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Eric Schlosser
Eric Schlosser
Reefer Madness:  Sex, Drugs, and Cheap Labor in the American Black Market
ISBN: 0618334661
Reefer Madness: Sex, Drugs, and Cheap Labor in the American Black Market
—from the publisher's website

In Reefer Madness, the best-selling author of Fast Food Nation investigates America's black market and its far-reaching influence on our society through three of its mainstays -- pot, porn, and illegal immigrants. The underground economy is vast; it comprises perhaps 10 percent -- perhaps more -- of America's overall economy, and it's on the rise. Eric Schlosser charts this growth, and finds its roots in the nexus of ingenuity, greed, idealism, and hypocrisy that is American culture. He reveals the fascinating workings of the shadow economy by focusing on marijuana, one of the nation's largest cash crops; pornography, whose greatest beneficiaries include Fortune 100 companies; and illegal migrant workers, whose lot often resembles that of medieval serfs. All three industries show how the black market has burgeoned over the past three decades, as America's reckless faith in the free market has combined with a deep-seated puritanism to create situations both preposterous and tragic. Through pot, porn, and migrants, Schlosser traces compelling parallels between underground and overground: how tycoons and gangsters rise and fall, how new technology shapes a market, how government intervention can reinvigorate black markets as well as mainstream ones, how big business learns -- and profits -- from the underground. With intrepid reportage, rich history, and incisive argument, Schlosser illuminates the shadow economy and the culture that casts that shadow.

Reefer Madness: Sex, Drugs, and Cheap Labor in the American Black Market
Program Air Date: June 15, 2003

BRIAN LAMB, HOST: Eric Schlosser, author of "Reefer Madness," all it says about you under your picture on the dust jacket is, "Eric Schlosser is a correspondent for `The Atlantic Monthly` and the author of `Fast Food Nation.` He is currently at work about the American prison system." Was that your idea to have so little biographical information?
ERIC SCHLOSSER, AUTHOR, "REEFER MADNESS:" It wasn`t solely my idea, but I`ve really tried, as a writer, to put the subject matter before me. And there are a lot of writers who I really admire whose life story is part of the process. I love Hunter Thompson`s work, for example. But for me, I`m really trying to take the stories I write about and the subjects I write about and make them, you know, first and foremost. But I don`t have anything I feel I need to hide or any -- no convictions yet, or nothing -- no terrible scandals to hide.
LAMB: You made a splash with this book, "Fast Food Nation." When did it come out, and what`s it about?
SCHLOSSER: It came out two years ago, and it`s an investigative work about the fast food industry in America and its impact on agriculture, our economy, our labor force and how we eat and what we look like.
LAMB: Have you changed your eating habits since you did it?
SCHLOSSER: Not that much. I still pretty much eat what I did before. I just don`t eat them -- eat these foods in the same places. I don`t go to the big fast food chains anymore.
LAMB: Why?
SCHLOSSER: I just don`t want to give them my money. Having learned how they operate, having learned about their business practices, I choose not to spend my money there. But I still like French fries. I just buy them from different venues.
LAMB: What`s the No. 1 thing you don`t like about these big businesses that run these fast food places?
SCHLOSSER: I think once they got big to a certain point, they really lost touch with a kind of a core humanity. They treat workers as though they`re completely interchangeable parts of their operation machinery. They really have not taken responsibility for the impact that they have on our agricultural system and what`s happening in their supplier slaughterhouses, et cetera. So you know, there`s a chain that I eat at in California called In and Out, and it`s a fast food chain, serves pretty much the same foods, but they pay decent wages. It`s real food. And I think in the fast food industry, they`ve reached a certain size and lost touch with some basic human values.
LAMB: Are they a success?
SCHLOSSER: They`ve been a huge success, but I think that their success is beginning to wane. I think the American fast food industry reached its peak around the year 2000 and is now starting to decline. And McDonald`s lost money for the first time in its history last year. And I think people are going to still want fast food, but the era of these gigantic centralized restaurant chains serving food that tastes everywhere exactly the same I think may be ending and smaller companies are going to prosper. So I don`t think that McDonald`s is going to disappear, but I don`t know that it`s going to grow at anywhere near the rate it has in the past, and it may even shrink.
LAMB: In the book that we`re talking about today, "Reefer Madness," you break it up into three sections: pornography and marijuana, but the middle one is the strawberry fields.
LAMB: Did you happen to get onto that through your book on "Fast Food Nation"?
SCHLOSSER: It actually happened the other way around. I started out writing about migrant workers for "The Atlantic Monthly" and spent almost a year looking at migrant workers and following the harvest. And it was after the editors at "Rolling Stone" read that piece, in which I`d taken all these complex economic and historical forces and told them through the story of your strawberry and where it comes from, the editors at "Rolling Stone" asked me to do the same thing for fast food, to look behind the counter and take this commodity that we all take for granted and show where it comes from and the systems behind it.
LAMB: Before you went to the fields, the California farm fields and the migrant workers, where were you? Where`d you live?
SCHLOSSER: I live in New York City.
LAMB: How long have you lived there?
SCHLOSSER: I was born there, and I lived there my first 18 years, then went to university and graduate school and lived in Vermont briefly and now live in New York City again.
LAMB: Where`d you go to school?
SCHLOSSER: I went to Princeton undergraduate and got a graduate degree in history from Oxford.
LAMB: And why Vermont?
SCHLOSSER: Vermont seemed like a nice, quiet place to try and be a playwright and a novelist, but it wasn`t a very successful experiment. I started out as a fiction writer and was unsuccessful in that and moved to New York City, worked for a film company for a while and was not very happy with that, got an opportunity to write a brief piece for "The Atlantic Monthly." They ran it and then gave me a bigger assignment, and that`s pretty much what I`ve been doing ever since.
LAMB: Other than the obvious, that your books didn`t sell, why didn`t you make it as a novelist?
SCHLOSSER: I don`t know. You know, I may be like the comedian who still wants to do "Hamlet," but part of me thinks I`m better at fiction and that sort of writing than I am at this. But I can`t say why. Maybe I was a lousy novelist or maybe -- maybe it`s just the timing wasn`t right. It`s hard to say. I tried this book -- "Reefer Madness" I hoped and tried to get published before "Fast Food Nation," but publishers weren`t interested in it. So it`s hard to say how much is the quality of the material and how much is the marketplace and what the marketplace wants.
LAMB: Why did they get interested after "Fast Food Nation"?
SCHLOSSER: You`d have to ask them. I mean, I think that these subjects are relevant. I try to write about things I care about and that I think are important. But you know, times change. In the paperback edition of "Fast Food Nation," at the end, in trying to explain the success of that book, I`d like to think it`s the brilliance of my prose, but realistically, I think that if "Fast Food Nation" had been published five or six years earlier, I don`t know if it would have found a readership.

