A hard look at legal prostitution

Recent remarks by Senate Majority Leader Harry Reid have drawn wide attention to Nevada’s unique attitude toward prostitution and set the blogosphere on fire.

In a February 22 address to a joint session of the state Legislature, Sen. Reid said the existence of legal brothels in Nevada is driving away potential businesses and called for the Legislature to ban them.

In the days before his speech, there were leaks that Reid might come out against brothels. His decision to take on the issue was by most accounts completely unexpected, as he has never publicly taken such a position before. The assembled legislators greeted his remarks with silence.

Although those remarks were a very small part of a much longer address, the assembled press focused primarily on the brothel part of his speech. At a press conference immediately afterward, reporters asked Reid why he was bringing up the issue now. Impatient with the constant questioning about the topic he himself had raised, Reid told the reporters, “It seems to me you guys should get a new life.”

Normally very responsive to interview requests, Reid’s press staff in Washington D.C. told the Reno News & Review that “the Senator has said all he intends to say about the matter.”

Since Reid intends to say no more, here is some of what he told legislators:

“I recently met with a group of businessmen who run data centers for technology companies. They visited Storey County to see about opening a facility there, a move that would have created desperately needed jobs. But one of the businessmen in that meeting told me he simply couldn’t believe that one of the biggest businesses in the county he was considering for his new home is legal prostitution.”

Reid got scattered applause when he said, “Nevada needs to be known as the first place for innovation and investment—not as the last place where prostitution is still legal. When the nation thinks about Nevada, it should think about the world’s newest ideas and newest careers—not about its oldest profession.”

But when he said, “If we want to attract business to Nevada that puts people back to work, the time has come to outlaw prostitution,” there was dead silence in the chambers.

Observers noted that the Senator had left room at that point for applause and when none came, he seemed at a loss for several seconds before continuing with his speech.

A Washington Post blogger wrote that Reid needs his political hearing checked.

“The man who only won reelection last year because his erratic opponent [Sharron Angle] was this side of odd and had all the likeability of Mrs. Kravitz addressed the Nevada legislature … and took a moral stand—against prostitution,” wrote Post blogger Jonathan Capehart.

Las Vegas Sun reporter Molly Ball wrote in a story posted on Politico, “Reid’s impassioned lecture landed in Carson City with a thud.”

Others expressed similar views ranging from bemusement to bafflement.

Gov. Brian Sandoval, legislators from both parties and even Republican Sen. John Ensign—who normally agrees with Reid on most Nevada issues—quickly dismissed Reid’s remarks, saying that legal brothels are a local issue to be dealt with by the counties. (Whether brothel prostitution is legal or not is by definition a state issue. The small counties—the only areas where brothels are permitted—have been able to make it legal within their jurisdictions only because the legislature empowered them to do so by passing a state statute.)

Many legislators said they have much bigger issues to deal with, such as closing the state’s massive $2.5 billion budget gap, than worry about legal prostitution. One accused Reid of hypocrisy in calling for the ban when illegal prostitution is rampant in Clark County.

In fairness to Reid, his brothel remarks took up only 250 words out of a 4,000-word speech that focused on the state’s faltering economy. He drew applause when he said he would work to reform education and help ease the burden on state and local school districts. He also touted renewable energy development, talked about the importance of tourism and urged lawmakers to push for the repeal of term limits.

But a U.S. senator can only introduce legislation at the federal level, and no one in the state Legislature is sponsoring a bill to ban brothels, nor are any likely to do so any time soon.

Were Reid’s remarks ill-considered or miss-timed, or are they part of a larger and perhaps more subtle plan? For lack of an opportunity to ask the Senator directly, it is necessary to ask other players in the brothel industry debate what’s going on.

First, Let’s Do the Numbers

Reid’s contention that legalized prostitution is discouraging businesses from relocating to Nevada has gotten little confirmation from the very people whose job it is to lure new businesses to Nevada.

According to Chuck Alvey, president of the Economic Development Authority of Western Nevada, the question comes up seldom, if ever.

“We’ve not had that comment come up,” Alvey said. “One company that I talked to, after they had been here for several years, the C.E.O. told us that his spouse had expressed concern until he told her that there was more illegal prostitution in the city they were moving from than in the whole state of Nevada.”

Alvey concedes it’s possible that prospective businesses are going online to research potential relocation sites and being put off by the proximity of legal brothels, but no one has ever told him that was the case.

On the other hand, brokers have told Alvey that some international businessmen specifically request a visit to the brothels when scouting business sites in Nevada.

