections and the passage of the bill is a coincidence," he said.
According to Douglas, the launch of the inspections will help government prosecutors on several fronts in the ongoing 2257 Colorado litigation, which in turn may evolve based on changes made to 2257 under the Adam Walsh law.
"By actually conducting inspections, prosecutors can now argue that there is a vital government interest," Douglas said. "Before they couldn't really say that the inspections were vital because the FBI simply hadn't done any since 1988."
Douglas also said that with actual inspections now under way, prosecutors could rebut the FSC's argument that inspections create an undue burden on the industry because before they simply had to accept a description of a hypothetical inspection. According to Douglas, actual inspections allow the government to say, "See, it's not such a burden."
"It's an argument that helps them, but it doesn't help them enough," Douglas said. "Diabolic is a great example. By all reports they passed with flying colors, but 20 percent of their workforce is dedicated to 2257 record-keeping full-time. That's a huge burden."
While there have been no reports of failed inspections, it is hard to say whether a company has passed, Douglas said.
"The regulations say that if a company has errors in its records, the agents are supposed to send them a letter," Douglas said. "That's very vague; we don't know when the company is even supposed to get the letter. But there's no provision yet for a letter saying the company passed."
Chris Haberski, the owner of KeepSafe, which computerized all of Diabolic's 2257 records, told XBIZ that his client was fully compliant.
"I think the agents were surprised at how smoothly the process went," Haberski said.
"The last thing the agent said to me before he left was, 'In my report to the Attorney General's office and the Department of Justice, I will put in there that Diabolic was 100 percent compliant on this investigation today.'"
While Haberski reported that the Diabolic inspection centered on a list of performers who had appeared in 23 Diabolic titles, Douglas said that he believes there's a broader strategy being employed by the government.
"Reading the tea leaves, I think that the government is looking for most of the companies inspected to pass with flying colors," Douglas said. "I think they'll want to find a handful that are a mess. Those mixed results would allow them to say, 'Compliance isn't so hard, if you take it seriously.'"
In the meantime, inspections have left at least one pornographer shaken. Ruch, who worried that "one screw-up could lead to five years in jail," said that he had considered quitting the adult entertainment business but has not made concrete plans to do so at this time, adding that a UPI report of his intention to quit was a little premature.