It`s very hard to say, you know, why something succeeds or fails in the moment. I think people wrote beautiful books that were published on September 12 or in September of 2001, and no one will ever hear of those books. I have friends who`ve written wonderful books that don`t get reviewed. So I can`t really explain the success. I just try to write about what I care about and see what happens.
LAMB: Princeton and Oxford.
LAMB: Well, what was the family life before you got there like, at -- what were your parents like? Are they still around?
SCHLOSSER: My parents are still alive. My parents are wonderful. I admire my father more than any man I`ve ever met, and I had a very happy childhood...
LAMB: What`s he do?
SCHLOSSER: ... I mean, no complaints. He`s in retirement, but he was a television executive.
LAMB: Full name?
SCHLOSSER: Herbert Schlosser.
LAMB: Is that the Herbert Schlosser of NBC?
SCHLOSSER: It`s the Herbert Schlosser of NBC, yes. And you know...
LAMB: It`s at this point I say, no kidding.
LAMB: I mean, I grew up with that name rather prominent in the business. Tell our audience what he did.
SCHLOSSER: He was a television executive for many years. He rose up the ranks, and he was head of NBC at one point. And then -- you know, I feel like the film "Network" could have been based, in some ways, on what happened to my father. My father represented a very old-fashioned notion of public service in television and, you know, he was involved in all kinds of interesting shows like "Laugh-In" and comedies, but he also had a very strong belief in public service and documentaries.

And -- and his departure from NBC I think was -- was a turning point, not because he was leaving but that period was a turning point in which ratings became paramount, in which ratings were suddenly being published in the newspaper in a way that nobody outside the industry ever thought about them. And I think that, you know, those notions of fairness, like the Fairness Doctrine, and the idea of having a documentary in primetime about anything except Michael Jackson is inconceivable today. But it was a very tough business, very cutthroat business.

But in watching my father growing up, I felt like he was a real man of honor and integrity and was able to succeed without being a slimeball, like a lot of people are in that business.
LAMB: A quick fact. When was he head of NBC?
SCHLOSSER: He was head of NBC in the early 1970s. And I think he -- he left around 1978, something like that.
LAMB: And how old a man is he today?
SCHLOSSER: He is 77.
LAMB: What`s he doing?
SCHLOSSER: He`s in semi-retirement. He`s an adviser on various telecommunications issues. He worked for RCA after that and was, you know, continuing to get involved in new businesses and was -- helped set up the A&E channel, one of the first big cable channels, and has been -- was involved in Internet businesses. And he`s a very vital, active person.

But what was interesting for me is, you know, people have accused "Fast Food Nation" of being anti-corporate and anti-business, and I`m really not that way at all. I mean, I grew up in that kind of household, and it`s just the kind of corporate sensibility of the `50s, `60s and `70s, very, very different from that of the `80s and `90s. And so, you know, I grew up with profits were important, but -- in a household where profits were considered important, but they didn`t -- you know, the weren`t the only criterion. There were other values that mattered, as well.
LAMB: How about your mom?
SCHLOSSER: My mother has been involved in the dance world. She worked for many years with the Martha Graham dance company in New York City. And you know, I had an incredibly fortunate upbringing, in the sense that my father`s work was interesting. It encompassed both news and the entertainment worlds. And my mother has a very literary bent, and my father would be reading history and my mother would be reading novels and fiction. And her father was a painter. So I had a very -- I had a very stimulating upbringing, very fortunate.
LAMB: Well, define kind of broadly your -- I don`t know if you`d call it political views, but your attitude, because you got some pretty sensitive subjects here -- the marijuana sales and the prison sentences and all that stuff, and the migrant workers and also the porno industry. Define overall what you think.
SCHLOSSER: Define what I think about the black market...
LAMB: About the world...
SCHLOSSER: ... and the underground...
LAMB: No, just about the world in general. How do you approach the -- you know, what would you call yourself? Are you a member of a political party, a liberal...
SCHLOSSER: I`m politically -- politically independent. I mean, it sounds corny, but a lot of my work, and having studied American history extensively, is trying to make America live up to its own ideals and to try to reconcile what we say we are and who we say we are with how we actually live and how the government behaves. So again, you know, I`ve been accused of being anti-corporate, anti-business, a socialist, a communist, and yet in my own mind, there have been periods in our history where my own view of the world isn`t that unusual, isn`t that odd.

You know, in terms of "Fast Food Nation," the kinds of recommendations that I called for at the end of the book would have been in keeping with what Eisenhower would have had in place. If you look at the Eisenhower era, we had strict anti-trust enforcement, high proportion of labor union membership, you know, a graduated income tax. So you know, in defending myself against critics, and particularly now, with this administration, I would say that, you know, the people who are running the Congress and the White House are radicals, and I don`t feel as though I am.

