Genting abandons gambling petition drive
After spending nearly $1 million to gear up for a petition campaign to put a casino amendment on the 2014 ballot, the casino giant withdraws its plans — for now.
BY MARY ELLEN KLAS
HERALD/TIMES TALLAHASSEE BUREAU
TALLAHASSEE — In a major shift in strategy, the Genting Group, the Malaysian-based casino giant, told legislative leaders this week that it will stop a petition drive to get a casino amendment on the 2014 ballot, leaving it to lawmakers to decide the future of gambling in Florida.
“We are not going forward with a petition drive effort and there have not been any petitions gathered,’’ said Brian Ballard, a lobbyist for Genting, after meeting with House Speaker Will Weatherford and Senate President Don Gaetz. “The approach the Legislature is taking with this — a thoughtful analysis — we think makes absolute sense and we want to be a constructive player in it.” Read more
Sheldon Adelson Spent Far More On Campaign Than Previously Known
Posted: 12/03/2012 12:00 am EST Updated: 12/03/2012 12:35 am EST
WASHINGTON — Casino magnate Sheldon Adelson vowed to spend as much as $100 million to defeat President Barack Obama and help the GOP take control of Congress. According to two GOP fundraisers with close ties to the Las Vegas billionaire, he made good on that promise — and then some. Adelson ultimately upped the ante, spending closer to a previously unreported $150 million, the fundraisers said.
Adelson, a fierce critic of Obama’s foreign and domestic policies, has said that his humongous spending was spurred chiefly by his fear that a second Obama term would bring “vilification of people that were against him.” As that second term begins, Adelson’s international casino empire faces a rough road, with two federal criminal investigations into his business.
This coming week, Adelson plans to visit Washington, according to three separate GOP sources familiar with his travel schedule. While here, he’s arranged Hill meetings with at least one House GOP leader in which he is expected to discuss key issues, including possible changes to the Foreign Corrupt Practices Act, the anti-bribery law that undergirds one federal probe into his casino network, according to a Republican attorney with knowledge of his plans.
During the election, Adelson told Politico that the Justice Department investigation, and the way he felt treated by prosecutors, was a primary motivation for his investment in Republican presidential nominee Mitt Romney and other GOP candidates. He put his money where his mouth was. The two GOP fundraisers, both with strong ties to Adelson, said that the casino mogul dished out close to $150 million, including between $30 million and $40 million to the Karl Rove-founded Crossroads GPS and at least $15 million to grassroots efforts with financial links to Charles and David Koch. Among other major beneficiaries of Adelson’s largess were the U.S. Chamber of Commerce, which received almost $5 million from Adelson, and the Republican Jewish Coalition, which got the bulk of its $6.5 million budget from him, the fundraisers said.
All of these are non-profit groups, which — unlike the super PACs that raked in $54 million in funds from Adelson and his wife — are not currently required to disclose their donors. Adelson’s public spending spree, larger than any other donor’s in the last election, was made possible by two high court rulings in early 2010 that allowed corporations, unions and individuals to write unlimited checks to outside groups for political ads and other activities backing candidates
The two fundraisers who provided information to The Huffington Post represented separate groups that each received seven-figure checks this year from Adelson. The fundraisers learned details of Adelson’s spending plans about a month prior to the election: one heard of them in a talk with the casino owner himself, while the other didn’t indicate if his information came from Adelson or a top aide to the billionaire. Both requested anonymity to protect their ties to Adelson and because they were not authorized to speak publicly about his giving.
Adelson’s hefty support for Rove’s GPS made sense, said a third fundraiser who knows both men, because of their long-standing links. Adelson forged good ties with Rove after he served as deputy chief of staff to President George W. Bush and this year they bonded further. Rove spent much of the last night of the Republican National Convention hanging out in a skybox suite with Adelson and other politicos and friends, and Rove also provided the casino mogul occasional advice on potential donations — at least once undercutting another group seeking Adelson funding, said the two GOP fundraisers.
Rove, who also provided advice in 2008 to the Adelson-backed dark money group Freedom’s Watch, was just one of several GOP politicos with shadow party links that Adelson schmoozed and brainstormed with in Tampa. Long known as a hands-on donor who likes to immerse himself in details, Adelson had a crowded convention schedule. For instance, he spent time one afternoon meeting with leaders of several groups that he’d either already helped, or was considering writing more big checks to for their electoral drives.
