The allegation turns up the heat on the Sands and Adelson, which federal prosecutors are investigating for alleged violations of the Foreign Corrupt Practices Act. Adelson has also emerged as the leading contributor to the Republican Party and Super PAC’s backing Mitt Romney.
The prostitution allegations add to what is already an explosive lawsuit. Former executive Steve Jacobs previously sued the Sands, alleging he was fired for objecting to demands by Adelson to extort senior government officials in Macau. The company denies the extortion and prostitution allegation.
In the latest filing, Jacobs alleged senior executives were concerned about a project he launched in May 2009 called “Operation Clean Sweep” that was designed to rid the casino of loan sharks and prostitutes. But executives were concerned with his plan because “the prior prostitution strategy had been personally approved by Adelson,” Jacobs alleged.
If true, the allegations offer a window into the way casinos do business in Macau. That would come as no surprise, given the Chinese territory has long been known as a haven for gangs and corruption. In fact, in December 2010, police rounded up more than 100 suspected prostitutes at the Sands’ Venetian Macao casino-resort while Adelson was in town.
Jacobs also alleges the company offered special deals through an elite “Chairman’s Club” to a select high-rollers that included leaders of Chinese organized-crime rings known as Triads. Adelson controlled the club and sent personal letters to its members, according to Jacobs’ filing. The allegations put a harsh light on Adelson at a time when he is essentially trying to buy the White House.