On some issues, I`m very liberal politically. I spent a year looking at murder for "The Atlantic Monthly" and wrote about the victims` rights movement and, you know, the National Rifle Association distributed that piece and, you know, really liked the piece. So, hopefully, if you have a complex view of the world, it`s not easy to categorize you.

But certainly, what I`ve tried to do with my investigative work is tell stories that the mainstream media is ignoring for one reason or another, and particularly to bring the voices of people whom they ignore to the public, whether it`s migrant workers, whether it`s, you know, the meat-packing workers I wrote about in "Fast Food Nation." And so I guess it would take someone else to categorize me neatly. Ideally, two different people with two different political points of view could read one of my books, get something from it, come away feeling differently.

I mean, I try -- I try at the end of each section or I try at the end of the book to propose solutions, to make recommendations. But the bulk of the work is investigative reporting and, hopefully, is balanced and tries to be fair.
LAMB: You interviewed a woman by the name of Nina Hartley?
SCHLOSSER: Nina Hartley.
LAMB: Nina Hartley.
SCHLOSSER: Nina Hartley, yes.
LAMB: Nina?
SCHLOSSER: Yes. We had somebody at work at our place called Naina, so it`s -- the name goes back and forth.
LAMB: Who was she, and why`d you interview her?
SCHLOSSER: Well, when I interviewed her, if you had, you know, passed by us in the restaurant, you would have thought that she was an attractive aerobics instructor or maybe a -- you know, a sociology graduate student, but she`s actually one of the most legendary and successful porn actresses in America and very smart, very articulate. And she described for me the labor practices of the industry. The three essays in this book, "Reefer Madness," you know, are about black markets. And in a way, it`s a business book. So in the pornography section, Nina Hartley was a very, very good guide to some of the labor practices in the industry.
LAMB: And so why would you interview her? What`d you learn from her?
SCHLOSSER: I learned, you know, what the wage rates are. I learned what the life is like for people who -- who work in this industry, for the women who work in this industry. And she wasn`t the only porn actress who I interviewed. She was the most articulate, and she was one who I -- who I put in the book. But you know, I was trying to get a sense of what is it like to do this job. She`s a woman who, you know, is extremely sophisticated, has read widely in political theory, considers herself a feminist and is very articulate. Most porn actresses don`t fit that bill, and she has a rosier view of this work and of this industry than other people I met. But she was a -- she provided, you know, a lot of insight into how it works and who gets paid and where the money goes and -- et cetera, et cetera. No unions in the porn world yet.
LAMB: Did I read that you -- you say that there`s something like 11,000 porn films a year produced?
SCHLOSSER: Eleven thousand videos...
LAMB: Videos?
SCHLOSSER: ... are produced. Yes, different -- different titles. Some of those may be, you know, old material re-spliced together. But that`s -- that`s an extraordinary number of titles.
LAMB: What are there -- do you happen to know the number of movies that are made every year to (UNINTELLIGIBLE)
SCHLOSSER: I -- I -- oh, gosh!
LAMB: I mean, it`s not more than 150, 200 movies.
SCHLOSSER: It`s probably about 100, 150, something like that.
LAMB: But 11,000 videos a year.
LAMB: Different -- what, are they stories?
SCHLOSSER: Most of them are not stories. Most of them are just scenes of sex cut with one another. But you know, there`s been a huge growth in the production of porn. The VCR, you know, took it out of adult theaters and put it into people`s homes, and it`s clearly a product that people like a lot and want to buy.
LAMB: How many people buy it a year?
SCHLOSSER: That`s a good question. I don`t know the answer to that. But clearly, a lot of them. I mean, the video store rentals, the number of titles that are rented, I think, is 790 million a year. So when you figure the adult population of about 200 million, that`s a lot of people renting porn.
LAMB: Blockbuster`s -- what is their rule on that?
SCHLOSSER: Blockbuster won`t carry porn. So this has been a real boon to independent video stores at a time when they`re competing with Blockbuster fiercely. These are -- you know, these are films that they can rent and earn money from at a time when Blockbuster is driving them out of business left and right. So oddly enough, you know, the mom-and-pop video stores rely a lot more on the revenues from porn than the big companies.
LAMB: Who`s Ruben Sturman?
SCHLOSSER: Ruben Sturman was a figure who played a central role in the rise of the pornography industry. And you know, every industry has these -- these great robber barons, these magnates. There was a history book -- I`d love to rattle off the author. I can`t remember. But the title of it was, "The Lords of Creation," and it was about the Rockefellers and the Carnegies, who built great America industries. And Ruben Sturman was that for the porn industry. And what struck me about him...
LAMB: This is his picture, by -- is this him?
SCHLOSSER: That`s him. Whereas Hugh Hefner and Larry Flynt courted publicity and loved to be in the paper, Ruben Sturman, who was much wealthier and more powerful, didn`t like any publicity, would appear in public often wearing disguises.
LAMB: Like here?
SCHLOSSER: Like here. He`s got his Groucho Marx nose on. And he ran this worldwide porn empire from the suburb of Shaker Heights in -- suburb of Cleveland, Ohio.
LAMB: Now, you interviewed him, it says.
SCHLOSSER: I interviewed him.
LAMB: But he`s no longer alive.
SCHLOSSER: He`s no longer alive. He started out as a comic book salesman in Cleveland in the early 1960s, late 1950s, and basically was a successful upper-middle-class businessman until he started to sell a few girlie magazines and branched out from that, one thing led to another, and created this gigantic porn empire. I interviewed him once he finally had been sent to prison by the federal government. The federal government started prosecuting him in the early 1960s, and it took almost 30 years for them to really put him away. But I interviewed him at the end of his life.
LAMB: What are the rules about pornography?
SCHLOSSER: That`s a very good question. I don`t know that there are any rules at the moment. I mean, right now, the federal -- federal law forbids the production or distribution of obscene material. That`s a law that was passed in 1873. But the question is, what`s obscene and what`s not? I mean, we all have a fairly good notion of what a murder is or what an armed robbery is. That`s a -- that`s something few of us would argue about. But an obscenity crime is unique in that it occurs in the mind. So whatever a jury says is obscene is obscene.