“If brothels are a concern, I think it’s way down the list,” Alvey said. “The biggest things we hear from technical and high knowledge-based companies we want to attract here is finding the skilled workforce they need, having the education system they need and finding the cluster of companies that show they can do business here.”

As for education, Alvey said more could be done but that it’s all a matter of context. Some companies come to Nevada and complain that the education system is disappointing, while others say they are thrilled by its quality. Alvey said more companies are thrilled than disappointed.

“Although I think there should be better funding for education, I wouldn’t say, ‘if prostitution is a black mark, education is a blacker mark,” Alvey said, adding that legal brothels have no chilling effect on business recruited.

If there’s little evidence that legal brothels are bad for business, there is even less information about its benefits to the economy. According to Elliot Parker, chair of the economics department at the University of Nevada, Reno, nobody is really studying the economic impacts of legal prostitution.

“Because the state does not tax it, you don’t have the state collecting a lot of information on it,” Parker said. “Because the women involved are independent contractors, you don’t even see the wage information showing up.”

Parker pointed out that the I.R.S. doesn’t even have a category for “legal prostitute” or “prostitute” on its tax forms, so much of that income—if it’s reported at all—would be listed under other categories.

The only real tax benefit is to the few counties that license brothels. Storey County’s two brothels pay about $1 million in taxes a year, which is a sizable part of the county’s annual income of $12 million, but nothing compared to the state budget.

By official estimates, about 1,000 women work as legal prostitutes in Nevada, with about a third of them working on any given day. The women usually set their own rates and give part of their income to the brothel owners. The state’s 25 legal brothels range from small groups of trailers to fancy resorts. Brothel owners say they employ an additional 500 workers as bartenders, cooks, maids and managers.

As for prostitution driving away business, Parker pointed to the Tahoe-Reno Industrial park in Storey County, reportely the largest in the United States, which is having little trouble attracting Fortune 500 tenants despite the fact that the developer, Lance Gillman, owns two brothels right next to the park.

According to Parker, when a market is made illegal, it doesn’t go away, it only goes underground. Law enforcement usually goes after the suppliers, leading to higher prices. Higher prices and illegal markets attract sellers with an “advantage in violence,” while the desire by consumers to avoid getting caught leads to binge behavior.

Parker said, in principle, there may be reasons for government to ban such markets, but intervention can create unintended consequences that could be worse than the original problem.

“My view as an economist is if it’s a market that’s going to exist, it’s much better to be regulated and legal and safe,” Parker said. “I think we’re going the wrong way. I think the rest of the country should legalize [prostitution] and regulate it.”

Parker said Nevada needs to modernize and that prostitution is the least of the state’s problems. He said Nevada’s generally unsavory image has a lot more to do with gaming, the percentage of alcoholics and the low level of education than it does with prostitution.

How Did We Get Here?

Nevada is the only state in the nation that has legal prostitution. According to former state archivist Guy Rocha, this has a lot to do with Nevada’s frontier libertarian attitude, which bumps social convention.

“The attitude is live and let live,” Rocha said. “On the frontier, we had men who drank, gambled and whored. Let it be.”

Ever since the creation of Nevada Territory in 1861, Nevada has generally supported the regulation of prostitution while making that regulation a local option. Local governments tolerated prostitution, but never actually legalized it.

Rocha said a bill was introduced in the legislature in 1871 that would have legalized brothel prostitution statewide. Licenses were to be issued by sheriffs to brothel owners for $10 a month.

All prostitutes were required to submit to a health exam every two weeks by a physician selected by county commissioners. All license money and fees associated with issuing certificates of health to the prostitutes were to be paid into the county treasury, where a fund would be maintained to pay medical bills for legal prostitutes who contracted venereal disease.

If passed, the bill would have repealed the option for local governments to regulate houses of prostitution. It cleared the Assembly by a large margin, but was indefinitely postponed in the Senate.

The status quo was more or less maintained until World Wars I and II, when the federal government pressured local governments to close brothels near military bases, including Reno’s Stockade. After the war, brothels remained closed in urban communities, but were made legal at local option in rural areas.

Finally, brothel owner Joe Conforte forced the issue by convincing the Storey County Commission to approve the Mustang Ranch brothel in 1971. Other counties quickly followed suit. That same year, the state legislature amended the local option provision to exclude counties with populations of more than 200,000—later raised to 400,000—to keep brothels out of Clark and Washoe.

Bills have been periodically proposed to ban prostitution but have mostly died in committee. Two years ago, brothel owners offered to tax themselves at $5 per sex act in an effort to gain respectability and help balance the state’s ailing budget. That proposal, which would have raised only $2 million, was also killed in committee.

