No, the city hasn't been unrolling them inside out or whatever, that would be embarrassing. Rather, the SFPD has been using condoms—and photos of condoms—to bust the working girls and guys who might be packing protection in their purses and pockets. According to the Bay Area Reporter last month, SFPD officers had been confiscating condoms from prostitution suspects to be used as evidence, despite a longstanding city policy to keep the prophylactics on the streets.
In response to the BAR's report, SFPD Chief Greg Suhr issued a memo to the department laying out the guidelines that have been in place ever since the SFPD agreed to abide by a Board of Supervisors resolution asking them to refrain from confiscating condoms from sex workers and urging the city attorneys not to use them as evidence in court. The idea there being that if a pocket full of condoms is evidence enough to convict someone of loitering for the purposes of prostitution, then sex workers will be afraid to keep condoms on hand.
According to at least one counselor at the St. James Infirmary, which provides health services to sex workers, there have been reports of sex workers who are now refusing to carry condoms for fear of arrest. Likewise clubs and massage parlors can't keep a stock of condoms because they could be used as evidence that sex work is being performed there.
According to the DA's office, however the city would never prosecute someone just for keeping a rack of Trojans in their wallet or purse. As assistant District Attorney Alex Bastian told the Examiner, most prostitution cases end up in noncriminal courts or early intervention programs.