The federal government has tried very hard to keep hard-core porn off the market, and in the 1980s in particular, under the Reagan and Bush administrations, really tried to crack down on porn. Unfortunately, juries, even in very conservative communities, kept on saying hard-core porn wasn`t obscene. It`s kind of a gray area right now. But nevertheless, some very, very big corporations are making a lot of money off of pornography.

And in telling the story of this industry -- you know, Ruben Sturman being the robber baron who really gets it into being a gigantic worldwide industry, he passes from the scene and the people who are making a lot of money from porn now have names like AOL Time Warner, Hilton, Marriott. They are distributing via satellite and cable and in their hotel rooms material that could easily have gotten you sent to prison in the early 1960s, maybe even in the early 1970s.
LAMB: Hard-core porn defined?
SCHLOSSER: Hard-core porn would be sexually explicit material in which the sex acts are unmistakably real, as opposed to simulated. You know, R-rated, you know, Hollywood films -- maybe they`re actually having sex, maybe they`re not. But in hard-core, they really are, and it`s visibly so.
LAMB: Have you done any analysis of how much money comes into either the cable industry or the direct satellite industry?
SCHLOSSER: Yes. I mean, these are -- these are rough estimates. About $460 million, $500 million a year of porn is sold via cable and satellite and upwards of $200 million via hotels. So that`s a -- that`s a lot of money.
LAMB: Sturman -- go back to the beginning. Where was he from? And how did he get into the comic book business?
SCHLOSSER: Yes. He just -- you know, he was -- he was in the Army Air Force during World War II, got involved in a candy distributorship in Cleveland, met somebody who had access to remaindered comic books. These were comic books that were supposed to be returned to the publisher and shredded, but he got them cheaply somehow and was able to sell them for a very small amount of money. And he just set up this magazine distribution network in Cleveland, going to local candy stores and mom-and-pop stores with his remaindered comic books and later crossword puzzle books, et cetera, et cetera. And he just happened to be in the right place in the right time, or ultimately, maybe the wrong place at the wrong time.

He had a distribution network, and at that very time, "Playboy" was successful, and there were a lot of imitators of "Playboy," and this was very risque to show women without their shirts on. And his distribution network was perfect for selling these girlie magazines. So he started out in the Midwest, distributing girlie magazines. And gradually, his empire grew. And as films became part of the porn world, he put in these peep booths, which showed, you know, a film loop of sexual activity. And that was incredibly profitable and...
LAMB: Where`d he put them in?
SCHLOSSER: He put them in the back of the store, in a booth with a door that could be locked. And there had been stag films, you know, dating back to the beginning of the 20th century that were shown at college fraternities and Kiwanis Clubs. And the peep booth allowed men to have a stag film for one, and close the door and lock the door and feed quarters into this machine. And it was incredibly, incredibly profitable. So within a relatively brief period of time, Sturman came to dominate the production and the distribution of hard-core pornography not just in the United States but also throughout the world, in Western Europe, as well.
LAMB: You suggest some hypocrisy among conservatives?
SCHLOSSER: Well, not all conservatives, but one of the things I look at in the porn section is the public morality and the desire to stamp out vice and these moral crusades and the underlying reality not just about how people are really behaving, but even within the same person, you see this public desire to stamp out vice and then this private desire to indulge in it. I mean, one example would be Father Bruce Ritter, who was a member of President Reagan`s Meese commission to investigate pornography.

And Ritter was very adamant by day that homosexuality should be included in the commission`s purview and that homosexuality should be officially condemned. And by night, he was cruising for young male prostitutes. And again and again, you see in our history this kind of obsession with pornography in some people being combined with a real desire to indulge in it.

Now, I`m not saying that of all conservatives, by any means, or of all critics of pornography. There are a lot of people who criticize it, and rightly so, on its content. But when you look at America, we have some of the toughest laws on pornography in the Western world, but we watch more porn, we produce more porn -- you know, we have a pornographic culture, and the same is true, you know, for the other section of the book, on marijuana. We have some of the toughest marijuana laws in the Western world. I mean, you can get a life sentence without parole for a first-time marijuana offense. But we grow more marijuana. You know, we smoke more pot. We write more songs about pot. I think that speaks to very deeply conflicted American psyche and culture on these issues.
LAMB: Go back to Bruce Ritter, Father Bruce Ritter. How did you know that he cruised at night, trying to find homosexuals?
SCHLOSSER: He had -- he had to step down from -- he was the head of Covenant House, and it was revealed -- I believe one of the young men -- Covenant House was a place in New York City for runaways, a Catholic charity. And one of the runaways, you know, came out publicly and said that he had been paid to have sex with Father Ritter. And there was a scandal that involved his behavior, and he had to -- he had to step down.
LAMB: You also write about a man named Charles Keating.
SCHLOSSER: Yes. And Charles Keating was a -- was a -- it`s interesting that a lot of these people come from roughly the same place. I mean, Larry Flynt was from Ohio. Ruben Sturman was from Ohio. Charles Keating, who became the nation`s biggest anti-pornography crusader, also from Ohio. And starting in the late 1950s onward, he was really the foremost American opponent of sexually explicit material. But his interest in the subject, you know, from my point of view, just seemed a little bit excessive.

