The madam, her girls and a city in fear
Guardian Staff
As the woman who ran a Washington call-girl ring fights prosecution, her lethal weapon is the names of 10,000 clients, reports <b>Paul Harris</b>.
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the Guardian
Deborah Jeane Palfrey first knew something was wrong on a trip to Germany. She suddenly found her bank card was not working any more. Then, back in her hotel room, a journalist from a gossip website called her.

He had been leaked a court document detailing Palfrey's alleged sex empire in Washington DC, serving the rich and powerful with a ring of beautiful, university-educated call girls. Her assets had been seized by the government. As Palfrey struggled to understand what was happening, the journalist wanted to know if she was ashamed of herself.

The 'DC Madam' scandal had just been born. It is a story that has gripped Washington's usually staid political classes. Palfrey stands accused of running a prostitution ring for more than 13 years. It is a charge she denies, maintaining her girls dealt out only massages and erotic role-play. She made them all sign agreements not to engage in illegal behaviour. Palfrey has vowed to identify the men who used her services to prove her story, and she has years of phone records to help her. All across the Washington area there are now thousands of nervous, powerful - often married - men.

But the DC Madam story is much more than a titillating guessing game. The scale of her operation exposed a dark underside of Washington life. Often decried as a dull government town, it has shown how sex and prostitution are key to how Washington works. From Nasa to the Pentagon to the State Department, officials of all levels were using Palfrey's girls. The saga has also revealed a deep hypocrisy, showing how powerful men talk publicly of their 'family values' and then have escorts visit them in hotel rooms. As Rob Capriccioso, editor of Big Head DC, a Washington news and gossip website, says: 'Tawdry sex is everywhere in Washington.'

It is not a scandal that is going to go away. Last Sunday, as President Bush sat in St John's Church in Lafayette Square for the morning service, the Rev Luis Leon remarked on Palfrey's case in his sermon. 'Here in Washington DC a lot of people get in trouble on this one,' Leon said. When the President's priest is talking about a sex scandal, you know trouble is brewing in Washington.

Palfrey's clients came from all walks of life. There is a Bush administration economist, a prominent company chief executive, Nasa officials, men who work at the World Bank and the International Monetary Fund, lobbyists for Republicans and Democrats, the commander of an air force squadron and at least five other military officers.

So far the identities - of perhaps up to 10,000 men - have remained secret. Only two have been exposed. One was Harlan Ullman, a military expert and the author of the 'shock and awe' strategy used in Iraq. The other was State Department official Randall Tobias, who, ironically, is a leading advocate of fighting prostitution abroad. He has now resigned.

The one thing all the men have in common was that they once rang Pamela Martin and Associates, the cover name for Palfrey's operation, which advertised, like hundreds of other 'massage' services in Washington, online or in local newspapers.

Calls were rerouted to Palfrey's home in California - specifically to a phone in her laundry room, where she sometimes battled the sound of her washing machine as she took down details of her client's desires. She ran a network of about 130 girls. One was a legal secretary, another a University of Maryland academic and another an instructor at a naval academy. They charged $300 an hour.

It was lucrative, but not a goldmine.Over 13 years she earned $2m. That's enough to get very comfortable with, but hardly a fortune. The surprising truth of the DC Madam is how ordinary her operation was. Compared to the high-octane glamour of Hollywood's famous madam Heidi Fleiss, or New York's blueblood procuress Sydney Biddle Barrows, Palfrey was very Washington: subdued, respectable and modest.

That modesty is displayed during her court appearances, where she has eschewed fashionable clothes, wearing navy blue outfits and subdued makeup. 'She looks like she should be wearing little white gloves. She's a soft-spoken woman. I curse more than her,' said Lee Mirabel, a radio host who acts as her spokeswoman.

Palfrey would send out weekly messages to her girls, offering advice like a corporate newsletter. 'Nail colour is to match lipstick colour,' she suggested. She also said girls should use 'fat cream for the thighs'. But the missives also acknowledged the legally shaky side of the business. She warned of an investigation by a Virginia vice squad officer, advising girls to burn or shred evidence of their client meetings within 24 hours. 'Destroy the data immediately!!!!!!!', she demanded.

Palfrey had good reason to be worried. She had been caught before. She was arrested in California in 1990 for running a smaller escort service. She ended up disappearing during her trial, leaving a long note with her lawyer saying the idea of prison was 'an absurd and unthinkable horror'. But she was caught on the Canadian border the next year and served 18 months in jail. Not that it deterred her. She started Pamela Martin and Associates - where she was known as 'Miz Julia' - in 1993, shortly after she was released.