Among the political heavies Adelson met with that afternoon were Sean Noble, a leading operative for the Koch brothers, and Carl Forti, a key political strategist for both Crossroads GPS and its affiliate American Crossroads. Forti is also a strategist for pro-Romney super PAC Restore Our Future, which received $20 million from Adelson and his wife Miriam, an Israeli-born doctor.
Earlier in the year, Adelson indicated at different times that he planned to spend about $100 million or “as much as it takes” to defeat Obama and help Republicans in Congressional races. Adelson’s personal wealth has been pegged at $20.5 billion by Forbes, making him one of the world’s richest men and enabling him to open his checkbook wide without worrying much about his bottom line.
Adelson’s largess appeared to have an impact on Romney’s campaign strategy. After Adelson publicly suggested that Romney sometimes waffled in his stances and wasn’t as ideologically consistent as his original pick, former House Speaker Newt Gingrich, he and Romney met in late May in Las Vegas. Shortly afterwards, the casino owner’s first $10 million donation to Romney’s allied super PAC arrived.
Not long after their meeting, Romney restated his support for one of Adelson’s top priorities — his fervent backing of Israel’s conservative government and his opposition to a two-state solution to the Israeli-Palestinian conflict. Romney’s first foreign trip after his meeting with Adelson included a late July visit to Israel, which included a Jerusalem fundraiser that Adelson famously attended.
Now after what was largely a disappointing election for Adelson, his Las Vegas Sands casino empire could be facing heightened legal and political headaches. His sprawling operations are still mired in two wide-ranging federal criminal probes. Neither probe is said to be focused on Adelson’s conduct.
The Sands did not return several phone calls seeking comment for this piece.
In one inquiry, federal officials are looking into potential money laundering by two shady high rollers at his Las Vegas casinos. Settlement talks with Justice officials were under way in late October, according to the Wall Street Journal.
The money laundering investigation, led by the U.S. attorney for Los Angeles, is probing whether the casino broke the law by failing to report to the government millions of dollars of potentially laundered funds that two gamblers transferred to its casinos.
One of the two gamblers, Ausaf Umar Siddiqui, is being probed about over $100 million of his transactions through the casinos. Separately, he was arrested in 2009 and pleaded guilty to accepting illegal kickbacks in his job as an executive with Fry’s Electronics in California. He is now serving a six-year jail term.
The other big gambler in the probe is Zhenil Ye Gon, a Chinese-born Mexican-based businessman, who reportedly transferred $85 million to Sands casinos several years ago. Ye Gon was indicted in 2007 for dealing in illegal drugs, but the charges were dismissed in 2009.
Meanwhile, another inquiry by Justice and the SEC has been under way for about two years. It involves allegations that Adelson’s lucrative casinos on the Chinese island of Macau may have violated the Foreign Corrupt Practices Act by paying bribes to Chinese officials to expand its operations there. The lion’s share of Sands’ corporate revenues now come from Macau, the only place in China where casino gambling is legal, and a Singapore casino.
Among the payments that Justice has been probing are $700,000 that went to a local attorney, Leonel Alves, who was hired by the Sands Chinese subsidiary while he was a government legislator in Macau. The Justice probe apparently grew out of a wrongful termination lawsuit by Steven Jacobs, the former president of the Sands operation in Macau who has been cooperating with Justice.
Jacobs’ suit alleged that he was fired after numerous clashes with Adelson over “Adelson’s illegal demands.” Adelson has flatly rejected Jacobs’ allegations and has said that “none of what he says is true and he can’t prove it.”
A Sands spokesman has said repeatedly that the company has been cooperating with Justice and has done nothing wrong.
Ryan Grim contributed reporting
Nov. 28, 2012, 1:00 p.m. EST
Wall Street Analysts to Provide Candid Insights at Florida Gaming Congress, February 25-26, 2013
HOLLYWOOD, FL, Nov 28, 2012 (MARKETWIRE via COMTEX) — Some of Wall Street’s premier analysts will convene at the Florida Gaming Congress, February 25-26, 2013, at the Seminole Hard Rock Hotel & Casino in Hollywood, FL, for a no-holds-barred discussion on the future of gaming in Florida.
Front and center in their discussion will be the feasibility of adding destination gaming resorts to an already multibillion-dollar gambling industry in Florida. Casino and pari-mutuel executives, legislators and regulators are all focusing on gaming expansion. How much more casino gambling can Florida accommodate? Do large-scale gaming resorts make sense in a state with a rich tourism infrastructure? The analysts and investment bankers will share their outlook for growth, discuss the pros and cons of destination gaming resorts, analyze the competitive balance gaming properties, opine on the investment climate… and answer your questions.