And in the book, I quote from one of his appearances in Congress, where, you know, in order to make his point and his organization -- you know, making its point about pornography, they`re reading into the "Congressional Record" in front of young people who have come to the Congress that day to watch these hearings, you know, relatively explicit sexual material. And he wound up being involved in the collapse of Lincoln Savings and Loan -- you know, a huge bank scandal in the 1980s. And I think ultimately...
LAMB: So he`s the Keating Five with...
SCHLOSSER: Yes, he was the Keating Five. And I think ultimately, you know, a lot of the crusaders against vice are human, too, and I think should be more forgiving of human faults. You know, he who is in glass houses -- that old -- that old quote. And yet we have these periodic campaigns against vice that are very moralistic and very unforgiving, ultimately. I mean, I`m not justifying people who smoke too much pot or people who make pornography that`s, you know, upsetting. But this desire to be purer than pure and condemn others for their personal habits is very American.

And if you look at the history of this country, we were founded by Puritans -- I mean, literally by Puritans. But at the same time, this country has a very rebellions and iconoclastic history and tradition. And I think through all these issues, you see this ongoing battle between the Puritan part of our culture and the very rebellions and iconoclastic, you know, dissenting tradition that we have.
LAMB: There`s some reference I was looking for here in that chapter about Richard Nixon and Jews and his attitude...
LAMB: ... about the Jews and pornography.
SCHLOSSER: This -- that was actually about marijuana.
LAMB: Oh, I`m sorry.
SCHLOSSER: Yes. When -- when marijuana was really being debated in the late 1960s and early 1970s, Nixon appointed a commission to investigate what should be done about marijuana in America, whether it should be legalized or kept illegal or decriminalized. And when the commission that was appointed came out in favor of decriminalization, he blamed it on the Jews, and that never happened. Those recommendations were never -- were never carried out.
LAMB: Back to the porn chapter. Philip Hartley? Who was he?
SCHLOSSER: I`m sorry?
LAMB: Philip Harvey.
SCHLOSSER: Phil Harvey.
LAMB: Harvey, yes.
SCHLOSSER: Philip Harvey is a very interesting figure who today runs one of the largest mail order -- probably the largest mail order pornography companies in America. But he runs it from North Carolina, and he leads a -- he leads a double life. He`s a very articulate, very intelligent Harvard-educated expert in family planning, and he uses many -- much of the profit from his pornography empire to fuel charitable work throughout the developing countries, and started out selling, you know, birth control, and that same 1873 law that I mentioned earlier, the Comstock Act that forbade obscene material from being distributed, also forbade the distribution of information about birth control through the mail.

So, Harvey started selling condoms and other birth control information through the mails, fought the government in the early 1970s to do that, gradually branched out to sexually explicit materials. And he`s like a character out of a play by George Bernard Show, in the sense that he is so -- he seems so conservative personally and seems very patrician and seems like an academic and you would never think in a million years that here is one of the most influential and wealthy pornographers in the United States.

And he, you know, believes in what he does. He uses the profits for the most part, you know, for good ends, and he takes the products that he sells and subjects it to, you know, a commission of sex therapists and makes sure there`s nothing, you know, horrible about it, and he`s an interesting, interesting character.
LAMB: Did you interview him?
SCHLOSSER: I did. I interviewed him. And he stood up to the Bush administration, the first Bush administration`s war on pornography because the government realized that they couldn`t get juries to convict people for obscene material, they came up with a strategy of indicting people in many different districts at once, so Harvey was indicted again and again and the strategy was not to win any individual case but to come with so many indictments that you`d have to plea bargain and go out of business, because, you know, the government can afford to press eight or nine cases at once, but most individuals can`t defend themselves in that many venues.
LAMB: You did paint an interesting picture of Hillsboro, North Carolina.
LAMB: How many people there work in the...
SCHLOSSER: I can`t remember the exact number but it`s -- I think it`s the biggest private employer in this little town.
LAMB: Five thousand residents, in this chapter you say. I don`t know what the figure is on the number of...
SCHLOSSER: A lot of them.
LAMB: This is an outfit...
LAMB: PHE Incorporated.
SCHLOSSER: And this is Phil Harvey`s huge mail order operation. It`s run out of Hillsboro, North Carolina.
LAMB: Selling what?
SCHLOSSER: Selling, you name it. Selling hard-core videos, selling sexual devices, selling books, very -- the kinds of things that you find in a New York City sex shop, but he argues that this is the most socially responsible way to sell this material. You`re not imposing it on anyone, you know, you`re not putting it into anyone`s face, the marketing or anything like that. It`s done through the mail. It`s done very discreetly, and this is a very conservative community that doesn`t seem to mind his business, and most of his employees are women. And...
LAMB: Did you see them....
SCHLOSSER: I would -- I went into the warehouse and I just saw this vast high-tech warehouse in which, you know, all these packages are being sorted, and very dainty, white haired southern women are handling material that you would not normally think that they would be handling and packaging and boxing.

But I think, you know, if you visit that operation, you get a sense of how much a part of the mainstream in America this material has become and these objects have become. In his own area, juries won`t convict him because they believe that adults should be able to see what they want to see in the privacy of their own homes.

This is a far cry from the early 1960s, again when Reuben Sturman was starting out. Lenny Bruce, the comedian, was imprisoned for saying a few swear words, which I won`t say in this show, during his nightclub act. It`s remarkable what you could be prosecuted for in the early `60s and what you`d see on HBO today is far more explicit than what people were sent to prison for 30, 35 years ago.
LAMB: You thank a fellow rather strongly in the back by name of Rossfelder.
LAMB: Who was he?
SCHLOSSER: Rich Rossfelder was a federal agent in Cleveland with the Organized Crime Strike Force. And he became intrigued with Reuben Sturman, because -- this porn magnate of Cleveland -- because no one really knew much about him, and the FBI had been trying for more than a decade to get Sturman indicted and convicted on obscenity charges. But the more that Rossfelder learned about Sturman`s operation, the more he thought that Sturman was a multimillion dollar tax cheat, and Rossfelder was a criminal investigator for the IRS.

