III. Organized Crime Involvement in Pornography

Part: 
Four
Chapter: 
4

The 1970 President's Commission on Obscenity and Pornography was unable to draw conclusions regarding the role of organized crime in the distribution of obscene and pornographic materials. The 1970 Commission on Obscenity and Pornography found:

Although many persons have alleged that organized crime works hand-in-glove with the distributors of adult materials, there is at present no concrete evidence to support these statements.

The hypothesis that organized criminal elements either control or are "moving in" on the distribution of sexually oriented materials will doubtless continue to be speculated upon. The panel finds that there is insufficient evidence at present to warrant any conclusion in this regard.[1132]

There is some question about how the earlier Commission reached this conclusion.[1133] It is clear that the role of traditional organized crime in the pornography trade has increased substantially since the 1970 report was issued. Until 1970, only one LCN family, the Columbo organization, was known to have been involved significantly in the pornography business.[1134]

The Attorney General's Commission on Pornography has received reports from law enforcement officials, prosecutors, and legislators, describing the substantial role which organized crime, both in traditional (LCN) and non-traditional forms, plays in the pornography business in the United States today.[1135]

In addition to attorneys, many other professional persons assist organized crime families and their associates in the pornography business. Realtors handle land transactions knowing the ultimate purpose of the transaction is to facilitate the sale of obscene material.[1136] Landlords rent property to organized crime families knowing they will be used to warehouse obscene material or to sell, produce, distribute, or display obscene merchandise.[1137] Bankers process accounts and provide all manner of banking services (including the failure to report currency transactions as required by Title 31 United States Code). Printers and film processors develop the visual images taken by pornographers and turn them into finished products for sale or reproduction. Transportation companies and interstate carriers show no discretion in shipping obscene materials to increase organized crime family profits. Academics are paid to act as experts on behalf of organized crime members and associates who are brought to trial and challenged in public debates. Public figures including prosecutors, judges, city, county and state officials, zoning board members, and health department officials may be subjected to monetary and political influence. These people sometimes may ignore the organized criminal activity or impose minimal sanctions when punishment is unavoidable.

Following are highlights of reports provided to this Commission relating to traditional organized crime involvement in and control of the pornography industry.

One report came from a group of law enforcement officers, coordinated through the Investigative Services Division of the Washington, D.C., Metropolitan Police Department, which undertook a study in 1978 to determine the extent of organized crime involvement in the pornography industry.[1138] One reason for the study was, "(knowledge) that organized crime generally involves itself in situations where the gain far outreaches the risk. The pornography industry fits this description."[1139] "An initial probe determined that law enforcement could document Organized Crime control in certain geographic areas. However, it did not appear in 1977 that any single law enforcement body was in possession of documentation reflecting the situation on a national level".[1140] (emphasis added)

The project participants determined that traditional organized crime was substantially involved in and did essentially control much of the major pornography distribution in the United States during the years 1977 and 1978. The group further concluded that the combination of the large amounts of money involved, the incredibly low priority obscenity enforcement had within police departments and prosecutors' offices in an area where manpower intensive investigations were essential for success, and the imposition of minimal fines and no jail time upon random convictions resulted in a low risk and high profit endeavor for organized crime figures who became involved in pornography.[1141] During its seventy-eight year history, the Federal Bureau of Investigation (FBI) has been engaged periodically in investigation of persons and organizations who violate the federal obscenity laws. Though the FBI has not recently been involved in many large scale obscenity related investigations,[1142] Federal Bureau of Investigation director, William H. Webster, along with present and former special agents of the FBI have provided current information about the pornography industry.[1143] In the late 1970's the FBI prepared a report detailing the extent of organized crime involvement in pornography. In preparing that report, the Bureau conducted a survey of the fifty-nine FBI field offices.[1144] Based on the survey and other sources, FBI intelligence analysts concluded:

Information obtained (during the course of the enclosed survey) points out the vast control of the multi-million dollar pornography business in the United States by a few individuals with direct connections with what is commonly known as the organized crime establishment in the United States, specifically, La Cosa Nostra.. . . Information received from sources of this Bureau indicates that pornography is (a major) income maker for La Cosa Nostra in the United States behind gambling and narcotics. Although La Cosa Nostra does not physically oversee the day-to-day workings of the majority of pornography business in the United States, it is apparent they have "agreements" with those involved in the pornography business in allowing these people to operate independently by paying off members of organized crime for the privilege of being allowed to operate in certain geographical areas.[1145]

In 1985, at the request of the Attorney General's Commission on Pornography, Director Webster conducted a brief survey of the fiftynine FBI field offices concerning their knowledge of involvement of traditional organized crime in pornography. Director Webster advised this Commission, "About three quarters of those offices indicated that they have no verifiable information that organized crime was involved either directly or through extortion in the manufacturing or distribution of pornography. Several offices, did, however, report some involvement by members and associates of organized crime."[1146]

The FBI reported that on April 30, 1981, Joseph Palladino, a known dealer in pornography in Boston and Worcester, Massachusetts, met with Gennaro J. Anginlo in Boston.[1147] Anginlo is the underboss of the New England Organized Crime Family.[1148] Palladino complained that one Carlo Mastrototaro was opening an adult bookstore in the Worcester area to compete with the one jointly owned by Palladino and Mastrototaro. Palladino could not understand why the New York family had authorized Carlo to operate a competing pornography business. Prior to this, Palladino said he had considered Robert DiBernardo of the New York family to be his "compadre". In response, Anginlo  became angry because Palladino had first sought an explanation from DeBernado. Anginlo  said this prevented him from contacting DeBernado's boss in New York and he would now have to deal with Sam  Curfari, capo of the Genovese family in Massachusetts.[1149]

One former FBI agent told the Commission:

In my opinion, based upon twenty-three years of experience in pornography and obscenity investigations and study, it is practically impossible to be in the retail end of the pornography industry (today) without dealing in some fashion with organized crime either the mafia or some other facet of non-mafia never-the-less highly organized crime.[1150]

The Chicago Police Department has been involved in the investigation of organized crime families who are engaged in the distribution of pornography in the Midwest.[1151] Thomas Bohling of the Chicago Police Department Organized Crime Division, Vice Control Section reported, "...... it is the belief of state, federal, and local law enforcement that the pornography industry is controlled by organized crime families. If they do not own the business outright, they most certainly extract street tax from independent smut peddlers."[1152]

An overwhelming majority of obscene and pornographic materials are produced in the Los Angeles, California, area.[1153] Organized crime families from Chicago, New York, New Jersey, and Florida are openly controlling and directing the major pornography operations in Los Angeles.[1154] According to Chief Daryl F. Gates of the Los Angeles Police Department, "Organized crime infiltrated the pornography industry in Los Angeles in 1969 due to its lucrative financial benefits. By 1975, organized crime controlled eighty percent of the industry and it is estimated that this figure is between eighty-five to ninety percent today."[1155]

An investigative report submitted to the California Legislature by the Attorney General of California discussed organized crime infiltration into the pornography industry:

In the early 1970's... four organized crime groups moved in on pornography operations in California. They met relatively little resistance because the weak-structured organized crime group of Southern California lacked the necessary strength to deter the infiltration of organized crime from the East.

Organized crime figures first focused on production and retail operations in California. In this effort, they used the influence of their established national distribution network and effectively resorted to illegal and unfair business tactics. The newly arrived organized crime groups formed film duplication companies which illegally duplicated the films of independent producers and displayed them at nationwide organized crime controlled theaters. Faced with continued piracy and loss of profits, many legitimate producers were forced to deal with organized crime controlled distribution companies and film processing labs.

