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.