And in order to avoid giving money to the government, Sturman had created an unbelievably Byzantine corporate structure, the sort of thing that Enron created a couple of decades later, to shift money from various off -- to various offshore corporations and offshore banks, and Sturman felt that he had no obligation to subsidize the government that was trying to put him into prison.

So Rossfelder started investigating Sturman, I think in 1975 and spent almost 20 years pursuing him doggedly throughout the world, to build a case against him, and eventually did bring him down. But very honorable, Rossfelder, very good guy, a very honorable guy and, really to me, a model public servant.
LAMB: So he wasn`t after the porn side of this. He was after the tax cheats.
SCHLOSSER: I don`t think that Rich is a great fan of pornography, but what offended him was the idea, here was a multimillion dollar tax cheat, and a very arrogant one. Sturman had a lot of hubris. He -- after the first time the FBI raided his warehouse in 1963, he responded by suing J. Edgar Hoover. Now, this was at the height of Hoover`s power, so Sturman was a very arrogant guy, who really believed in his own intellect and his own abilities, and it`s remarkable how many times Sturman did beat the federal government and how close he came even to the winning the tax case -- you know, as I write in the book, he tried to -- he tried to tamper with the jury, and after spending, you know, almost two decades pursuing Rueben Sturman, Rossfelder`s quite blunt now about how if Sturman had managed to tamper with the jury and there had been a mistrial, Sturman might have walked free and never gone to prison.
LAMB: What was the story about the juror that was his second wife picked up and ... (CROSSTALK)
SCHLOSSER: Yes. In the middle of the trial, Sturman had a very attractive young wife, and there was a young male juror who received a note from her, and the juror had no idea this was the lead defendant`s wife. But the note suggested they meet later on, and he wound up going out to dinner with her. And she clearly offered him -- she tried to persuade him to find Sturman not guilty, and it`s quite possible that a different juror -- this juror wound up voting to convict -- but a different juror might have accepted money or sexual favors in return for a not guilty plea, and that would have been the end of the government case and Sturman might have walked free.
LAMB: Did you talk to either the juror or the second wife?
SCHLOSSER: No, I didn`t. In focusing on Sturman and his career, I -- again, this is about -- the section is about pornography, but it`s a business piece. It`s -- the book is a business book, and I really tried not to get too involved in his personal life, I never sought out his children and I never sought out his ex-wives. I wasn`t as interested in that personal side of his life, but just in how he built this empire.
LAMB: Go back to the ...
SCHLOSSER: She was later sent to prison, though, for her role in tampering with the jury. So...
LAMB: So they did catch her on this?
SCHLOSSER: They did catch her on this, and so -- you know, in writing about family members, I tried to write about them, you know, to the degree that they were convicted of various crimes but not to get into his personal life.
LAMB: You said that Rich Rossfelder took 20 years...
SCHLOSSER: Almost 20 years.
LAMB: How many times was Sturman tried?
SCHLOSSER: He was tried...
LAMB: For anything?
SCHLOSSER: I can`t -- I can`t remember the number, but it seems as though he was tried every two years or so.
LAMB: How many times did they convict him?
SCHLOSSER: On federal obscenity, on state obscenity charges, again and again he was tried for the content of the material that he was selling, and he beat the rap every single time. And every time that he beat the rap, his stature grew even larger in the porn industry.

He was adamant about beating the federal government, and he would subsidize the legal fees of other people in the industry, even if they were rivals, if they would stand up to the government.

And it wasn`t until the end, when he had already been convicted on tax charges, that he decided to plead guilty to an obscenity charge in Las Vegas. And so if you -- if you think of -- the federal government tried to get him on obscenity charges dating back to 1963, and it took -- it took 28 years for them to get him on a single charge. He had brilliant lawyers, and he was willing to fight, you know, any indictment.
LAMB: In the middle of this, you talk about him moving money offshore and I want to ask you about that. What are the rules today? I know he moved them to Swiss banks, he also moved them to Liechtenstein...
LAMB: So, what today -- and I think the Virgin Islands is in there somewhere.
LAMB: What is - what are the rules today about moving money offshore?
SCHLOSSER: Well, you know what? An IRS agent would be better versed than me to tell you what the taxation implications are, but Sturman really pioneered all kinds of very innovative methods of money laundering, and, you know, by trying to get the money offshore, he didn`t want to just park it offshore, he wanted to be able to use it in the United States. So he would set up various corporations or establishments. He did it in Liechtenstein, he did it in Panama, he did it in the Cayman Islands, and then those offshore corporations would be making investments in the United States, and the IRS doesn`t have access to offshore corporations and their books.

Towards the end of my book, I talk about how -- what Sturman was doing and pioneering, many corporations in the United States, you know, I`m sure they`ve looked at the tax law very carefully, are not breaking the law in doing it, but the strategy has been similar to avoid paying taxes in the United States. There`s been a big boom in the last 10 years of what is called inversion transactions, which is American companies that have all their facilities in the United States taking out a mailbox overseas and calling themselves foreign corporations to avoid paying tax.

In Sturman`s case, he didn`t want to pay taxes for philosophical reasons, he didn`t want to give this government that was trying to put him in prison a single penny. But I think he also wanted to enjoy as much of his money as he could.
LAMB: He died again in what year?
SCHLOSSER: He died, I think, in 1997. He died in a federal prison, and by then, you know, when I met him, he -- he was like a proud and deposed head of state. He claimed to be completely broke, although that`s never really been proven if he was, and he might have had millions of dollars parked in offshore accounts that Rossfelder and the IRS never found.

