In California cops, family members of cops, and related personnel (e.g. police union officials) can get a special insignia on their license. So when they're pulled over and are asked to present their license....
The FOP (Fraternal Order of Police). Also a thing in NY and NJ.
Fun facts... the insignia you put on your license or on your car also has a thing like a registration tab... The FOP says its "to show your ongoing support", everyone else with a room temperature IQ knows its "to show you're 'paid up' on your protection money for the year".
Oh, and some enterprising souls have created "counterfeit" FOP insignia and stickers and other regalia (or for those tabs), and sold them on eBay... only to have the weight of the police union's attorneys come down on them with cease and desists, etc.
It's probably for the better they're taken down. In California, and perhaps NY and NJ, too, the status shows up on your DMV records, so when a cop runs your license or your plate (and I presume plates are scanned and run automatically), they'll see the discrepancy immediately. So someone is just asking for trouble by using fake stickers, just like if they went around flashing a gang sign when they're not actually a member.
I think the FOP stickers are quite bad, but it's obviously not a "protection racket"; virtually nobody around here has them, and for a protection scheme to work there has to be some pressure to buy in.