Wages of Vice

Police find a way to make money by busting massage parlors

Cynthia Hammond dropped by the Tenderloin massage parlor where she once worked about three weeks ago, figuring to retrieve an old pair of bluejeans. Business was slow, so Hammond took time to catch up with one of her former co-workers. Another parlor employee was in the back, tending to a customer.

As Hammond and her ex-colleague watched a Cosby Show rerun on television, eight members of the city's vice squad descended on the Geary Street parlor. For two hours, Hammond says, she and the two parlor employees were detained -- refused permission to even go to the bathroom -- as the cops gathered information and poked about. Ultimately, Hammond and the woman she'd been watching TV with were issued citations for being present in a "house of ill repute." The third woman, the one who had been in the back, was charged with soliciting sex from an undercover officer.

Hammond, who says she's getting out of the sex business, would like to keep the arrest off her record so it isn't dogging her while she looks for other work. That shouldn't be a problem, as long as she's willing to fork over a few hundred dollars -- preferably in the form of a cashier's check or money order made out to the Vice Crimes Division of the San Francisco Police Department.

For the past two years, the vice squad has been quietly collecting tens of thousands of dollars in "restitution" from women arrested in massage parlor raids. With the blessing of District Attorney Terence Hallinan's office, charges against the women are then dropped. Technically, the women agree to enter a diversion program rather than go to court. But unlike other diversion programs -- such as those for drunk drivers or petty drug users -- this program doesn't include anything like mandatory counseling, training, or community service.

Instead, the women are simply required to promise they will not stray again. And, it seems, pay several hundred dollars to the vice squad and a nonprofit organization for the favor of having their charges dropped.

Some sort of diversion program probably is the best method for handling massage parlor arrests. Certainly, none of San Francisco's elected officials wants to clog the courts and jails with women arrested for what many feel -- rightly or wrongly -- is a victimless crime.

But the only discernible impact of this program is that the vice squad is making money by busting massage parlors. And until SF Weekly began asking questions about it, police officials seemed content to keep quiet about their newfound font of cash.

This year alone, police have referred at least 416 cases springing from massage parlor arrests to the DA's Office for prosecution. Most of those arrested -- about three out of four -- were not caught actually soliciting or engaging in sex acts. Instead, like Hammond, they were cited for merely being present at a massage parlor.

In order to escape the criminal charges, the vast majority of those arrested have agreed to enter the diversion program and pay the vice squad amounts ranging from $100 to $350. The fines presumably are intended to reimburse the Police Department for the overtime its vice officers clock while conducting their investigations.

But in response to repeated requests over the past two months, San Francisco police officials refused to answer SF Weekly's queries about how much money they have collected, or provide an accounting of what is done with the funds.

And until asked by SF Weekly, the city Treasurer's Office, the city's Controller, and the City Attorney's Office said they were not aware of the Police Department's practice. City Treasurer Susan Leal says she didn't have any idea the Police Department is accepting cashier's checks made out directly to the vice squad, and will now look into how the money is being handled.

Harold Guetersloh of the city Controller's Office was also taken by surprise when told of the process, and says he is now asking the police to explain their procedures.

Police officials, and a spokesman for Hallinan's office, defend the practice, saying it is a perfectly legal tactic designed to encourage massage industry workers to pursue another line of work. "Our ultimate goal would be to put the houses out of business," says DA spokesman John Shanley. "Hopefully, by nickel-and-diming the women, we can do that."

But some of those who have been arrested, and several lawyers who handle their cases, say the practice is little more than a legal shakedown. Massage parlor workers, they say, are being arrested on dubious charges and then allowed to buy their way out of trouble. Many of those women return to work to cover the fines. It is a cycle that accomplishes little more than feeding the vice squad's secret kitty.

"It's official extortion," says Katya Komisaryk, an attorney who represents many of the arrested women. "Sex workers are paying to have their cases dropped."

The practice seems to have had little impact so far on the massage industry. The number of licensed massage parlors in San Francisco has actually increased during each of the past two years.

But more troubling is the financial incentive that has been created for vice officers to arrest as many people as they can -- even women caught watching a Cosby rerun in the wrong place -- and the Police Department's stubborn refusal to explain what is happening to the money it collects.

Clamping down on the city's massage parlors has become politically fashionable of late. With housing tight and builders scouring San Francisco for new sites, city officials say they are receiving a steady stream of complaints from neighbors and developers concerned about threats to their property values.

In the past six months, police have stepped up their arrests of massage parlor workers, according to vice squad Officer Bob Davis. The Board of Supervisors recently extended a moratorium preventing any new parlors from opening in the Tenderloin and the Mission. District Attorney Terence Hallinan has taken to boasting about his efforts to crack down on the trade.

The official vigilance is a tad hypocritical, since the city licenses massage parlors in the first place, making it one of the few segments of the sex trades subject to some form of city regulation.