And the porn industry had moved on. I mean, it had become corporate, it had these relationships with the satellites and the cable companies, and Sturman increasingly seemed like a figure from the shadowy past. There were allegations that Sturman had links to organized crime, to the Gambino family, and so by the time I met him, he was a very bright, very articulate lonely man in a prison in Kentucky whose time had clearly passed.
LAMB: Want to go to another section, but first want to ask you a couple of philosophical questions about the book. Long, detailed source notes in the back.
LAMB: But relatively short book. Is that your philosophy?
SCHLOSSER: Well, I`ve got to be careful that the source notes never become longer than the actual book. I believe in transparency as much as possible with the work, and the same was true with "Fast Food Nation. For readers who are interested in something I`ve written, who want to read more about it, the source notes are there. For readers who don`t believe what I`m saying and want to see where that came from and check it for themselves, the source notes are there. For people who might think of suing me for libel, the source notes are there.

So I`m trying -- trying to be very careful as a journalist and also not rely on unnamed sources and expect the reader just to take my word that these things are true. If you look at "Fast Food Nation" and you look at this book, there are a lot of things in it that are potentially controversial that haven`t been written about extensively before, and I`m not expecting anyone to just take my word on it, and so, I`m going to try to keep the source notes under control for the next book.

But I feel, you know, there are no footnotes in the text, so people who want to read the book and never look at the source notes -- that`s just fine. But people who are curious or questioning or litigious can look at the source notes and see that it`s all there, where I got that.
LAMB: Put it in context, it`s about 60 pages out of 300 overall. The other thing I want to ask you about is this book cover.
LAMB: Never seen anything like it. It`s this -- I`m holding it sideways so the audience can read it. Whose idea was that?
SCHLOSSER: Not mine. But I like it. I like that -- I like that there`s a pull quote from the book, which gives you on the cover, you know, one of the central themes of the book, which is that these black markets and the mainstream are pretty much linked together. And I try in the book to show that this is one country, America, and there`s something artificial about dividing these markets from the rest of our markets.
LAMB: How big is the black market?
SCHLOSSER: It`s huge. And economists agree that it`s really been growing since about 1970. But what its actual size is? Nobody knows. I mean, I tried to use statistics from a conservative Austrian economist who was doing work for the International Monetary Fund. His estimates were 8 to 10 percent of our gross domestic product. That would be about $1 trillion.

When the IRS in 1998 looked at how much money, you know, people were evading in taxes, they came up with estimate of $200 billion was not being paid in taxes. And that would mean about $1.5 trillion in income was not being reported. And that doesn`t include illegal activity, so it`s huge. It`s gigantic.
LAMB: Who is Mark Young?
SCHLOSSER: Mark Young was a hippie biker who I wrote about in the marijuana section of the book. And he`s no saint, but he`s certainly no serial killer.
LAMB: Where is he from?
SCHLOSSER: He`s from Indiana.
LAMB: Where in Indiana?
SCHLOSSER: In Indianapolis. And he was involved in a marijuana deal. He didn`t grow the pot. He didn`t sell the pot or distributed it, but he introduced a grower to a distributor and took a cut on some of their sales, and when this marijuana growing operation was shut down, Mark Young refused to cooperate with the government, refused to testify against anybody, refused to admit that he was guilty.

He`s a very proud marijuana smoker. And as a result, for his first marijuana crime, he was sentenced to life without parole and sent to a very scary federal penitentiary in Kansas.
LAMB: Did you go see him?
SCHLOSSER: I did. And that was - that was quite an experience. Leavenworth penitentiary is a very scary building, and it was designed to be that way. It was the first federal penitentiary. And it`s very strange. Its architecture is modeled on that of the U.S. Capitol building, but it`s -- it`s this, you know, federal --the Capitol building is like our symbol of freedom, but somehow they`ve transformed that into a symbol of -- it`s a very scary place, very, very -- keep on saying that, an old prison, and very dangerous, very, you know, that`s where they send convicted international terrorists and killers, and here was this hippy biker there for pot deal.
LAMB: How old is he?
SCHLOSSER: He was -- oh, gosh, he`s probably about 48 now. He was in his mid-30s when he got sent to prison. He wound up after -- after I wrote about him for the "Atlantic Monthly" and after the article came out, his life sentence was reduced to 12 years, which is still longer than the typical convicted killer spends in prison in the United States. So in the marijuana section, I`m trying to come to terms with how do we punish someone more for marijuana in America than for killing somebody with a gun?
LAMB: You list a number of conservatives that are for the decriminalization of marijuana.
LAMB: Is there any way to put people in classes as to what they think about smoking marijuana?
SCHLOSSER: Well, you know, it`s -- it`s generally a very -- a certain kind of moralistic conservative who has led the prohibition of marijuana and is in favor of these very tough sentences, the current drug czar John Waters is in favor of increasing some of the penalties for marijuana. And yet, there are other conservatives who come from a much more libertarian tradition and not as much of a moralistic tradition, like William Buckley, Milton Friedman, George Schultz, who have called for the decriminalization of marijuana.

And the traditional political labels don`t always apply when it comes to the war on drugs. A lot of the tough legislation was eagerly sponsored by liberal Democrats, and we`ve had one president, who has admitted to having a joint in his mouth, which was Bill Clinton, and more people were sent to prison and arrested for marijuana during the Clinton administration than during any other presidency. More people were sent to prison while Clinton was president than during any other presidency.
LAMB: You say -- I`ll just read them off, that a third of the population has smoked marijuana, that 20 million smoke it a year, that two million smoke it every day, and that half of the -- I mean, most of the marijuana in this country is grown in America`s heartland.
LAMB: Indiana was all over this book.
SCHLOSSER: Yes. I mean, the reason that I wrote, you know, the way that the book works is that marijuana is a black market commodity. Illegal immigrants are black market labor. And then pornography is an example of how a little black market becomes mainstream.

I wrote about marijuana and not cocaine for a number of reasons. It`s the most widely used illegal drug in the United States. It`s the most popular, and it`s also the one that we produce here. You can`t blame this problem on Colombian cartels. This is an all-American crop. It`s being grown, you know, not just in Northern California or Hawaii, which is -- or Kentucky, which are the popular stereotypes of marijuana growing, but I wrote about a very profitable marijuana farm in Indiana. It`s being grown widely in Illinois, in Missouri, and no one knows for sure but I believe and I contend in the book that most of the marijuana being grown in the United States is coming from the Farm Belt, and some people believe it`s our largest cash crop in the United States.