YOU CAN BET ON IT
Written By Erik Bojnansky – BT Senior Writer
TUESDAY, 06 NOVEMBER 2012 00:26
WITH BILLIONS OF DOLLARS AT STAKE, GENTING AND OTHER CASINO OPERATORS WILL NEVER EVER GIVE UP
More than a year ago, executives from the Genting Group, a Malaysian-based multinational company headed by K.T. Lim that operates casinos in five countries, announced their plans to build a gigantic, $3 billion resort casino complex where the Miami Herald building now stands.
Designed by Arquitectonica, Resorts World Miami was to include 5200 hotel rooms, more than 1000 condominium units, 50-plus restaurants and bars, a rooftop lagoon, a sandy beach, and 700,000 square feet of convention space, and gambling areas — large enough to hold up to 8500 slot machines and other Las Vegas-style games.
Resorts World Miami is now in limbo, but it’s far from dead. In fact, Genting has already spent at least $503 million on the project, and may spend millions more even before major construction commences. Read more
State’s hand may be forced on gambling regulations
Revenue tops $2 billion
Timeline of gambling
By JEROME R. STOCKFISCH | The Tampa Tribune
Published: November 18, 2012
World-class casinos. Strip-mall storefronts billed as “Internet cafés.” Slot machines and poker rooms at local racetracks, where traditionalists still bet on the dogs and ponies. Barrel racing. Sixty state-sanctioned scratch-off games.
All these games of chance are either in place or proposed in a state that still has Statute 849.08 on the books:
“Whoever plays or engages in any game at cards, keno, roulette, faro or other game of chance, at any place, by any device whatever, for money or other thing of value, shall be guilty of a misdemeanor of the second degree …”
Florida’s gaming history has been a hodgepodge of legislative exceptions to this statute: citizen initiatives, tribal deals, legal ambiguity and other narrow decisions, many of which have had unintended consequences.
Gaming in Florida is a $1.5 billion industry.
But there are new sheriffs in town. And the incoming leaders of Florida’s Legislature are looking to get a firmer handle on gambling in Florida.
“I believe that we need to take a comprehensive look at gaming in our state, and arrive at some policy that is fair and equitable and realistic,” said state Senate President-designate Don Gaetz, a Republican from Niceville.
“We have to get the parties around the table — and that includes the opponents of the expansion of gambling. I want to hear from the people of Florida.”
Gaetz’s counterpart in the House, incoming Speaker Will Weatherford, concurred.
“There needs to be clarity and direction as to where Florida is going with gaming,” said Weatherford, a Republican from Wesley Chapel. “This does not mean there will be an expansion or a contraction of gaming in Florida, but one way or another, the issue has to be addressed.”
Several developments are focusing attention on the issue.
* * * * *
Groups from Las Vegas and Asia have proposed mega-casinos known as “destination resorts” for South Florida.
Genting, a worldwide resort and casino operator based in Malaysia, has spent some $500 million to acquire 30 acres overlooking Biscayne Bay and is seeking to build a $3.8 billion Resorts World Miami.
It would include a hotel, convention center, restaurants, retail, residential and commercial facilities and, of course, a Las Vegas-style casino.
Genting traditionally would need legislative approval for such a project. A bill that would have allowed for three resorts in Miami-Dade and Broward counties stalled in spring’s legislative session. But there is a path to gaming that skirts Tallahassee.
A political action committee, New Jobs and Revenue for Florida, has popped up with a stated mission of introducing a statewide constitutional amendment on gaming. Voters previously have passed initiatives expanding gambling, most recently allowing slot machines at some pari-mutuel sites in 2004 and endorsing the state lottery in 1986.
The well-funded New Jobs group, backed by Genting, has spent $600,000 on lawyers, pollsters and consultants with expertise in constitutional amendments, but it has been coy about its intentions.
“The committee was designed to take a hard look at what the options would be to expand entertainment options,” said spokesman Brian Hughes, who formerly worked for Gov. Rick Scott. “That look continues and, ultimately, where it goes is still to be determined.”
Meanwhile, the state’s horse tracks, dog tracks and jai-alai frontons have made no secret of their wish to get in on expanded gambling, including Tampa Bay Downs and Derby Lane.