Her luck held out longer the second time around. She ran her business without incident until 2004, when - unknown to her - a tip -off to the tax authorities alerted them to her activities. It is believed to have come from someone angered by discovering his girlfriend was one of Palfrey's escorts.

For two years detectives investigated the business, finally descending on it in October last year. But investigators combing through her home did not notice a huge pile of phone records. In total they weighed 21kg and recorded more than quarter of a million phone calls dating from the Clinton years through to the current Bush administration. The records were in Palfrey's hands - the police had been looking for 'a little black book', unaware that Palfrey did not have one.

Now she is using those lists to show the DC establishment who used her service that she will not go quietly. 'She has always realised the depth and breadth behind the names on her lists, and she has effectively used her own power in order to try to come out on top,' says Capriccioso.

One of Palfrey's missives is more telling than beauty tips. 'Congress is back in session,' she enthused to her girls. 'This always helps to boost business!'

For the truth exposed by the DC Madam - and largely ignored by the American press so far - has been how ingrained the sex industry is in Washington. Escort services operate openly. In the metro area of the city an online search reveals more than 8,000 adverts for escort services. 'That's more escort services than there are McDonald's,' says Mirabel.

In many ways Washington represents a perfect market for a booming sex industry. Being a government-dominated town, it is heavily male - many rich, powerful and middle-aged. It is home to major international organisations, such as the World Bank, that are full of well-paid workers away from their home countries, where prostitution might be more socially acceptable. Or, like many visiting diplomats or businessmen, they might simply be lonely.

Washington also plays host to the Pentagon and the huge military support structure that surrounds it. Many of the calls on Palfrey's list come from Pentagon City numbers. The five-star Ritz-Carlton (one of the most common numbers on Palfrey's lists) is nearby.

'It is going on unabated. There are brothels and services of every type,' says Bill Keisling, a crime writer and friend of Palfrey. Palfrey's attempts to publicise those who used her services has led many to accuse her of blackmail. But the real story of victimhood is not the men who may be exposed or already have been. The real victim here is Brandy Britton, one of Palfrey's girls who was arrested by local police just as the investigation reached full swing. Britton, a former lecturer in sociology and biology, was also a call girl, entertaining clients in her suburban home. Her arrest threw her into the full glare of the media. She could not take the exposure and the mother-of-two hanged herself in January. 'The press ruined her,' says Keisling.

Others who have had their private lives exposed in the Washington media know how bad it can feel. 'One day you're just living your life, then suddenly it's everyone's business,' says Jessica Cutler, a former junior Senate aide whose blog about her numerous affairs in Washington became a scandal when her identity was revealed. She was fired.

But then the DC Madam scandal is, at its heart, about hypocrisy. It is about the Washington movers and shakers sweating out the prospect of Palfrey's court case. It is about the public face of a city whose political denizens exhort others to standards they clearly fail to meet themselves. 'We think of ourselves as faithful to our Puritan founders, but the US regularly loses its innocence with scandals like this,' says Bruce Gronbeck, an expert on political scandal at the University of Iowa.

Palfrey is not giving up. She recently turned over about 20 per cent of her client list to ABC News. She claims she did it to enlist its help in identifying her clients so they could exonerate her; it is a disingenuous argument. ABC's main investigative reporter, Brian Ross, concluded the names they found were not newsworthy enough to publish - yet it still devoted a prime-time show to highlighting the case and its exclusive interview with Palfrey.

Palfrey has barely begun. She will find other ways to get the names into the public domain. Many won't blame her. 'I never named names, but if she's getting in trouble, so should her clients,' says Cutler.

Palfrey has been selling interviews on eBay. She has also handed over a whole new section of her list to a group of Washington investigative writers and there is the coming court case in which she will be defended by Preston Burton, the lawyer who once represented Monica Lewinsky. That seems fitting. 'She's decided to fight this until the end,' says Mirabel.

The story of the DC Madam may have only just begun.

Sin city

A wave of scandals is marring President George W Bush's second term:

· Paul Wolfowitz

The head of the World Bank, a Bush favourite, is fighting for his job over allegations that he ordered promotion and a pay rise for girlfriend Shaha Riza.

· Alberto Gonzales

The US Attorney General is accused of setting up the sacking of eight US attorneys who were 'not sympathetic enough' to the White House.

· George Tenet

The ex-CIA head says Vice-President Dick Cheney pressed ahead with the Iraq invasion despite CIA warnings.