After gaining control or ownership of many California wholesale and retail companies, organized crime forced other independent retailers out of business through price manipulation. Wholesale prices to independent retailers were raised while prices to organized crime controlled outlets were lowered. Independents were undersold by organized crime controlled outlets until lost profits forced them out of business. Many competitors were bought out which allowed the subsequent raising of prices in other parts of the market. Some dealers that openly opposed this takeover were silenced by means of extortion and arson.[1156]

In 1984, California Attorney General John Van De Kamp reported that the arrival of home video cassette recorders on the market in 1979 was accompanied by a growing demand for adult video tapes.[1157] California pornographers, linked to the Gambino, DeCavalcante, Luchese and Columbo organized crime families entered this market through companies that produce, duplicate, distribute and sell adult video tapes.[1158]

Law enforcement agents have described the control of organized crime families in the pornography industry. Organized crime figures and associates are involved in the commerce essential to the pornography business through ownership of the distribution sources of the material. The 1970 Commission on Obscenity and Pornography reported ". . . crime syndicate members reported in interviews that it was not worthwhile for the syndicate to enter the business, primarily because there was no real economic inducement.[1159] In 1986, there are tremendous profits in the pornography industry. These profits are of the type that can be easily hidden from the Internal Revenue Service, because of the cash transactions and the policy of no cash receipts for merchandise.[1160]

Law enforcement officials have described large profit margins in the pornography business today.[1161] Magazines which cost fifty cents to produce wholesale for five dollars and the retail price is ten dollars or more.[1162] A fifty minute eight millimeter film wholesales for three dollars and retails for twenty dollars.[1163] Video cassette tapes which wholesale for fifteen dollars often retail for eighty to ninety-five dollars.[1164]

The well-known pornographic film "Deep Throat" was produced by the Periano brothers of the Columbo organized crime family for $25,000 and is reliably estimated to have grossed fifty million dollars as of 1982.[1165] The film was ". . . the biggest money maker of any film to that time and possibly since, in the state of Florida."[1166]

Joseph, Anthony, and Louis Peraino all became millionaires as a result of "Deep Throat."[1167] They used profits from the film to build a vast financial empire in the 1970s that included ownership of garment companies in New York and Miami, investment companies, a sixty-five-foot yacht in the Bahamas, "adults only" pornographic theaters in Los Angeles, and record and music publishing companies on both the east and west coasts.[1168] From 1973 to 1976, their corporate empire included Bryanston Distributors, Inc., a motion picture company that earned twenty million dollars in its first year of operation.[1169] The Perianos  also used profits from "Deep Throat" to finance drug smuggling operations in the Caribbean.[1170]

Aladena Fratianno, a.k.a., Jimmy Fratianno, a male member of a La Cosa Nostra organized crime family and a former Capo and later acting boss of the Los Angeles crime family, told this Commission that large profits have kept organized crime heavily involved in the obscenity industry.[1171]   Fratianno described this involvement to a Commission investigator as follows:

  • Interviewer: Could you describe the nature and type of involvement organized crime would have in the pornography industry when you were active in organized crime?
  • Aladena: Well, it's very, very big.... I'd say, 95 percent of the families are involved in one way or another in pornography.... It's too big. They just won't let it go.

     

  • Interviewer: Okay, does organized crime reap a lot of money from their involvement in pornographic industry?
  • Aladena: Absolutely. Absolutely.[1172]

     

The Attorney General's Commission on Pornography concludes that organized crime in its traditional LCN forms and in other forms exerts substantial influence and control over the obscenity industry. Though a number of significant producers and distributors are not members of LCN families, all major producers and distributors of obscene material are highly organized and carry out illegal activities with a great deal of sophistication.[1173]

This influence and control has increased since the report of the 1970 Commission on Obscenity and Pornography and is particularly evident in the distribution of pornographic materials.[1174] Organized crime elements have found that the large financial gains to be reaped from pornography far outweigh the risks associated with the trade.

