FBI Meets With Adult Companies for 2nd Time

WASHINGTON, D.C. – Agents of the Federal Bureau of Investigation met with members of the adult entertainment industry this afternoon for the second time in a year to discuss the current state of the 2257 inspections.

The meeting was held at FBI headquarters in Washington, and was attended by representatives from several leading adult companies as well as industry attorneys and media.

The purpose of the meeting, which was called by the FBI, was to have “a briefing on the inspection process and a general update on what the inspectors have encountered during the first year of operation.”

FBI agents in attendance were Assistant Director for the Criminal Investigative Division Kenneth Kaiser, who chaired the meeting, Section Chief John Gillies, Special Agent Chuck Joyner, Supervisory Special Agent Stephen Lawrence, Unit Chief for the Crimes Against Children Unit Alan Nanavaty and Assistant General Counsel Richard McNally.

Industry attorneys in attendance were Paul Cambria, Jeffrey Douglas and Gregory Piccionelli. Adult companies represented either by an individual from the company and/or attorneys were LFP, Wicked, Vivid, Diabolic, Digital Playground, Red Light District and the Score Group.

Media reps were Mark Kernes from AVN, and XBIZ. The meeting was on the record, but reporters were not allowed to audio tape the proceedings without prior approval by FBI public relations.

Kaiser opened the meeting with a brief statement in which he repeated the FBI’s oft-stated intention to make the 2257 inspection process as seamless and easy as possible for everyone concerned. He said the companies inspected so far had been very cooperative.

Agent Joyner then made his presentation on the current state of the inspection process. He said 24 companies had thus far been inspected, and that four had passed inspection. Of the remaining 20 companies, 15 had “unintentional” violations, but five had been “willful.” Of those five, two companies had been re-inspected, but had come up “just as bad.”

Joyner added that five inspections are planned for next week, and of the five companies, he knew that three already had willful violations. When asked how he could tell that companies he had not yet inspected were guilty of willful violations, he said that they had sexually explicit content and no labeling of any kind. He added that in his book such an oversight could only be deemed willful. The meeting was then opened up for questions or comments.

Cambria said that he had been in communication with his clients, who were concerned about some of the new provisions in the proposed regulations recently released by the Justice Department.

He asked if the inspecting agents, who now had a significant amount of experience under their belts with respect to the real nature of the regulations and the ability by companies to comply, could communicate some of those difficulties back to the Justice Department, especially now when it is considering the proposed regulations.

Joyner replied that they had in fact already forwarded suggestions to the Justice Department, though he did not specify exactly what had been suggested, and that more meetings between the FBI and Justice Department regarding 2257 were scheduled. He could not promise that anything would come out of those meetings.

Jeffrey Douglas said that he had hoped for better communications between the FBI and Justice Department, a comment that elicited a laugh from everyone. He then made a very tangible suggestion, something he said the FBI could work toward that would be very helpful for the industry; namely, a standardized 2257 compliance form for producers that would save time, money and grief for all involved.

Douglas added, “You could not be doing a better job in the inspection process, and your communication before and after inspections couldn’t be better.”

Kaiser said they would look very closely at creating a standard form, something he said could be very helpful.

Douglas said that another aspect of the regulations they needed to look at was the number of “dates” that needed to be addressed in the records by producers.

“We have counted seven different dates for which records have to be kept,” he said. “It’s madness from the perspective of compliance.” He added that there must be a way to simplify that requirement.

Cambria asked at this point in the meeting whether the FBI had gotten around to adding adult websites to their database of sites to be inspected.

“Yes,” Joyner said, “they have been included in the database.” But he did not say whether any had been chosen yet for inspection.

Cambria said that there was a great deal of confusion about exactly what a webpage is, and that if the agents had to be clear about definitions such as this before they could even think about going out to inspect adult websites, couldn’t they do a better job of communicating those definitions to the industry?

“I agree with you,” Kaiser responded. “We will try to tighten those questions up with the Justice Department. Ultimately, they make the decisions.”

Greg Piccionelli reiterated Douglas’ earlier concern about “dates,” specifically original dates of production and the problems producers will have if they have a number of boxcovers on a website, each with multiple images comprising any number of original dates of production.

“How can all that information possibly be listed on a webpage?” Piccionelli asked. “It will be impossible to comply with.”

“We have only so much influence with the Justice Department,” Kaiser replied.

Cambia asked if Joyner had found that the use of hyperlinks for 2257 notices had been effective in the course of his inspections.

“Yes,” Joyner replied, “and that was mentioned in the FBI report to the Justice Department.”

Douglas then weighed in that the single best suggestion made by the 2257 litigation team, which was rejected, was the issue of third-party record-keeping. He said that there were many potential benefits to adopting such a plan, such as greatly reduced costs to the industry, reduced burden on secondary producers, enhanced security for performers and a much smoother and more effective process for the inspectors.

“This happens often in government,” Cambria added.

“Yes,” Kaiser said, “we use centralized records for a lot of things. It’s a legitimate proposal. I’ll run it by the Justice Department at our next meeting. We’ll come back with an answer. There will be pros and cons to it.”

Piccionelli added that the risk of identity theft with so many thousands of IDs being emailed around the world was too great not to come up with some alternative plan, and that it would be very easy for anyone to request IDs with the intent to steal identities.

Douglas said that a case of 2257 identity theft had in fact already happened, and that the FBI had to be alerted in that case.

“I don’t disagree with you on that point,” Kaiser said. “Identity theft is a very serious problem.” But he added, “It will be up to the industry to ensure that a central repository is safe. Security of data is a fact and a problem that we deal with in many industries.”

“Nevertheless,” Douglas replied, “the difference between vast access and limited access is huge.”

Chris Haberski, who offers a 2257 compliance product called Keepsafe, suggested that performer IDs in a central repository would not have to be given out to thousands of webmasters and affiliates. They could have very limited access to the sensitive information, which could also be made available to law enforcement only when they need it for the purposes of an inspection.

Douglas then asked how the FBI is going to inspect secondary producers in the absence of final regulations.

“I feel comfortable that all companies so far have been primaries,” Joyner replied.

“Proposed regs mean nothing to us,” Kaiser said. “Until they pass, they don’t exist.” The implication here is that until the proposed regulations are finalized, the FBI will continue to focus its inspections on primary producers and not secondary producers.

Piccionelli asked if Internet producers of live content are in the FBI database of adult companies open for inspection.

“They are in the database,” Joyner replied.

XBIZ asked the agents if they knew if the Justice Department had made any decisions about charging any of the companies that had failed 2257 inspections.

“They have not made any final decision regarding any of those companies,” Joyner said.

“We will notify you as a group if there are any substantial changes to the inspection process,” Kaiser added. There is also a 2257 information page on the FBI website, where updated information can be found.

The meeting ended with a promise to maintain a high level of communication between the FBI and the industry, and a promise by the agents to continue to act in good faith.

“We’re from the government,” Kaiser said. “Trust us.”

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