Washington D.C./Nazi Germany--It's highly doubtful that Deborah Jeane Palfrey knew anything about the subterranean activities of some of her associates, but could some of them have been agent provocateurs or spies? Or, with the capabilities of current surveillance technology, would it even be necessary? Could elements within the government and the two major political parties run sexual blackmailing operations under the color of legitimate investigations? Could foreign agencies be using escort services for similar ends? There is smoke.
Time and technology have changed the West's social landscape in substantial respects since 1933-1945 , but some things never change. Generally speaking, only the technology changes. This is another age, and some political tactics never die because they're always going to be useful later-on, and sometimes they get results. Instant communication was once the sole domain of the State, but today, we all have cell phones, pagers, laptop computers, GPS locators, unparalleled surveillance capabilities, and toys like the Blackberry and the new iPhone. Things have changed in the "secret world" as well, though the full-extent of these technological developments are unknown.
On Salon Kitty:
Although brothels were officially outlawed by the Third Reich, the elite Nazi SS security police had been authorized by Himmler before the war to engage prostitutes in intelligence gathering. The infamous Salon Kitty in Berlin's Giebachstrasse  was the brainchild of the Deputy Reichsfuhrer SS, Reinhard Heydrich. The high-class brothel was set up to increase surveillance of foreign diplomats and visitors as well as to gather dossiers on the sexual indiscretions of Nazi party big-wigs and government guests [Ed.-my emphasis]. ... (pp. 241-242) (heretical.com, "Love, Sex and War," by John Costello From Chapter 12: 'Black Propaganda and Sexpionage')But Nazi Germany was hardly the precedent of this approach--it's ubiquitous throughout human history in various incarnations. The story of Samson and Delilah comes-to-mind. "Honey traps" or "plots" are nothing new, and the examples are common in the secret world. Interestingly, "Operation Kitty" was an overall failure for the Nazis controlling the enterprise. It didn't provide the huge-swath of intelligence that its creator--Reinhard Heydrich of the SS--had wanted, just a lot of compromising smut on NSDAP party officials and lower-rung functionaries.
This was most useful against other "Gauleiters" in the National Socialist hierarchy. Heydrich likely used some of this information, though the extent is unknown. Heydrich was assassinated by Czech partisans in 1943, and had been an architect of the "final solution." Interestingly, it was an "open secret" amongst NSDAP functionaries who frequented Giebachstrasse 11 that all conversations were being recorded!
The Salon Kitty was a German SD (Gestapo) establishment in which, according to German spy chief Walter Schellenberg, "...important visitors from other countries could be 'entertained' in a discreet atmosphere and...offered seductive feminine companionship. In such an atmosphere the most rigid diplomat might be induced to unbend and reveal useful information." Salon Kitty was set up in a large multi-storied apartment structure in a fashionable district of Berlin. Today, it's another kind of shop. It is described in The Schellenberg Memoirs (1956):
["]Double walls were built for the incorporation of microphones. These were connected by automatic transmission to tape recorders which would record every word spoken throughout the house. Three of our department's technical experts, bound by oath, were put in charge of his apparatus. The ostensible owner of the house [Kitty Schmidt] was provided with the necessary domestic and catering staff for the establishment to be able to offer the best service, food, and drink.["] (Spy Tech Agency.com, 12.02.1999)The brothel's madam--Kitty Schmidt--had no control over the arrangement, and was a virtual captive of the regime, just like everyone else under the rule of NSDAP. It's entirely possible we have an entire network of this sort in North America today, just with different contours. This leads us to the role of sexual blackmail in politics.
There have been quite few "retirements" at the Pentagon under the Bush administration, and under Donald Rumsfeld's Department of Defense, there was an intense struggle for control of the Pentagon's bureaucracy. Of course, it hasn't been isolated to the DoD under Bush and Cheney. One can safely assume that the officer class of the United States are amply represented in the D.C. Madam's phone records, especially considering the presence of several numbers originating from Annapolis, as well as most of the region surrounding Washington D.C. Hotels adjacent to the Pentagon are also present.
There is a possible analog here from the era of NSDAP. In 1938, Hitler was finalizing his consolidation of power, but there were a few loose ends in the officer corps of the Wehrmacht:
For Hitler, the moment had arrived to clean house, to replace the crusty old generals with younger men eager to serve their Führer and follow orders, regardless of the consequences. The two highest ranking officers in Germany at this time were hold-overs from the days of President Hindenburg; Field Marshal Werner [V]on Blomberg, the Commander in Chief of the German Armed Forces, and General Werner [V]on Fritsch, the Commander in Chief of the Army. These stiff-lipped men with their rigid codes of honor were about to be toppled by that most vile of all things from their point of view, personal scandals involving sex. (historyplace.com, "Hitler Becomes Army Commander," 2001)For Blomberg, it would involve the fact that the elder Field Marshal married a "former-prostitute," conveniently found in Weimar police records by Herman Goering, the founder of the SD. Himmler also got in on the game. Thanks to this information, on January 25th, Hitler could finally force Blomberg's resignation. Finally, no one would stand in-his-way, and there would be war. For General Werner Von Fritsch, things would be worse than Blomberg's predicament. Much worse.
He would be blackmailed by an obscure account in Gestapo files that he had had an homosexual encounter in an alley in 1935, the same year that Hitler purged the SA (Brown shirts) in the "Night of Long-knives." In short, Fritsch was felled by a "confidential informant." At about that same time, Stalin was using similar methods in purging the Central Committee of the Communist Party, killing his prey outright...because he could.
The irony was, the informant who "outed" Fritsch (the notorious Hans Schmidt--no relation to Kitty) had the wrong man. It was an officer named "Frisch." It didn't matter to the blackmailers and state pimps: Hitler moved swiftly to remove Fritsch anyway. Sixteen other generals would be removed through various methods, but the downing of Blomberg and Fritsch was that crucial beginning of total control over the German Army by NSDAP. Ironically, a number of these generals would be brought back as the war deteriorated...
"Love, Sex and War,":
Spy Tech Agency, December 2nd, 1999: