Las Vegas Sands misled court

September 17, 2012 10:37 am

The Las Vegas Sands profits by stacking the odds against its casino customers. So it should come as no surprise that the casino also tried to play a version of three-card Monte in a Nevada courtroom.

The Sands, which is controlled by billionaire Sheldon Adelson was fined $25,000 for trying deceive the court in a wrongful termination case brought by a former executive of its Macau operations.

At issue are emails and other electronic data sought by Steve Jacobs, the former Sands executive fired in 2010. Sands officials told the court the data could not be removed from Macau due to a local data protection law. But the data had already been copied and removed from Macau in 2010 for review by Sands officials, District Court Judge Elizabeth Gonzalez ruled last week.

The Sands repeated inaccurate statements over several months, and intentionally tried to deceive the court in order to stall the discovery process, the judge wrote. Jacobs’ suit alleges Adelson directed him to investigate Chinese officials and gather information to use against them. Jacobs also alleges Adelson told him to hire a Macau government official, a potential violation of U.S. anti-bribery law and that Adelson approved a “prostitution strategy” to help boost business at the casino. The Sands and Adelson deny the allegations.

The case has caught the attention of the U.S. Department of Justice, Securities and Exchange Commission and Nevada casino regulators, which have all launched criminal investigations. Adelson, a leading donor to the Republican Party and Mitt Romney, has contributed tens of millions of dollars in an effort to defeat President Obama and influence policy in Israel.

Inside Adelson’s casino: politics & profit

August 14, 2012 9:58 am

Eight months ago, most people never heard of Sheldon Adelson, the billionaire casino mogul that controls the Las Vegas Sands empire. But many are now getting a fuller picture of how one of the GOP’s biggest donors mixes politics and profits to get what he wants both here and abroad. (Coincidentally, Paul Ryan, the GOP vice presidential pick, will be at a fundraiser today at the Sands’s Venetian casino in Las Vegas, where Adelson is expected to attend.)

A page-one story in The New York Times today details how Adelson used cash, connections and clout to expand his casino empire into China’s Macau region. The story details how Adelson turned to a mysterious businessman named Yang Saixin to help win friends and influence top officials in China. Those often-murky efforts included hiring the daughter of a leading international trade official; trying to buy a Chinese basketball team; and calling former U.S. Rep. Tom Delay regarding a resolution condemning China’s human rights record.

Along the way, Adelson’s company has spent millions of dollars to get better connected in China. Questions of where all the money has gone has led to lawsuits and a federal investigation of whether the Sands has violated bribery provisions in the Foreign Corrupt Practice Act. Adelson denies any wrongdoing.

In addition to the detailed account in The Times, other publications have weighed in with investigative pieces of Adelson’s casino company, including The Wall Street Journal and Pro Publica. (See here and here.)  For a list of seven surprising facts about Adelson see here. Before throwing his support behind Mitt Romney, Adelson backed Newt Gingrich in a bid to “destroy Romney,” as The Atlantic detailed here. Connie Bruck’s profile of Adelson in The New Yorker in 2008 also provides excellent into how he operates.

Romney and the casino mogul

August 7, 2012 10:56 am

Distinguished reporter Thomas B. Edsall raises some good questions in The New York Times about the relationship Mitt Romney has with one of his biggest donors, casino mogul Sheldon Adelson.

In particular, Edsall points out that Mitt Romney’s Mormon religion opposes gambling in any form, including government-sponsored lotteries. But as a candidate, Romney has no qualms about using millions of dollars in donations from Adelson to help defeat Barack Obama. At the very least, Romney should explain how he “reconciles the values he says he stands for with the basis on which Adelson’s casino fortune is built,” Edsall writes. (This blog has also raised those points in the past. See here and here.)

Edsall goes on to detail the various federal investigations swirling around Adelson’s casino empire, including probes into possible violations of the Foreign Corrupt Practices Act and money laundering. Adelson denies any wrongdoing. But those investigations also raise troubling questions as to why Romney would allow Adelson to cozy up to him and what the Las Vegas casino magnate wants in return for his outsized donations.

Of course, like many of his other policy positions, Romney is all over the map when it comes to gambling. As governor of Massachusetts, Romney avoided gambling because of the social costs. But at Bain Capital, his firm invested in gambling companies, as this report in Mother Jones details.