The 2004 constitutional amendment on slot machines limited the activity to existing pari-mutuel sites in Miami-Dade and Broward counties. Subsequent legislation allowed slots at another racetrack in South Florida, and local tracks wouldn’t mind getting in on the action.
“We would love to have the opportunity to have new products of some sort,” said Richard Winning, vice president at the Derby Lane dog track and poker room in St. Petersburg.
“We look forward to the Legislature opening up some discussion on gaming over the next couple of years. I hope we can come up with something. Our customers would like a new product, and we certainly would like to offer it to them, whether it’s slots or anything else we can do out there.”
* * * * *
The slot machine issue is linked to another key component of Florida gambling: an agreement called a compact with the Seminole Tribe regarding what can be offered at tribal gaming centers, including the Seminole Hard Rock Hotel & Casino in Tampa.
That deal was approved after years of delicate negotiations. In it, the state agreed to restrict slot machines to the South Florida counties while allowing the tribe to conduct the more elite Class III, or full Las Vegas-style games.
In return for the exclusivity, the Seminoles agreed to pay the state $1 billion over the first five years of the compact.
A spokesman for the tribe declined comment. But portions of the Seminole compact are scheduled to expire in 2015. The revenue-hungry state stands to lose the tribe’s payment if it alters the agreement or expands gambling elsewhere in the state.
Meanwhile, efforts to regulate so-called Internet cafes — storefronts packed with computers on which gamers work sweepstakes-style screens that resemble traditional slot machines — also stalled in the Legislature.
That has led many local governments to ban the cafes, including Hillsborough, Polk, Pasco and Pinellas counties and the City of Tampa.
“Internet cafes are operating in the shadows,” said Dan Gelber, a former House and Senate Democratic leader serving as a South Florida representative for the No Casinos political action committee.
“There’s arguments that they are both legal and illegal. They’re operating in a never-never land. The Legislature has to decide whether to regulate them or to eliminate them.”
* * * * *
Gelber’s group opposes all forms of gambling in Florida, including the push for the South Florida mega-casinos.
“I think the next chapter is going to be very important because the destination resorts have the potential to redefine the state’s economy in a very negative way,” Gelber said.
“Everywhere you’ve seen these destination resorts, they’ve tended to define the economy to the detriment of other features. I think it would be a horrible idea for Florida to ride that horse. It would change who we are, it would change how we present to the world and it would be a major change in our quality of life.”
Gelber said legislative “inertia” has ruled the day on gambling issues. But Gaetz, the Senate leader, said the Legislature can’t continue to ignore the issue, particularly with portions of the Seminole deal expiring.
“Whether I want to or not, whether Speaker Weatherford wants to or not, we will have to deal with renegotiating the Seminole compact on our watch,” said Gaetz, a consistent opponent of expanded gaming.
“Even if Will Weatherford and I had no taste for the issue, we’re being overtaken by events.
“What we don’t have is a state policy that addresses gaming. We’ve allowed the expansion of gaming by fits and starts over the years, and the result is that there is always some inequity that is chafing away at someone.”
He would like to see a summit on the issue.
“I want to hear from the people of Florida on gaming,” Gaetz said.
“I want to hear from economists who don’t have a dog in the fight. Once you take certain steps in policy related to gambling, it’s hard to walk it back. My view is we need to be very careful, we need to be very thoughtful.”
Genting Interests vs Historic Preservation of the Miami Herald Building: Towards the Creation of a Broader Context for Our Future
Posted on Sat, Oct. 20, 2012
Bid to make Miami Herald building historic seeks to change public views
BY ANDRES VIGLUCCI
For just a few months shy of 50 years, The Miami Herald’s hulking, block-long headquarters has occupied — some critics say marred — a prime spot on Biscayne Bay, a muscular symbol in marble, concrete, glass and steel of the newspaper’s and its leaders’ once-outsized clout in local affairs.
But is that commanding presence, the distinct tropical-meets-Modernist architecture, and the institution’s role in shaping Miami’s history significant enough to save the building from the wrecking ball as the newspaper itself decamps for suburban Doral?
That’s the ticklish question that will confront the city’s historic preservation board on Monday, when it considers an application by a leading preservation group, Dade Heritage Trust, to have The Herald building declared historic. Read more
A gamble down on the boardwalk
David Cay Johnston
SEP 14, 2012 15:34 UTC
GAMBLING | STATE BUDGETS | TAXES
ATLANTIC CITY–Americans who think more legalized gambling can ease their state and local tax burdens should take a close look at the travails of this struggling New Jersey seaside resort.
