Jeffrey Douglas: Less Than 50 Percent of Adult Companies are 2257 Compliant

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AVN’s Mark Kernes takes a very interesting look at the 2257 regulations and the state of complacency the adult industry seems to have enveloped itself in since the Feds stopped making unscheduled audits of companies.

According to the article, major production companies either have in-house recordkeepers, or farm out the work to the handful of third party recordkeeper businesses at a cost of $150 a title.

Another records keeping option is the investment in a software package offered by the FSC for $3,000 which automates the filing of the required documents on a company’s own computer.

But the last two options, says the article, aren’t cost-effective for the myriad webcam girls and other online content providers; and all three options are problematic for large online DVD distributors and retailers, who need 2257 records for every single one of the tens of thousands of DVD sleeves they post on their sites so consumers have some idea what they’re buying.

In any event, 2257 compliance is oppressive and burdensome, according to
attorney J. Michael Murray.

Penalties for non-compliance or even incomplete or erroneous compliance are severe — five years in prison for each offense. And those sentences could be handed out for bureaucratic or filing mishaps.

Yet even with due diligence, companies are bound to screw up. FBI Special Agent Charles Joyner, the person in charge of the FBI’s now-disbanded 2257 inspection team, told AVN back in the summer of 2007, that compliance was very poor among the 19 inspections held by the team. Sixteen companies flunked while three passed.

“Our assumption was they would be in complete compliance, and I was surprised to see that very few are. Most of them are out of compliance. That was a surprise,” said Joyner.

Attorney Jeffrey Douglas, who frequently deals with 2257 compliance issues, figures that substantially less than 50 percent of companies are compliant and that 15 to 20 percent are.

As you might suspect, the article turns into an FSC pitch for funds because the FSC apparently owes it lawyers a ton of money [$300,000] for waging fight against the records keeping provision.

“[Diane] Duke is asking that producers step up and use some of their profits to save themselves thousands of dollars in the long run—and keep themselves out of prison.

“What we’re asking smaller producers is, ‘Consider giving FSC an additional $500 a year—less than a cup of coffee a day!—targeted directly to 2257,’” Duke explained.

“The mid-sized producers, see if they can do a couple thousand. Larger producers, $20,000. Those are the levels we’re going to be asking for. In the long run, that will pay off.

“Hey, it’s got to be cheaper than paying your attorney anywhere from $250 to $1,000 per hour to keep you out of prison for your “paperwork violation”!

While Duke mentions that FSC’s entire budget is less than $500,000 annually for rents and salaries, she fails to mention that $150,000 of that goes to her.

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