Blackmail photo
Why did they think they could use it? All it showed was a man having sex from behind, probably not in good quality either, and definetely in black and white. It didn't show the officer's face, so a positive ID would be impossible to make out, or what? Peggy would not be considered a reliable witness, since she was willing to do just about anything for money or even cupcakes.
If they tried to use it, couldn't the officer just say that they had staged the situation and have the case dismissed?