Because betting is now legal in neighboring states, gambling here is way down. The casino hotels have slashed their workforces, cut real wages and, citing falling property values, received huge property tax refunds — with more refunds likely.
The city has sold $103 million of bonds to finance casino property tax refunds, bonds that with interest will cost the average homeowner more than $2,100 over the next two decades, Michael Stinson, the city finance director, said.
The city is about to sell another $35 million in bonds, while the Press of Atlantic City reports that $40 million more may have to be borrowed next year. If all that happens the average homeowner eventually may be out more than $3,600 in added taxes.
That may well understate the added costs to local taxpayers in the next few years as the gambling business is likely to shrink even more, as Mayor Lorenzo Langford told me. Each time another casino opens in nearby states, “the Atlantic City market should expect to see some lost business,” Mayor Langford said, and “one or more of the weaker casinos may close.” Read more
STEVEN MALANGA, From Summer 2012 City Journal
The State Gambling Addiction
Politicians are bleeding problem gamblers to fix their budgets—and it isn’t working.
In January, New York governor Andrew Cuomo announced a bold plan to bring a $4 billion casino and conference center to Queens. But the plan fell apart within months, thanks to the reluctance of the state’s prospective partner, the Malaysian gambling company Genting, to undertake the massive investment without a guarantee that it would have the exclusive right to operate casinos in New York City.
New York is one of several states that don’t want to be left behind as their neighbors institute more and more varieties of gambling. At least 12 states, facing downturn-depleted coffers, have already expanded gambling efforts over the last three years—including Massachusetts, which became the 16th state to sanction casinos. But this approach is utterly misguided, since gambling has often disappointed as a fiscal tool and as an economic-development strategy. As legal gambling has spread, competition for limited dollars has intensified, and the new gambling enterprises seem merely to be siphoning money from elsewhere in the economy instead of generating new economic activity. “This is not an industry that creates wealth,” says Les Bernal, head of the Stop Predatory Gambling Foundation. “It’s an industry that transfers wealth.” And that’s before taking into account the documented social costs, including the disturbing fact that a significant part of gambling revenues comes from problem gamblers.
Paul Ryan donations from a now-convicted Wis. businessman could draw fire
By Jerry Markon, Published: August 12
Democrats have wasted little time blasting Republican vice presidential pick Paul Ryan over his federal budget plan, but a more obscure part of his record could also draw attention: his relationship with a convicted Wisconsin businessman.
Ryan accepted nearly $60,000 in contributions from businessman Dennis Troha and his family, records show. Troha was later indicted on campaign finance charges over an Indian casino he sought to open. During the casino application process, Troha said, the Republican congressman called federal regulators at his request.
Ryan (Wis.) also supported a bill in Congress that benefited Troha and his trucking company, legislation that drew the interest of federal prosecutors because of the contributions Ryan and other congressmen had accepted from Troha and his family.
Ryan was not found to have violated any laws, nor was he a target or key figure in the federal investigation, people familiar with the inquiry said. He was among more than 20 politicians of both parties who benefited from Troha’s largess. Troha was convicted of funneling illegal donations to other politicians, not Ryan, and Ryan donated Troha’s contributions to youth programs when the businessman was indicted.
When a Troha associate pleaded guilty in the campaign finance scheme, the only political figure specifically named in court documents for receiving contributions from the associate was Ryan.
The Romney campaign looked into the Troha matter “and concluded it was a complete non-issue,” a campaign official said on the condition of anonymity because he was not an authorized spokesman.
In an interview Saturday, Troha said Ryan “is a very bright, energetic and talented young man. My family was blessed financially, and I thought, ‘My goodness, this is someone, if he wins, we should support him.’ ”
Between 1999 and 2005, Troha and his family members contributed $58,102 to Ryan’s campaigns, according to campaign finance records. At the time, Troha was seeking support for his proposal to open an $808 million Indian casino in Ryan’s district.
Although state officials had final approval, Ryan agreed to call the federal Bureau of Indian Affairs, which was reviewing environmental impact studies. “He stated that his constituents are in favor of the application,” according to an e-mail written by a bureau staffer and obtained by the Milwaukee Journal Sentinel, which wrote extensively about the Ryan-Troha relationship.