Sands investigated for money laundering

August 6, 2012 9:23 am

Billionaire casino mogul Sheldon Adelson’s casino company already faces a federal investigation for violations of the Foreign Corrupt Practices Act. Now, authorities are investigating whether the Las Vegas Sands Corp. violated money-laundering laws by allowing two high rollers to transfer millions of dollars to the casino, despite red flags, The Wall Street Journal reported.

The probe centers around the company’s handling of money from two gamblers with troubled pasts: a Mexican businessman later accused of drug trafficking and a former California executive subsequently convicted of taking illegal kickbacks. (And these are the casino’s good customers.)

The Sands said it acted properly and did not violate any laws. The probe will focus on whether Sands executives showed “willful blindness” or “flagrant organizational indifference” to where the money came from.

One of the gamblers was Zhenli Ye Gon,  who was indicted in 2007 on charges of trafficking products used to make methamphetamine after Mexican authorities and the U.S. Drug Enforcement Administration raided his Mexico City home and found more than $205 million. Ye Gon told the Associated Press in 2007 that he bet $150,000 a hand at baccarat during his gambling sprees, and that the Sands-owned Venetian casino gave him a Rolls Royce. He lost more than $125 million at Vegas casinos, including the Venetian, according to a 2007 affidavit by a federal agent who reviewed casino records, although $40 million of that was lent to him by casinos and never paid back, according to The Journal.

The probe shines yet another black eye on the Sands and some of the murky high rollers that casinos do business with. It also raises longstanding questions about the use of casinos by drug dealers and others to launder money.

 

Adelson’s & Romney’s big adventure

August 1, 2012 9:38 am

Mitt Romney’s overseas trip with billionaire casino mogul Sheldon Adelson in tow was a disaster politically. But Adelson still helped to raise a pile of money for Romney, who spent lots of time with fundraisers.

The trip was designed to make Romney look like a statesman. Instead, it was dominated by one gaffe after another. (See Jon Stewart’s funny but accurate analysis here.) Or as the headline on this Washington Post story says: “Romney trips ends with more baggage than planned.”

New York Times columnist Thomas Friedman said Romney should have just gone to Las Vegas, since the trip was really all about money. Maureen Dowd used a scene from The Soprano’s to show how the trip went. Romney blamed the press for highlighting the gaffes, while an aide to President Obama called the trip an “embarrassing disaster.”

Romney’s trip is news for this blog because of Adelson’s key role. Adelson is by far the largest donor to Romney’s campaign. The casino magnate helped raise money and introduce Romney to Jewish funders. Adelson tried to downplay his involvement saying he just traveled to Israel for a shwarma sandwich.

If Romney is elected president, Adelson’s influence on the White House could be substantial. His Sands casino company is under investigation for potential violations of the Foreign Corrupt Practices Act.

Macau casinos lose steam

July 30, 2012 9:20 am

The booming casino market in the Macau region of China appears to be cooling off, impacting the profits of several major U.S. casino companies.

Las Vegas Sands Corp.’s earnings dropped 34 percent in the second quarter, due mainly to a slowdown in Macau, where the company has four casinos. Earlier, Wynn Resorts Inc. announced that its second quarter earnings dropped by 7 percent. Both stocks are down 30 percent since April.

The slowdown could spell trouble for the Sands, which has plans to keep building in Macau. The company, controlled by billionaire Sheldon Adelson, almost went bankrupt during the 2008 financial crisis. But the booming Macau market saved Adelson’s company and has been the main source of profits for the Sands and Wynn in recent years. The growth has also led to legal troubles for both companies, which are under federal investigation for possible violations of the Foreign Corrupt Practices Act. (See here and here.) New questions were raised last week in the probe of Adelson’s company.

Adelson has also emerged as the biggest Republican donor during this year’s election cycle, giving tens of millions of dollars to conservative causes and candidates, including Mitt Romney. Adelson traveled with Romney to Israel over the weekend, where there was a fundraiser and Romney upset Palestinians with his comments.

Casino mogul buying Jewish votes

July 25, 2012 10:42 am

Casino mogul Sheldon Adelson has already demonstrated that he is ‘all in’ when it comes to helping to defeat Barack Obama in the November election. Adelson has given tens of millions of dollars to several conservative political action committees this election season and has said he will spend as much as $100 million.

