"In contrast to previous economic eras,
intellectual property will be the primary source
of new wealth in the 21st century."
- Gregory A Piccionelli, 1989
 
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The Return of the Republicans

DECEMBER 2010

It would be fair to say that the adult entertainment industry collectively breathed a sigh of relief at the election of Barack Obama. Many in the industry hoped that the new administration would be much less hostile toward adult entertainment content than the previous one. Fortunately, it appears that by and large those hopes have been realized, so far at least. Indeed, to date, the Obama Administration has not shown any interest in making the prosecution of mainstream adult content one of its priorities.

 

But this is not to say that the current administration is a friend to the industry by any means. Obama’s Department of Justice (“DOJ”) has continued every wrong-headed federal obscenity prosecution commenced under President Bush, including the federal government’s ill-fated prosecution of John Stagliano. Obama’s DOJ also fought hard, and lost, trying to prevent our establishment of a national community standard requirement for obscenity cases involving Internet content distribution in the case of U.S. v. Kilbride. And, of course, Obama’s DOJ continues to fight hard to save the onerous federal record-keeping and labeling laws known as the “2257 regulations” from constitutional invalidation, most recently, succeeding in getting the Free Speech Coalition’s court challenge to the 2257 regulations dismissed.

 

But even if it is clear that the current administration is not a friend of the adult entertainment industry, it is also clear that it hasn’t been, and is not likely to become, its enemy either. That will not likely be the case, however if the republicans win back the White House in 2012, which is a very real possibility if the economy does not dramatically improve by then. It is because of this increasingly likely possibility that I believe operators of adult entertainment businesses should prudently start to prepare for the return of the republicans. Here’s why.

 

The 2010 Midterm Elections

 

The 2010 Midterm elections were simply disastrous for the Democratic Party. The party lost control of the House of Representatives and lost several seats in the U.S. Senate. But what made this last election particularly significant as an indicator of the political direction that the country is headed was not so much that the democrats lost seats in the House and Senate. It is usually the case that the party in power loses congressional seats in midterm elections. What was surprising, and what likely spells big trouble for Obama’s reelection is the magnitude and widespread character of democratic defeat. The democrats lost big at every level and in every region in the country in what many political analysts say was a clear repudiation of Obama’s policies and governance.

 

Many political commentators also say the democrats’ big losses are directly related to the ailing economy and voter dissatisfaction with the Obama Administration’s attempt to revive it. But if that is the case, Obama’s reelection could, and probably will, hinge on the state of the economy in 2012. And with unemployment currently at about 10% and many economists predicting a long weak recovery over many years, there is a very good chance that the economy might not heal sufficiently by the next election to prevent additional republican gains in the House and Senate, and a reelection defeat for President Obama.

 

While I have not confirmed the factoid, one political analyst told me that no sitting president has ever been reelected with unemployment above 7.5%. If that is true, and if the prevailing view of economists that our economy is likely to mend only very slowly is also true, then it is unlikely that unemployment will be less than 7.5% prior to the 2012 elections and likely that we will have a republican president in 2013.

 

The Next Republican President

 

So if Obama loses in 2012, what can the industry expect under the next republican president? The answer, of course, depends on which republican becomes president. A cultural conservative republican such as Mitt Romney, Mike Huckabee or Sarah Palin (heaven help us), could be expected to unleash the DOJ upon the adult entertainment business with great fanfare and furry. It is not out of the question that one of these candidates might actually try to put the porn genie back in the bottle by initiating widespread prosecutions of adult entertainment businesses emulating the tactics used during the administrations of Ronald Reagan and the first George Bush (41).

 

On the other hand, a more centrist and intellectual candidate like Newt Gingrich might only pay lip service to the cultural conservative wing of the republican party and initiate only token prosecutions for violation of the obscenity laws and the 2257 regulations. This would be similar to what occurred under the second George Bush (43).

 

But if a republican is elected president in 2012, regardless of which particular republican candidate wins, it is almost a certainty that adult entertainment business operators will be facing greater federal scrutiny and a substantially greater risk of prosecution than they do today. Historically, since the days of the Nixon administration, republican administrations have consistently been more aggressive against adult entertainment businesses than their democratic counterparts. And given the wave of cultural conservatism sweeping the country, I see little reason to think that pattern will not be rewoven when a republican next occupies the White House.

 

Prudent Preparation.

