The Trouble is Not in Your Set - S6-E14
Trivia: Marion Ross guest stars as a woman who watches a lot of TV, but believes the characters are real people. In one scene she references the following show by naming people/characters: Oprah, Donahue, The Tonight Show with Johnny Carson, The Cosby Show, Dynasty, M.A.S.H., Dallas, Leave it to Beaver. The last character she names is "The Fonz", from Happy Days, which Ross also starred in as Mrs. Cunningham.
Answer: It's possible when Harry called the military, he implied that the book contained sensitive information, seeing as how many government and military officials were part of the client list.
I thought it was because he developed feelings for the madam and couldn't bring himself to turn her in.