Corn is -- our corn crop is worth about $19 billion. Some people think our marijuana crop may be worth as much as $25 billion, but in any event, it`s huge, because, you know, apples, which is our biggest fruit, I mean, that`s about $1 billion a year, and so even if it`s five billion or 10 billion in marijuana, that`s a huge, huge American industry. And again, come out of the heartland.
LAMB: You say between 100,000 and 200,000 commercial growers in the United States.
SCHLOSSER: That`s a rough estimate that comes from an old federal drug investigative report, but clearly if 20 million people are smoking it a year, you need a lot of people to grow it, and the estimate of two million a day smoking it and 20 million a year, these come from government surveys in which people are asked if they smoke marijuana. And most likely that understates the number considerably, because given the marijuana laws that we have now, I think a fair number of people aren`t going to tell the government sincerely and honestly if they`re using marijuana or growing it.
LAMB: If they arrested you or me and we had smoked it...
LAMB: ... what`s -- is there a mandatory sentence?
SCHLOSSER: No. It`s a very unusual type of crime in the sense that a marijuana crime can be subject to local law, state law and federal law simultaneously. And as a matter of fact, if you`re arrested with some marijuana and found innocent under local law, or under your state law, the federal government could still prosecute you for the same marijuana and send you to prison.

I mean, I write about a marijuana grower in Florida who was found innocent or who was given a very minor sentence under state law, and then was prosecuted for the same marijuana under federal law and given a life sentence. It varies -- it entirely depends on who arrests you, who decides to prosecute you, and what they decide to prosecute you for, and one of the big themes of this section is the amazing increase in prosecutorial power as a result, because under federal law, marijuana is illegal in every state of the union in any amount. So technically, the federal government could prosecute anybody arrested for marijuana anywhere in the United States.

In practical terms, they don`t do that. But if there`s a prosecutor who doesn`t like you and really wants to cause you a hard time, you can be in big trouble even for, you know, relatively small amounts of marijuana.
LAMB: How many people are in prison or jail today because of marijuana?
SCHLOSSER: Very, very hard to calculate, and the best estimate I could come up with is about 20,000 in federal prison, 30,000, 35,000 in state prison. And jail is very hard to guess, but a lot. The one area that`s looked at marijuana arrests for possession, just for simple possession of marijuana and who goes to jails in Maryland, they did a study, and they found that one out of every four people arrested went to jail for at least a night and one out of every six arrested went to jail for at least a week, and that`s a lot of people when you figure that nationwide about 700,000 people are arrested for pot every year, and that`s more than for any other drug.
LAMB: Before we run out of time, I asked you about your mother and father, what about your own family? Are you married? Do you have kids?
SCHLOSSER: I`m married. And I have two kids.
LAMB: How old are they?
SCHLOSSER: And they`re 10 and 12. And I look forward to the day when I let them read one of my books. So far, my daughter is maybe a year or so away from that.
LAMB: Why`s that?
SCHLOSSER: This is -- these are very disturbing subjects often. I mean, in "Fast Food Nation," you know, the meat packing section is very -- is very graphic and I think very upsetting and, you know, I think I`ll wait a year or so before I want my daughter reading about hardcore pornography.
LAMB: What`s your own attitude? What about your kids as they grow up about all this, fast food, pornography, smoking marijuana?
SCHLOSSER: You know, I want them to obey the law. I`ve really seen the consequences of seemingly trivial offenses and how that can destroy a life. I mean, if you`re caught with any amount of marijuana and convicted of a misdemeanor, you can have student loans taken away for life. So I`d like them to obey the law but I`d also like them to grow up questioning the law and not just accepting the status quo, and thinking for themselves. So, you know, try to give them a sound, moral foundation and then they`re going to have to figure out these issues for themselves.
LAMB: This book as we read earlier says that you`re already at work on that book on the American prison system. Did that come out of all of this?
SCHLOSSER: It did. It came out of -- I mean, I`d never been in a prison before in my life, before visiting Leavenworth penitentiary to see Mark Young blocked up there for pot, and in looking at our drug laws and in looking at the black market, and it really made me think about our a prison system and who`s in prison and why? And that`s the next book.
LAMB: When is that going to come out?
SCHLOSSER: I`ve got to finish writing it. I`d say a year and a half, something like that.
LAMB: And at this stage in your career, are you happy with the way things are going? There`s no novels here. These are all serious books.
SCHLOSSER: Yes. Absolutely no complaints. To be able to write about what you care about, and to get it published and -- you know, what I`m trying to do is make people think about these issues, so to the degree that there can be a public discussion of them because of what I`ve written, no complaints.
LAMB: And on the first book, anything happen as a result of your book "Fast Food Nation"? Any legislation, any...
SCHLOSSER: I don`t know. I mean, I`m -- I`m wary to claim any cosmic, global credit for anything that I`ve written. I`ve found individual people that I`ve met have told me that it changed their eating habits or it changed their view of things, and that`s very gratifying. I think that a lot of the issues I dealt with in "Fast Food Nation" are now part of the public debate, and maybe that would have happened anyway, but I feel that was very gratifying experience.
LAMB: Our guest has been Eric Schlosser, and this is the cover of the book, and this is the way we`re showing it here, it`s really the right way except that if you are going to read it, I got to turn it this way; and the book is called "Reefer Madness." Thank you very much for joining us.
SCHLOSSER: Thank you.
Copyright National Cable Satellite Corporation 2003. Personal, noncommercial use of this transcript is permitted. No commercial, political or other use may be made of this transcript without the express permission of National Cable Satellite Corporation.