In my novel 7 Grams of Lead, the clandestine operations division of the Department of Commerce runs international chain of whorehouses as a means of collecting intelligence. Some readers have thought it over the top. If anything, it understates reality.
The reality: In 1959, the Central Intelligence Agency indeed got into the prostitution business, opening whorehouses in New York City, San Francisco and Stinson Beach, California, in each case with the blessing and cooperation of the local police. The Federal Bureau of Narcotics took a piece of the action, too, in the role of drug dealer.
The San Francisco branch, a Telegraph Hill duplex with sweeping waterfront views, was located at 225 Chestnut, a short stumble away from North Beach’s saloon district. The prostitutes, many of whom were placed on government payroll, duped johns into taking acid. Researchers from Operation Midnight Climax (yes, really) sat on the other side of two-way mirrors in hope of learning to use LSD to induce subjects to reveal secrets or do the bidding of the United States government.
The operation was run by a colorful narcotics agent turned "CIA consultant" named George Hunter White, of whom a colleague said, “He made that fruitcake Hoover look like Nancy Drew."
White's empire lasted until 1965, when Congress got wind of it and played its customary role, from the Agency’s perspective, of ants at a picnic.
For more information, read The Search for the Manchurian Candidate by John Marks.