Unlike streetwalkers, massage parlors and their employees pay the city for permission to work, about $137,000 collectively each year. The money is earmarked for the Police, Public Works, and city Planning departments. There are 74 licensed establishments right now, employing an estimated 300 workers. The parlors pay $1,367 each for a license, and individual workers pay $200 for their initial permits, which can then be renewed for $57 a year.

To get a permit, a masseuse fills out an application with the vice squad. She must have a clean criminal record for the previous two years, and a certificate from a licensed massage school showing she has completed 70 hours of therapy training. In truth, one former massage worker says, it's easy to buy the required certificates for $1,500 without attending any classes. (Several California cities have much tougher requirements aimed at weeding out sex workers while licensing legitimate businesses. Daly City, Santa Clara, and Orange County, for instance, require massage therapists to complete 500 hours of training and pass a written anatomy test.)

The city has been collecting licensing fees for decades. But only within the past two years have the police figured out how to make money by busting the parlors as well.

The practice began after Hallinan was elected district attorney. Under former DA Arlo Smith's regime, most cases against massage parlor workers were dismissed and enforcement languished, says current DA spokesman John Shanley.

After Hallinan took office, he moved to change things. He decided to funnel massage parlor cases into a diversion program run by California Community Dispute Services.

CCDS was a curious choice. The nonprofit agency was established in the 1970s to offer mediation services for warring parties, such as neighbors with disagreements or fighting couples. CCDS also accepts referrals from the DA's Office involving such minor infractions of the law as drinking in public, graffiti, or minor drug possession. CCDS had no experience counseling or aiding sex industry workers when Hallinan made his decision. Shanley says CCDS was picked because there were no other agencies available to handle the massage parlor cases.

One reason Hallinan opted for the diversion program, critics say, is because massage parlor arrests are notoriously difficult to prosecute, and if Hallinan pressed the cases in court he might lose. Shanley concedes that the cases are generally weak.

With streetwalkers, for example, an undercover cop can wear a wire, capture a conversation in which a deal for sex is struck, and make an arrest.

But in massage parlors, customers typically remove most or all of their clothing before getting down to business, making hidden microphones problematic. Discussions of potential sex acts are often communicated in metaphors that are intentionally vague. Police have to wait until the woman strikes a deal and then commits an "act of furtherance" like pulling out a condom or removing some particular piece of her clothing.

That explains why most of those arrested in massage parlors aren't busted for actual prostitution, but instead are cited for being on the premises of a brothel.

If just one worker at a massage parlor can be nabbed breaking the law, everyone in the building is subject to arrest on prostitution-related charges. Two weeks ago, for instance, vice cops raided a Tenderloin massage parlor and arrested 16 people. Only one of the women had been caught soliciting sex, but everyone was taken to jail, photographed, and fingerprinted.

CCDS President Tom Bateman estimates that three-quarters of the cases referred to his agency by Hallinan's office involve women caught hanging out at a "house of ill repute."

Critics decry the "house of ill repute" arrests as bogus, and say the DA's Office would have a hard time making the cases stick if the women insisted on going to court.

Doug Rappaport, a lawyer and former board member of CCDS, says one of the reasons Hallinan funnels the cases to CCDS is because the DA knows the arrests wouldn't hold up in court.

"They're missing an essential element of the crime," Rappaport says. "They are cases that cannot sustain a conviction in criminal court."

But whether the arrests are valid or not doesn't matter if the women -- fearful of being tagged with a criminal record -- agree to enter the CCDS diversion program.

At least that's what the vice squad counts on in order to make money.

Not long after a woman is arrested in a massage parlor raid, she receives a letter from Hallinan's office. It explains that, rather than going to court, she can clear up the matter and avoid a criminal conviction by agreeing to enter the CCDS diversion program.

The woman calls CCDS and schedules an appointment. She shows up -- with or without a lawyer -- and squares off with a representative from the vice squad, usually a sergeant. Typically, CCDS President Bateman serves as arbitrator for the meeting.

The vice officer reads the arrest report from the case. Then the two sides hash out how much the woman will pay to keep her case out of court.

First, CCDS gets its cut, which is not negotiable. The nonprofit agency expects to be paid $125 by women charged only with being present at a massage parlor, and $250 by a woman charged with actual solicitation.

Then it's the vice unit's turn, and the haggling begins.
According to lawyer Katya Komisaryk, the police generally open negotiations by demanding $1,000, divided among all the women arrested in a given raid. For instance, if only two women were arrested, they're hit up for $500 apiece. But the prices are negotiable, she says, and typically each woman pays between $100 and $350.

Once the deal is struck, the woman signs a form agreeing to the payments. Formally labeled a "Directive of the Hearing Officer," the form lays out the terms of the woman's diversion deal. Typically, it does not include any sort of counseling or reporting, like many other diversion programs.

