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FROM www.ap.org  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 told The Associated Press. "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 countries have broken even.

It was his plan from the very 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 that continued into the Clinton years and cost him about $3 million. He eventually pleaded guilty to one charge, a technicality for violating Alabama postal regulations, and paid a $250,000 fine. The deal required Harvey to drop a civil suit against the U.S. Justice Department. It ended the case and allowed his business to continue.

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 be sending 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 says.

USAID says the general U.S. policy opposes sex trafficking and prostitution as dehumanizing and degrading but does not prohibit AIDS services and other programs for prostitutes. U.S. legislation requires groups receiving federal HIV/AIDS funding to have a policy "explicitly opposing prostitution and sex trafficking."

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

Despite his legal battles, Harvey says his porn industry connection has never seriously hampered his charity work. Donors ranging from the Bill & Melinda Gates Foundation to the Dutch government continue to support DKT. Former President Jimmy Carter praised Harvey’s 1999 book, "Let Every Child Be Wanted," as outlining effective methods for poor couples to obtain contraceptives.

Although communist Vietnam has strong policies against pornography, with sentences of up to 15 years for possessing or disseminating "social evils" such as adult movies, its president has awarded a medal to Harvey’s operation for its work combating AIDS and promoting family planning and child welfare.

Harvey, a grandfather who wears a fedora and blue button-down shirt, says the combination of porn and health promotion is less of a problem than some might think. "Besides, for me, it’s a fact of life. I’m not going to give up my business just because it’s controversial. I’m very proud of the business."

Last year, DKT sold about 390 million condoms. Factories, mostly Asian, churn out the latex, and DKT also receives condom donations, including from USAID.

In Vietnam, where DKT has operated since 1993, Harvey recently visited a pharmacy where DKT’s red "OK" condom boxes were showcased in the window and on shelves. The pharmacist has other brands but says OK is the favorite with three packets selling for about 6 cents. DKT is also experimenting with colored and flavored condoms, including durian, a Southeast Asian fruit famous for its sweet pulp and foul-smelling rind.

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 says, "I’ve never seen a giveaway program that worked very well for very long."
 

TODAY’S STATES AND SOME PORNO FOLK WHO CALL THEM HOME

CLOCKWISE FROM TOP: RON JEREMY, ASIA CARRERA, SAVANNAH SAMSON, GLORIA LEONARD, ARIANA JOLLEE, HEATHER HUNTER AND KERI SABLE

CLOCKWISE FROM TOP RIGHT: TRACI LORDS, SHARON KANE, JOHN HOLMES, MARY CAREY AND TRICIA DEVEREAUX