In a 2006 interview with the newspaper, Ryan described the call as a routine inquiry on behalf of a constituent and said he was “neutral” on the casino project. But Troha said Ryan “made it very clear to me” that he opposed the project and felt it was “not appropriate” for the district. “I just asked him to make contact to see where things stood,” he said.
A spokeswoman for Ryan’s congressional office, Smythe Anderson, said Saturday that Ryan, “just as he has done for tens of thousands of constituents in southern Wisconsin, placed an inquiry with a federal agency. It is a simple example of casework, and there was never any allegation of impropriety.”
In March 2007, a federal grand jury indicted Troha on charges that he funneled contributions in violation of campaign limits through family members to Wisconsin’s Democratic governor, Jim Doyle, in an effort to win approval for the casino. Ryan immediately announced that he would donate all contributions from Troha and his family to the Kenosha Boys and Girls Club. Troha pleaded guilty to reduced misdemeanor charges four months later and was sentenced to probation.
While Troha was under indictment, the Journal Sentinel revealed that Congress had two years earlier passed a measure that allowed his trucking firm, JHT, to haul more trucks on each route. The paper obtained bank records showing that JHT had paid a consulting firm owned by Troha $107,238 and that such fees would continue until 2010 because Congress had passed the legislation.
The paper reported that Ryan had been one of several congressmen pushing for the legislation and had signed a letter in support.
Troha, in the interview, said the bill benefited the entire hauling industry, and his former attorney, Franklyn Gimbel, said Ryan’s help was appropriate. “I’d like to think that every person can call their congressman and say, ‘I’ve got a bill that I’d like your help with,’ and if it doesn’t have any illegalities or immoralities connected with it, of course they’re going to help a constituent,” Gimbel said.
Ryan said he supported the measure because he thought it was good public policy and told the Milwaukee paper that he was unaware that Troha stood to gain financially, calling it “extremely inappropriate.”
The then-U.S. attorney in Milwaukee, Steven Biskupic, issued a statement at the time saying federal investigators were looking into the legislation, along with donations from Troha and his family to Ryan and two other congressmen. Biskupic declined to comment Saturday.
It is unclear how far that part of the federal probe progressed, but people familiar with it said there was no indication Ryan was aware that he was receiving problematic contributions.
When John W. Erickson, a top Troha associate, pleaded guilty to campaign finance violations in September 2007, court documents said he, Troha and other alleged conspirators had directed illegal contributions to more than 20 politicians. Troha and others had “identified public officials who supported Indian gaming and/or the relaxation of restrictions on interstate trucking,” prosecutors wrote.
The only politician identified by name in the documents as having received contributions from Erickson was Ryan.
Alice Crites contributed to this report. Washington Post Aug 13, 2012
August 6, 2012, 12:56 AM242 Comments NY Times
Embracing Sheldon Adelson
By THOMAS B. EDSALL
There are two things that set Mitt Romney’s presidential campaign apart: his caution and his secretiveness.
The presumptive Republican nominee refuses to release his pre-2010 tax returns, will not identify his major fundraisers and bundlers and wiped all computer records of staff emails clean at the end of his term as governor of Massachusetts in 2006.
Romney’s rationale is that material like this could be used by the Obama campaign to discredit him. In an interview published a few weeks ago, Romney told National Review:
In the political environment that exists today, the opposition research of the Obama campaign is looking for anything they can use to distract from the failure of the president to reignite our economy. And I’m simply not enthusiastic about giving them hundreds or thousands of more pages to pick through, distort, and lie about.
So what was this ever-so-guarded, moralistic (“I want to clean up the moral pollution on TV and the Internet”) politician doing at a $50,000-a-couple fundraiser in Jerusalem with Sheldon G. Adelson — proprietor of one of the largest, if not the largest, gambling and casino operations in the world — seated in the honored position at his side?
Adelson and his company are under investigation by the Securities and Exchange Commission and the Department of Justice on allegations of foreign bribery. In addition, the United States Attorney’s office in Los Angeles is investigating whether Adelson’s Las Vegas Sands Corp. failed to alert authorities to millions of dollars transferred to casinos in violation of money-laundering laws, the Wall Street Journal reported on August 4.
In its 2011 Annual Report, the Sands Corp., of which Adelson is chairman and C.E.O., disclosed that
On Feb. 9, 2011, L.V.S.C. received a subpoena from the S.E.C. requesting that we produce documents relating to our compliance with the Foreign Corrupt Practices Act. We have also been advised by the Department of Justice that it is conducting a similar investigation. Any violation of the F.C.P.A. could have a material adverse effect on our financial condition.