Now he is backing a group that is designed to win over Jewish voters in battleground states like Florida, Pennsylvania and Ohio. The group, known as the Republican Jewish Coalition, plans a multimillion-dollar advertising campaign in the coming weeks called “My Buyer’s Remorse.”

The ads uses testimonials from people who say they regret supporting Obama in 2008 because of his economic policies and his posture toward Israel. Most Jewish voters tend to vote for Democrats, but the campaign hopes to sway enough voters to help tilt swing states in favor of Mitt Romney.

If anyone should have buyers remorse it should be the voters and lawmakers that have supported the expansion of casino gambling. Rather than generate wealth and economic spin-off, casinos are a regressive tax that strip wealth from gamblers and leave communities poorer. Adelson, whose business methods are under investigation, is laughing all the way to the bank as he uses some of the gambling profits – much of it from China - from his Sands casino empire to try to buy the presidential election.

The hidden downsides of casinos

July 2, 2012 11:07 am

Casinos are associated with increases in all sorts of social and economic ills, including crime, divorce, suicide and bankruptcy in the surrounding areas where they locate. Since the casinos strip wealth from customers – leaving less money to spend at other area businesses – it is also unclear how much economic impact they have beyond the tax revenue and jobs created.

Public officials often ignore or downplay the social and economic ills. But two recent stories highlight the seedy underbelly that come with casinos.

A new casino in Queens, N.Y. was robbed for the first time on Friday. An unarmed robber slipped a note to a cashier at Genting’s Resorts World Casino in Queens and demanded cash. The cashier handed over an undisclosed amount of money and the suspect fled about 4:45 p.m., police said. Given that the casino is pulling almost $60 million a month, it is unlikely that this will be the last crime linked to Resorts World.

In Bethlehem, Pa. the number of drunken driving arrests have doubled since the Sands casino opened there. A report said the “free access to alcohol on the casino floors and heavy marketing of gambling has resulted in substance abuse and related crime.”

But a police official said better training and increased enforcement efforts by police is why the number of arrests has increased. The population in the area has also increased, putting ore motorists on the road. But the increases in drunk driving around the Bethlehem casino jive with increases in other towns where casinos have located. See here, here and here.

For example, in Connecticut, several drunk driving deaths have been linked to Indian casinos there. In March, Connecticut College student Elizabeth Durante was killed when the van she was traveling in was struck by a driver traveling the wrong way without headlights on Interstate 395. Durante’s family has sued the bar at the casino.

Prostitution alleged at Adelson’s casino

June 29, 2012 1:04 pm

A former executive in China for the Las Vegas Sands Corp. alleged in a lawsuit that chairman Sheldon Adelson approved a “prostitution strategy” at the casino’s Macau properties.

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.

Sheldon Adelson’s big bet

June 25, 2012 10:05 am

The New York Times had an excellent editorial yesterday detailing why casino mogul Sheldon Adelson is spending tens of millions of dollars to defeat Barack Obama and help other Republicans win Congressional races. Adeslon, head of the Sands casinos empire, wants two things: To support Israel and his casino business.

Adelson, a hard-line supporter of Israel, opposes the two-state solution for Israel and Palestine that Obama and most Israelis support. He considers that move would lead to the destruction of Israel. Secondly, Adeslon wants to protect his vast casino wealth and he opposes what he considers to be Obama’s “socialist-style economy” and “redistribution of wealth.” Mainly, he doesn’t want Obama to raise taxes on companies that make huge profits overseas. (Read a Rolling Stone profile here.)

Never mind that the casino business is nothing more than redistribution of wealth mainly from the poor and working class to Adelson’s wallet. Or that 90 percent of the Las Vegas Sands Corp.’s earnings come from hotel and casino properties in Singapore and Macau - which as The Times points out “the latter is located, by the way, in China, a socialist country the last time we checked.”

The tax rate in Macau is zero. Because of the lower tax rates in the foreign countries, the Sands has a United States corporate tax rate of 9.8 percent, compared with the statutory rate of 35 percent. Obama wants to end the deductions and credits that enable companies like Adelson’s to shelter billions in foreign income.

The Justice Department is also investigating whether Adelson’s Macau operations violated the Foreign Corrupt Practices Act. “An inquiry that Mr. Adelson undoubtedly hopes will go away in a Romney administration,” The Times writes. ”For such a man, at a time when there are no legal or moral limits to the purchase of influence, spending tens of millions is a pittance to elect Republicans who promise to keep his billions intact.”