Notes

  1. The Report of the Commission on Obscenity and Pornography, (1970), pp. 141-43.
  2. New York Hearing, Vol. I, Homer Young, p. 10; Former Federal Bureau of Investigation Obscenity Specialist Young reported that a staff member of the 1970 Commission interviewed him for approximately four hours about the role of organized crime in pornography in the 1968/1969 era. Young advised that he furnished the individual with documentation of organized crime involvement which for some unknown reason was not included in the earlier Commission's final report.
  3. New York Hearing, Vol. I, William Kelly, p. 69.
  4. See, Appendix One, infra.
  5. New York Hearing, Vol. I, James D. Harmon, p. 14A-5.
  6. "The building in which Star (Distributors, Inc) rent space is managed and partly owned by John Zaccario ... a fact first revealed in a New York City Tribune Copy story ..." Selle, Pornography Warehouse Target of Irate Protestors, N.Y. City Trib., Oct 29, 1984
  7. Organized Crime's Involvement in the Pornography Industry, Investigative Services Division, Metropolitan Police Dept., Washington, D.C. (1978).
  8. New York Hearing, Vol. I, Carl Shoffler, p. 214.
  9. Id., p. 215.
  10. Id.
  11. See, Washington, D.C., Hearing, Vol II, William H. Webster, pp. 77-81. 1143. Id. at 75; New York Hearing, Vol I, Homer E. Young, p. 16.
  12. Washington, D.C., Hearing, Vol. II, William H. Webster, p. 81.
  13. Federal Bureau of Investigation Report Regarding the Extent of Organized Crime Development in Pornography, (1978), p. 6.
  14. Letter, William H. Webster, Director, Federal Bureau of Investigation to Henry E. Hudson, chairman, Attorney General's Commission on Pornography, Nov. 15, 1985.
  15. Letter to the Attorney General's Commission on Pornography from the Federal Bureau of Investigation, March 24, 1986.
  16. Id.
  17. Id.
  18. New York Hearing, Vol. I, William P. Kelly, p. 86.
  19. New York Hearing, Vol. I, Thomas Bohling, p. 178.
  20. Id., p. 189.
  21. See, Los Angeles Hearing, Vol. I, James Docherty, p. 6.
  22. Los Angeles Hearing, Vol. I, Robert Peters, p. 32. Detective Peters estimates that eighty to ninety percent of the pornography in the United States is produced in the Los Angeles area. See also, The discussion of production and distribution of sexually explicit materials.
  23. Los Angeles Hearing, Vol. I, Robert Peters, p. 32.
  24. Investigative Report on Organized Crime and Pornography Submitted to the Attorney General of California, 2-3.
  25. State of California, Department of Justice, Organized Crime in California, (1984), p. 6.
  26. Id., p. 5.
  27. Investigative Report on Organized Crime and Pornography Submitted to the Attorney General of California 5.
  28. New York Hearing, Vol. II, William Johnson, p. 82A; See, the discussion of the production and distribution of sexually explicit materials for a detailed explanation of the profitability of the industry.
  29. See, Los Angeles Hearing, Vol. I, James Docherty, p. 6.
  30. New York Hearing, Vol. II, William Johnson, p. 73.
  31. Id., p. 82A-5.
  32. Id.
  33. New York Hearing, Vol. I, William Kelly, p. 108A-3.
  34. Id.
  35. Id., p. 108A-4.
  36. Cong. Rec., S433 (daily ed. Jan. 30, 1984). (statement of Senator Jesse Helms).
  37. Id.
  38. New York Hearing, Vol. II, Christopher J. Mega, p. 160.
  39. New York Hearing, Vol. I, Interview with James  Fratianni  by Senior Investigator Edward Chapman, Attorney General's Commission on Pornography, p. 112.
  40. New York Hearing, Vol. I, Interview with Jimmy Fratianni, by Senior Investigator Edward H. Chapman, Attorney General's Commission on Pornography, pp. 115-16.
  41. See, Investigative, Report on Organized Crime and Pornography Submitted to the Attorney General of California; State of California, Department of Justice, Organized Crime in California (1984).
  42. See, The discussion of the production and distribution of sexually explicit materials for further information.