 

So what should an adult entertainment company do to confront the possibility of a republican administration in a little less than 2 years? Two words: prudently prepare.

 

Advising clients about the realistic possibility that the industry may once again find itself under assault from the federal government after a much shorter than hoped- for respite, I am sometimes reminded of the story of ‘The Three Little Pigs”.

 

Some clients, especially those who are new to the business and have no personal memory of previous periods of governmental hostility toward the adult entertainment industry, often do not see the need to expend scarce resources on legal safety measures at a time when there appears to be no apparent new prosecutorial activity by the federal government against adult entertainment businesses. While I understand this viewpoint, it is seems to me to be similar to the views of the two little pigs that respectively built their homes of straw and sticks and likely to produce similar results if the big bad wolf comes a-callin’. Only in this case, if the federal government comes a-callin’ with a criminal indictment, operating in a house of straws or sticks could mean years or even decades in prison, and the total loss of an adult entertainment company’s business and all the assets generated from that business.

 

Indeed, it is foolhardy, in my opinion, to mistake the current administration’s laissez faire attitude toward the adult industry to mean that a company’s current potentially unlawful operations are beyond prosecution. Criminal laws like the obscenity laws and the 2257 regulations have long statutes of limitation, usually 5 years or more. This means that criminal acts engaged in today could be prosecuted well into the next presidential term. This should be of some concern to many adult entertainment companies, particularly those who are distributing content via the Internet in a manner that is arguably not compliant with the 2257 regulations and other laws. This is because the federal government is reportedly archiving the entire public web. If this is true, and I suspect it is, it means that the government has already acquired mountains of evidence that could be used against non-compliant adult companies, with more evidence being gathered every day.

 

The prudent path is, of course, to comply with the laws so that any archiving of a company’s website will only show lawful activity. But, of course, this also means that a company must take steps to be in strict compliance with the law even during periods, like the current one, where the federal government is not aggressively prosecuting the porn industry, even if it costs some money to do so. In other words, “build a brick house”. So, if you haven’t already done so, it is strongly advised that you contact a reputable adult entertainment attorney to evaluate the status of your company’s compliance with the 2257 regulations and other laws applicable to your business.

 

A Final Thought

 

From the perspective of federal prosecutions, the adult entertainment industry has been very lucky during the last three presidential administrations regarding the nonuse of what I have called the government’s “porn prosecution weapon of mass destruction”, the 2257 regulations. Literally thousands of adult businesses have been, and continue to be, out of compliance with the many and complex requirements of the 2257 regulations. And violation of any one of the 2257 regulations, no matter how seemingly trivial such violation may be, is, according to the government, a fully prosecutable offense.

 

Yet, to date, there has been very little use of this most-powerful of weapons in the federal government’s anti-porn arsenal. Under Clinton there was no enforcement of the 2257 regulations at all. So far under Obama, there has also been no inspections or prosecutions under the 2257 regulations.

 

Under Bush, however, there were both numerous inspections and the first 2257 prosecution. Many, including myself, believe that but for the sidetracking of Bush’s DOJ with 9-11 and subsequent War On Terror duties, the Bush Administration would have been much more aggressive against the industry than it was and many, many adult entertainment companies dodged potentially fatal 2257 prosecution bullets.

 

Therefore, unless and until the 2257 regulations are struck down, I do not think that it is prudent or even reasonable to think that the next republican administration will not use the 2257 regulations robustly against the adult entertainment industry.

 

In the world of presidential politics, the 2012 election is still very far away. A lot can happen that might completely change the political fortunes for Obama over the next 2 years. But as it stands today, his reelection is in serious jeopardy and there’s a reasonably good chance that the industry will have to contend with another republican administration much sooner than hoped.

 

But if you take my advice and prudently prepare by evaluating your company’s compliance status and getting it into compliance if it’s not, you’ll be ensuring that you’ve “built your house out of bricks”. Then, come what may, the likelihood is that the big bad wolf will concentrate on huts of straw and sticks and not even bother with you.

 

This article is not intended to be, nor should be considered to be, legal advice. I strongly urge you to seek the counsel of a qualified and experienced adult entertainment attorney familiar with the legal matters discussed in this article.

 

 

1Gregory A. Piccionelli is an experienced adult entertainment attorney. He can be reached at Piccionelli & Sarno at (818) 201-3955 or greg@piccionellisarno.com.

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