2005/06/15 Council Agenda Packet

App. B / Adult Businesses Pornography (1978). Sturman, who reportedly controls half of the $8 billion United States pornography industry, was recently indicted by a federal grand jury in Las Vegas for racketeering violations and by a federal grand jury in Cleve- land for income tax evasion and tax fraud. Newsweek, August 8, 1988, at 3. Evidence of the vulnerability of sexually oriented busi- nesses to organized crime involvement underscores the im- portance of criminal prosecution of these businesses when they engage in illegal activities, including distribution of obscenity and support of prostitution. Prosecution can in- crease the risk and reduce the profit margin of conducting illegal activities. It may also disclose organized crime asso- ciation with local pornography businesses and increase the costs of criminal enterprise in Minnesota. In addition to prosecution, forfeiture of property used in the illegal activities related to sexually oriented businesses can cut deeply into profits. Regulation to permit license revocation for conviction of subsequent crimes may also expose and increase control over criminal enterprises related to sexually oriented businesses. Prosecutorial and Regulatory Alternatives The regulation of many sexually oriented businesses, like other businesses dealing in activity with an expressive com- ponent, is circumscribed by the First Amendment of the United States Constitution.' Nonetheless, the First 3 The First Amendment provides: "Congress shall make no law re- specting an establishment of religion, or prohibiting the free exercise thereof, or abridging the freedom of speech, or of the press, or the right of the people peaceably to assemble, or to petition the government for a redress of grievances.' The constitutional guarantee of freedom of speech, often the basis for challenges to regulation of sexually oriented businesses, restricts state as well as federal actions. See, e.g., Fiske v. Kansas, 274 U.S. 380, 47 S. Ct. 666 (1927). 398 , Minnesota Attorney General's Report / App. B Amendment does not impose a barrier to the prosecution of obscenity, which is not protected by the First Amendment, or to reasonable regulation of sexually oriented businesses if the regulation is not designed to suppress the content of expressive activity and is sufficiently tailored to accomplish the regulatory purpose. The Working Group believes that communities have more prosecutorial and regulatory opportunities than they may currently recognize. The purpose of this section of the Report is to identify and recommend enforcement and regulatory opportunities. Of course, each community must decide on its own how to balance its limited resources and the wide variety of competing demands for such resources. I. Obscenity Prosecution Obscene material is not protected by the First Amendment. Miller v. California, 413 U.S. 15,93 S. Ct. 2607 (1973). The sale or distribution of obscene material in Min- nesota is a criminal offense. The penalty was recently in- creased to up to one year in jail and a $3,000 fine for a first offense, and up to two years in jail and a $10,000 fine for a second or subsequent offense within five years. Minn. Stat. § 617.241, subd. 3 (1988).4 The Working Group believes that Minnesota's obscenity statutes are adequate to prosecute and penalize the sale and distribution of obscene materials. However, historically, widespread obscenity prosecution has not occurred. The Working Group believes this is not because the sale The prior penalty wai a fine only—up to $10,000 for a first offense and up to $20,000 for a second or subsequent offense. Minn. Stat. 4 617.241, subd. 3 (1986). Obscenity arrests are no infrequent that inci- dents involving possible violations of section 617.241 are not separately compiled by the Minnesota Bureau ofCriminal Apprehension. See Bureau of Criminal Apprehension, 1987 Minnesota Annual Report on Crime, Missing Children and Bureau of Criminal Apprrhension Activities. ,9