Adelson and other officials of the Sands Corp. have denied they have done anything wrong.
There is a succinct answer to the question of why Romney would take the risk of closely associating himself with the immensely controversial Adelson: 10 million dollars — the amount Adelson and his wife have contributed to the super Pac supporting Romney, Restore Our Future.
The Adelsons are the largest donors to the Romney PAC. They have providing just over 12 percent of the $82.2 million Restore Our Future has raised so far. Romney’s personal wealth is an estimated $250 million, but the former governor is determined not to self-finance his quest for the presidency.
Adelson’s cash is more than enough to persuade Romney to swallow his pride and embrace the man who, earlier in the campaign, spent millions on a different candidate. It was Adelson who financed Newt Gingrich’s populist attack ads, which portrayed Romney, the former C.E.O. of Bain Capital, as a “predatory capitalist.” The Adelson-financed attacks were instrumental in bringing about Romney’s defeat in the South Carolina primary in January and they laid the groundwork for the attacks Obama is subjecting Romney to now.
The source of Adelson’s huge campaign contributions would appear to create a conflict with Romney’s Mormon convictions. The official website of the Church of Jesus Christ of Latter-Day Saints states: “The Church opposes gambling in any form, including government-sponsored lotteries.”
What Mormons Believe, an unofficial web site explicating the positions of the Church declares:
The Mormon Church has always opposed gambling in every form, including government-sponsored lotteries. Mormon prophets and leaders have counseled the members over time, to avoid gambling of any type. Doing so, leads one away from righteousness and into the hands of Satan. The Mormon belief is that it is an addictive behavior and leads only to destructive habits and practices. It undermines the value of work and motivates one to think that they can get something for nothing. In time, the gambler will deny themselves, as well as their family the basic needs of life. They will oft times steal from others to finance their addiction, which in turn leads to stealing, robbery, etc.
Adelson is number eight on the Forbes 400, a list of the 400 richest people in America, with a fortune of $21.5 billion amassed largely through an international collection of gambling venues.
Romney has been fortunate that the reporting on the inquiries into Adelson’s finances by the S.E.C. and the Justice Department has been limited in scope. Most coverage of Adelson’s contributions has not included any reference to either of these investigations.
Much of the most interesting reporting on the investigations has been done by ProPublica, working jointly with “Frontline” and the Investigative Reporting Program of the University of California at Berkeley.
The majority of the allegations against Adelson emerged in connection with an ongoing wrongful dismissal lawsuit against Sands filed in 2010 by Steven Jacobs, former C.E.O. of Sands China. Emails and other documents posted by ProPublica on July 16 raised questions about the role of Leonel Alves, a legislator and lawyer in Macau who was hired as an outside counsel to Las Vegas Sands.
These emails revealed concerns among Adelson’s legal advisers that a large payment for legal services to Alves would set off warning bells in the sections of the Securities and Exchange Commission and Justice Department that watch out for violations of the Foreign Corrupt Practices Act.
The anti-bribery provisions of the F.C.P.A., according to the Department of Justice, “make it unlawful for a U.S. person, and certain foreign issuers of securities, to make a corrupt payment to a foreign official for the purpose of obtaining or retaining business for or with, or directing business to, any person.” Alves is a member of the local Macau legislature, serves on a 10-member council that advises Macau’s chief executive, and is a member of the Chinese People’s Political Consultative Conference, which advises the government of China.
In a Sept. 30, 2009 email, Alves wrote to Jacobs that at the 60th anniversary of the People’s Republic of China “someone high ranking in Beijing approached me before the official dinner and invited me 2 handle issues related to the Venetian’s projects in Macau.” Alves wrote Jacobs, “There is an amount to be agreed by Mr. Adelson to settle the 2 issues. The amount to be paid to resolve the serviced apartments issue will be paid to a mutually accepted escrow agent and delivered to the gentleman upon official approval in the Official Gazette authorizing the sale of the serviced apartment.”
On Dec. 10, 2009, in another email to Jacobs, Alves wrote that he was returning to Beijing the next day and “will have chance to talk with my friends there.” Alves warned, however, that “what they request is extremely expensive (US300 m, which includes closing the Taiwanese case).”
It is not clear from the email what was done about the request for $300 million.