Rocha said Nevada has traditionally benefited financially from policies in other states, often during economic downturns. For example, during the mining bust of the 1890s, Nevada legalized boxing. Although the rest of the nation viewed Nevada as a pariah as a result, Rocha said the state’s boxing policy is now held as a model.

Similarly, beginning in the 1900s, national sentiment moved toward making it harder to get a divorce. Nevada competed with several other Western states to create the shortest waiting period for a divorce, eventually beating everyone else with a six-week waiting period.

Nevada remained the divorce and “quickie” marriage capitol of the world until the 1970s, when social policies elsewhere caught up. Rocha said the same dynamic applies to Nevada’s one-time gaming monopoly.

While prostitution would seem to some like a natural fit for the state that pioneered legal boxing and gambling, all-night drinking and quickie divorces, Rocha sees a new challenge to this libertarian point of view.

“There have been some demographic changes in the state,” Rocha said. “A lot of people have come from elsewhere and retired here, many of them social conservatives. In Pahrump, in particular, you began to see these battles: ‘Let’s shut these brothels down.’ ‘But they were here before you were.’ ‘Well we’re here now, and we don’t like them.’ ”

But Reid has some scholarly support. Melissa Farley, a research psychologist and anti-prostitution advocate who wrote the book Prostitution and Trafficking in Nevada, has argued that there is linkage between Nevada’s high rape rate—far above the national average—and the ease of both legal and illegal prostitution in Nevada.

Farley does not distinguish between legal brothel prostitution in the small counties and illegal prostitution in Nevada’s urban areas. In an essay in the New York Times that she coauthored with Victor Malarek, Farley wrote, “Whose theory is it that prostitution is victimless? It’s the men who buy prostitutes who spew the myths that women choose prostitution, that they get rich, that it’s glamorous, and that it turns women on. … Whether the woman is in a hotel room or on a side street in someone’s car, whether she’s trafficked from New York to Washington or from Mexico to Florida or from the city to the suburbs, the experience of being prostituted causes her immense psychological and physical harm.”

What was he thinking?

If legal brothels don’t drive away business and also don’t really do much for the economy outside of a few rural areas, why bring up the issue at all, particularly during a legislative session consumed with more pressing issues?

Washington Post blogger Rachel Weiner has some theories:

• Reid honestly thinks that prostitution is bad for business in the state and that Nevada needs to give up its unseemly side to bring in new companies.

• Reid did it to sabotage John Ensign by forcing him to say that legalized prostitution should be left alone. In light of Ensign’s own lingering sex scandal, this will allow Democrats an advantage when the Republican senator runs for reelection. (Ensign withdrew from the race two weeks after Reid’s speech.)

• Reid is getting revenge on rural counties. He only won one of Nevada’s 15 rural counties in the 2010 election. Reid once accused President George W. Bush of similar motives when he failed to intervene in the Enron scandal during California’s rolling blackouts. Bush didn’t win California during his first election bid. However, Reid has been active in bringing businesses, construction projects and federal funds to the small counties.

• Reid is a Mormon. In his autobiography, Reid wrote about how, while growing up in Searchlight, he learned to swim in the pool of a local bordello and how his mother took in laundry from the town’s brothels. Notwithstanding that, Weiner suggests that Reid may have had a “religious change of heart.”

Respondents to an unscientific poll on that blog voted 36 percent that revenge was the motive, followed by 31 percent who believe Reid is trying to sabotage Ensign. Religious or economic motives garnered votes in the teens.

But George Flint, lobbyist for the Nevada Brothel Association, sees other possible motives at work. First of all, Flint said that Reid was misinformed about the company that balked at moving to Storey County because of the brothels. According to Flint, the company has signed a contract and will be coming to Storey County.

“This sends a message that Harry Reid was pandering to somebody,” Flint said. “I wonder who?”

When pressed, Flint declined to say but did offer the theory that Reid is actually playing to his colleagues in Congress who may have criticized him for coming from a state that condones legal prostitution.

Should Democrats lose control of the Senate in the next election, Flint said that would necessitate a vote over who would become the Senate minority leader, and at least two other prominent Democratic senators have already said they would like the job.

Flint said the revenge scenario is also possible, not against rural counties in general, but against two brothel owners who contributed heavily to Sharron Angles’ campaign in the hope of “owning a senator” if she were elected.

“I’ve known Harry for 43 years, since he came to the Assembly in 1969, and I’ve had a lot of conversations with him, and he’s never once talked about the brothels other than that his mother used to do laundry for the ladies,” Flint said.