Mainly, the form consists of specific directions on how the woman should pay off the negotiated fines. The form specifically states that payment will be "in the form of a Cashier's Check made payable to: San Francisco Police Department Vice Crimes Section." The form further states that the check will be "delivered to Sgt. Frank Palma at 850 Bryant" within 10 days. (When contacted by SF Weekly, Palma declined to discuss the process, referring questions to his superiors.)

Jennifer Nelson, a massage parlor worker who recently went through the process, says she felt she had little choice but to agree to the payments. Nelson wound up turning over a cashier's check for $250 to the police.

"It seems that both the cop and the [arbitrator] knew that this game was about extortion. And they know we have little choice but to play that game," she says. "They're banking on the fear that we women have."

Deputy District Attorney Reve Bautista, who is responsible for diverting the massage parlor cases to CCDS, disagrees with that characterization. The fines, she says, are a legal and proper way to reimburse the costs of conducting massage parlor investigations. State law, she notes, allows any county whose officer or agent arrests a person to recover a "criminal justice fee."

One of the laws the DA's Office cited to justify the fees, however, states that such "criminal justice fees" can be recovered from a "convicted criminal." Women diverted through CCDS have not been convicted of anything. In fact, that's the very prospect they are trying to avoid.

Bautista acknowledges that, as far as she knows, San Francisco is the only city in California that is allowing cops to collect money from busted massage parlor workers. DA spokesman Shanley says the SFPD probably got the idea to collect the fees from a similar program begun three years ago that fines johns arrested for soliciting sex.

Shanley defends the policy, saying taxpayers should not have to foot the bill for the overtime cops put in conducting their investigations. Police officials, however, would not explain why investigations of massage parlors -- presumably part of the vice squad's job -- seem to require a tremendous amount of overtime.

Ann Amnnix, director of the Police Permit Bureau, argues that "it takes a lot of money to run these investigations on massage parlors," and the fines are "a way for the Police Department to recoup their costs in busting the women."

Although the diversion program offers no mandatory counseling -- or any sort of "program," really -- CCDS's Bateman contends the fines themselves are enough to drive some women out of the business. "The dollar speaks big," he says. "There's something to be said about coughing up a buck. Whether it's a traffic ticket, not putting on your seat belt, or double-parking."

Critics, however, say that police have effectively created a money mill that arrests women, puts the touch on them, and sends them on their way.

Naomi Akers, director of PROMISE, an organization that helps prostitutes leave the business and find other work, says levying fines solves no problems. "It's abusive to say, 'Well, it costs so much money to stake out a case against massage parlors so we're going to offset the cost and charge them,' " she says. "It's exploitative because these women are then going to have to prostitute themselves more to pay off their fines."

By contrast, streetwalkers arrested for prostitution are not allowed to pay fines in exchange for a clean criminal record. Their cases are referred to a different diversion program, one that requires 24 hours of counseling or community service. The program also offers English-as-a-second-language courses, substance abuse programs, and courses in job-seeking skills.

So just how much money is the vice squad making from massage parlor busts, and where is it going?

It's hard to tell. Police officials aren't willing to shed much light on the matter, and that's raising eyebrows among those city officials charged with looking after the public purse.

During the fiscal year that ended June 30, 1997, the vice unit collected about $77,000 in fees, according to the Police Department's administrative office. But officials from the SFPD's fiscal office, public affairs office, legal division, and administrative office told SF Weekly they don't know how much money has been collected in the 17 months since then.

SF Weekly forwarded a copy of one $250 money order written by a massage worker to the Vice Unit to Harold Guetersloh of the city Controller's Office to see if he could track down where the money was being deposited.

Guetersloh says he called the Police Department's fiscal office, and received a general assurance that the money goes into the city's treasury. But Guetersloh says the Police Department told him it only collected somewhere between $7,200 to $7,500 from massage parlor busts during the 1998 fiscal year, which ran from July 1, 1997 to June 30, 1998.

That number seems strikingly low, given that at least 416 cases were referred to CCDS during the first 10 months of 1998, and anecdotal evidence suggests that each woman pays at least $100 to vice.

In response to SF Weekly's questions, both the city's controller and Treasurer Susan Leal say they are now investigating whether members of the vice squad have properly accounted for money they have collected.

Leal says she was surprised to learn that cashier's checks are being made out directly to the Vice Unit, rather than to the city generally.

Leal and the Controller's Office say they are asking police for assurances that, from now on, the checks will be written to the City and County of San Francisco rather than vice, and will be deposited in a city account.

San Francisco's fiscal watchdogs aren't the only ones rethinking the diversion program since SF Weekly began digging into it. Last week, DA spokesman Shanley said Hallinan has stopped sending massage parlor cases to CCDS, and is instead sending them through the diversion program that handles streetwalkers, the one that actually requires counseling and training.

It is unclear what will happen to the vice squad's money machine now that the DA has switched to a different diversion program.

Cynthia Hammond and Jennifer Nelson are not the real names of the two massage parlor workers quoted in this story.

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