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X-rated sales pay for cheap contraceptives

HANOI, Vietnam - In the lobby of what Vietnamese delicately call a "rest house," Phil Harvey sits listening intently as the manager details how many condoms he passes out each month and how much a room costs by the hour or night.

This nha nghi, on a narrow road across the Red River in the communist capital, is one of about 300 establishments that rent rooms for sex.

Harvey, 67, isn't the least bit squeamish around such talk. He runs Adam & Eve, one of America's biggest X-rated mail-order businesses, selling everything from movies to sex toys. He's also a survivor of U.S. government court battles aimed at shutting him down.

But in Vietnam and 10 other developing countries, Harvey donates a chunk of his millions for contraceptives that sell for pennies to the poor.

"I don't find this odd at all, but a lot of people do," he said. "I mean, what else would I do with the money? This is my life's work. I can't think of any more enjoyable way to make use of those profits."

Harvey is president of Washington-based DKT International, a nonprofit organization which he says gets about $2-million of his annual earnings from Adam & Eve's $70-million in sales.

For 15 years DKT has been distributing heavily discounted condoms, birth control pills and other contraceptives to people in developing countries. It's called social marketing - advertising and selling, rather than just giving away, the tools of family planning and disease prevention. Most contraceptives are sold at a loss, although programs in a couple of countries have broken even.

It was his plan from the beginning, Harvey says, and Adam & Eve just happened to be the means to make it possible.

After five years in India working for an aid agency in the 1960s, he decided to focus on ways of controlling population growth. He earned a master's degree in family planning administration at the University of North Carolina, and with Tim Black, another public health proponent, started a mail-order catalog selling condoms to Americans - a business that was illegal at the time.

"We would sit down at the end of the week and count the money and pay the bills and we said, "There seems to be a little money left over here and that's probably a profit,' " Harvey said. "Then we started thinking about, well, how can we run a business whose profits could be used to help support international family planning programs?"

Adam & Eve evolved from the condom catalog, giving Harvey and Black the money they needed 35 years ago to start Population Services International, which today calls itself the world's leading nonprofit social marketer. Black later started what is now Marie Stopes International, a London-based reproductive health nonprofit. Harvey founded DKT, naming it for the initials of D.K. Tyagi, an Indian pioneer in family planning.

But the Reagan administration hit him with obscenity charges over Adam & Eve's operations that entangled him in nearly eight years of legal battles. He eventually pleaded guilty to one charge, a technicality for violating Alabama postal regulations, and paid a $250,000 fine.

Now he says he's ready to do battle again.

DKT is suing the U.S. Agency for International Development and its administrator, accusing them of violating free speech by requiring AIDS nonprofit groups receiving U.S. government funding to sign a pledge opposing prostitution and sex trafficking.

Harvey and Larry Holzman, DKT's representative in Vietnam, say they refused to sign because they distribute condoms to prostitutes and "rest houses," and would send a mixed message if they took a stand against the sex industry.

Last year, money and donated condoms from USAID totaled about $4.4-million of DKT's $50-million budget. Harvey says he can manage fine without it, but is fighting for a principle. "The government has no business telling independent American organizations . . . what policies to have," he said.

Officials at USAID and the Justice Department declined to comment on the suit.

Last year, DKT sold about 390-million condoms.

Harvey says the key is selling contraceptives, rather than giving them away. People who buy products, no matter how inexpensive, are more likely to use them, and vendors have the incentive of a small profit, he says.

"After 35 years in this business," he said, "I've never seen a giveaway program that worked very well for very long."

[Last modified October 16, 2005, 01:33:15]