In a separate matter, Jacobs, in a March 11, 2010 email to Al Gonzalez, who was then general counsel at Las Vegas Sands, said that he had told Alves that a bill for services at three times the normal rate could not be paid in full because “we were worried that there could be F.C.P.A. issues related to this.” Roughly three weeks later, Jacobs wrote, “I was instructed by SGA [Adelson’s initials] and MAL [Michael A. Leven, president of Las Vegas Sands] to pay and close out the matter,” ProPublica, Frontline and Berkeley investigators disclosed.
The next day, March 12, 2010, Gonzalez wrote back to Jacobs: “You know from various conversations we’ve had and emails we’ve exchanged that I did not believe it appropriate to pay LA [Leonel Alves] three times his normal rates,” before adding, “I wish you would have advised me so I could have intervened.”
A month later, in April of 2010, Gonzalez resigned as general counsel to Sands. On July 23, Sands fired Jacobs as C.E.O. of Sands China, and soon the battleground shifted to the courts.
Ron Reese, Sands vice president for public relations, declined to comment, but pointed me to stories of past denials of wrongdoing by company officials, including Adelson. On March 28, Adelson declared in a speech in Macau that the Jacobs suit “is pure threatening, blackmailing and extortion. That is what it is all about.” Speaking at the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum, Adelson said:
When the smoke clears, I am 1,000 percent positive that there won’t be any fire below it. What they will find is a foundation of lies and fabrications that were designed for the sole purpose of trying to make a settlement for a lot more money than what he [Jacobs] felt he was entitled to.
The Adelson-Jacobs feud turned up hotly-disputed allegations even more out of sync with Romney’s religious and moral convictions after Jacobs filed a request for documents charging that Adelson had initiated a “prostitution strategy” to draw customers to the Macau facilities. The Jacobs filing read:
As background, shortly after my arrival to Macau in May 2009, I launched “Operation Clean Sweep,” designed to rid the casino floor of loan sharks and prostitution. This project was met with concern as L.V.S.C. Senior Executives informed me that the prior prostitution strategy has been personally approved by Adelson.
Adelson denied the allegation, telling Forbes: “Would I jeopardize being the 7th richest man in the US and the 14th or 15th richest person in the world to push prostitution? For what? I’m already the most profitable company in consumer services ever. What do I have to win?”
By July 20, the situation got even messier. Adelson sued Jacobs in Florida for defamation for making statements that “impugn Mr. Adelson’s integrity and harm his reputation.” In addition, Adelson threatened to sue the Democratic Congressional Campaign Committee for issuing press releases linking Adelson’s contributions to “Chinese prostitution money.”
On August 2, the D.C.C.C. backtracked, publicly declaring “In press statements issued on June 29 and July 2, 2012, the D.C.C.C. made unsubstantiated allegations that attacked Sheldon Adelson, a supporter of the opposing party.” The D.C.C.C. said, “This was wrong. The statements were untrue and unfair, and we retract them.”
On the legal front, Nevada District Court Judge Elizabeth Gonzalez will hold a hearing on August 30 to determine whether Las Vegas Sands Corp withheld key documents in Jacobs’ wrongful termination case.
It would be interesting to know what Romney has to say about Adelson’s gambling business and his difficulties with the S.E.C., the Justice Department and the D.C.C.C., but Romney’s campaign did not respond to repeated requests for comment.
The toughest charges leveled against Romney as a politician have been distinctly personal: that he lacks authenticity; that he is “a phony”; that “there are two Mitt Romneys”; that he is duplicitous; that he is a hypocrite and a flip-flopper, even on the most serious issues.
Romney is currently polling ahead of Obama on a number of key questions. Voters prefer Romney’s approach to the deficit (51-41), jobs (50-44) and taxes (49-45). But when it comes to questions of character, Obama crushes Romney: on likability (60-30); on understanding the problems faced in voters’ daily lives (50-39); and on honesty and trustworthiness, two issues that go to the heart of Romney’s problems, Obama holds an 8 point advantage (47-39).
Perhaps the least effective tools with which to address this liability are the caution and secretiveness that have become Romney’s trademarks. At a minimum, Romney could tell us how he reconciles the values he says he stands for with the basis on which Adelson’s fortune is built.
Thomas B. Edsall, a professor of journalism at Columbia University, is the author of the book “The Age of Austerity: How Scarcity Will Remake American Politics,” which was published earlier this year.