Why GOP Mega-Donor Sheldon Adelson Is Mad, Bad and a Danger to the Republic

Original Link: http://www.rollingstone.com/politics/blogs/national-affairs/why-gop-mega-donor-sheldon-adelson-is-mad-bad-and-a-danger-to-the-republic-20120410

By Rick Perlstein

Time may be up for Newt Gingrich; but his biggest backer is not going away. Sheldon Adelson, the casino billionaire who with his wife donated $16.5 million dollars to a Newt-linked Super PAC – and later said he might be willing to up that to $100 million – has made it plain he’ll eagerly switch his allegiance to whichever Republican faces Barack Obama in the fall.

But the reporting about the 78-year-old mogul – listed by Forbes in 2008 as America's third-richest man – has frequently been misleadingly incomplete. Take this front-page New York Times profile from January 29. Adelson's devotion to Newt Gingrich, the Times explained, "stems from a devotion to Israel.... A fervent Zionist who opposes any territorial compromise to make way for a Palestinian state, Mr. Adelson has long been enamored of Mr. Gingrich's full-throated defense of Israel." But the Gingrich-Adelson romance was no doubt fueled as well by their shared devotion to crushing labor unions to dust – a passion mentioned only in passing in the 37^th paragraph of a 48-paragraph piece. Indeed, Adelson's anti-union mania (I would argue) is the most important thing to know about him. For it reveals just how crazy, and how unscrupulous, the man is.

Let's start at the very beginning. Adelson remembers meeting Gingrich in Washington in 1995, when Gingrich was House Speaker and Adelson was lobbying to get the U.S. embassy in Israel moved from Tel Aviv to Jerusalem. Otherreports have them being introduced in 1996 by a far-right anti-union operative in Nevada who worked for Adelson. Details of the subsequent courtship are murky, although the huge favor Gingrich did for Adelson in 1996 by turning off a federal investigation of the gambling industry probably did a lot to cement their friendship.

Two years later, Nevada conservatives sponsored a "Paycheck Protection" ballot initiative – the right-wing term for measures weakening unions by banning them from automatically deducting dues from members' pay. Adelson was gung-ho for it – and "would spend any amount of money," D. Taylor, secretary-treasurer of Las Vegas's Culinary Workers Union Local 226, told me; however, the Nevada Republican Party was split over whether to take on the powerful Vegas unions. That was when Gingrich did the anti-labor side a solid, recording a videotaped message in support of the measure at a Nevada GOP dinner at the height of the intra-party civil war. And, in another detail the Times missed, Gingrich also promised to block an IRS proposal to tax meals that casinos provide employees. (An amendment to that effect, costing the U.S. Treasury $316 million, indeed ended up in an IRS reform law.) Soon after, Gingrich enjoyed a fundraiser at the Vegas convention center owned by Adleson. Ah, young love.

In 1999, Adelson closed one casino, the Sands, and completed work on a new one, the Venetian, stiffing so many contractors that there were at one time 366 liens against the property. Taylor, of the Culinary Workers, said he and his colleagues presumed that "like every other casino that had done that, workers in the [closed] hotel would be given priority when the [new] hotel was built." Instead, Adelson refused even to talk. All this, in a union town like Vegas, was unprecedented. "Even when you're having battles, you continue to have talks. Shit, we're talking to the North Koreans right now!" he told me. "The Israelis talk to the Arabs. Talking doesn't necessarily solve anything, but at least you understand the other guy's position." Adelson, not much interested in understanding the other guy’s position, proceeded to launch a campaign against the Culinary Workers that Taylor calls "beyond aggressive."

Right before the grand opening of the Venetian, in 1999, the Culinary Workers staged a demonstration on the public sidewalk out front. Adelson told the cops to start making arrests; the cops refused. Glen Arnodo, an official at the union at the time, relates what happened next: "I was standing on the sidewalk and they had two security guards say I was on private property, and if I didn't move they'd have to put me under 'citizen's arrest.' I ignored them." The guards once again told the police to arrest Arnodo and again, he says, they refused. The Civil Rights hero Rep. John Lewis, in town to support the rally, said the whole thing reminded him of living in the South during Jim Crow.

Marvels Arnodo, "Here you have a sidewalk that 12 billion people walk down, [and] the only people who can't use it are the union!" The Culinary Workers argued before the National Labor Relations Board that Adelson's attempts to keep them from demonstrating violated federal labor law. Adelson's lawyers countered that their client’s First Amendment rights were being violated – because his threats of arrests were an instance of "petitioning the government." The union won the right to protest; Adelson refused to comply with the settlement, copies of which the union passed out on that very same sidewalk. That was "fraudulent use of the seal of a government agency," the Venetian argued, further claiming that union workers had "impersonated" NLRB officials, and that the volunteer labor activists had been coerced. The great civil liberties attorney Alan Dershowitz got involved – on Adelson's side. "The Venetian has no property rights to the sidewalk," a federal appeals judge told them in 2007. Unmoved, Adelson tried, without success, to take the case all the way to the Supreme Court. After all, Adelson told the Wall Street Journal, radical Islam and the right to more easily join a union were the two most "fundamental threats to society."

Did I mention Adelson is nuts? But don't take my word for it – it was George W. Bush who called him "some crazy Jewish billionaire."

Consider: Much to the chagrin of advocates of effective corporate governance, Adelson's company Las Vegas Sands (LVS) spends more on security for him and his family than any other publicly held corporation, $2.5 million – two and a half times more than Dell, Oracle, and Amazon spend on their CEOs. He usually ambles around with an armed former agent of the Mossad, Israel's spy agency – for instance, into a deposition for a lawsuit filed by employees (including security guards!) claiming they hadn't been paid overtime. It was quite a scene – and one that you can see for yourself, because once Adelson tried to have the plaintiffs' lawyers cited for contempt after a TV station received and aired a videotape of the deposition, the publication Vegas Inc. ran the video as part of their coverage of this latest Adelson legal action. It reveals a creepy sourpuss who is a blatant liar: Adelson said he brought in the muscle because he felt threatened when the plaintiff lawyer "attempted to throw books at" him. See for yourself (at 2:40) if such a thing ever happened, then his astonishing petulance when a lawyer objects to continuing a legal proceeding with an armed janissary staring him down.

Then there was the time, late in 1999, when Las Vegas's Temple Beth Shalom honored the city's new Jewish mayor with a dinner. It was originally to be held at Adelson's new Venetian, but the Democratic mayor refused to cross the picket line. So they held it at the Four Seasons instead. Adelson withdrew the $250,000 he had pledged for the temple's building fund and tossed it to another Jewish organization instead – but not before verbally dressing down Beth Shalom's rabbi with such virulence that the shaken rabbi recalled, "Nobody had ever talked to me like he talked to me." He went similarly berserk after the National Jewish Research and Medical Center announced that their annual gala would recognize John Wilhelm, then the head of the Culinary Workers. One reason they were honoring Wilhelm was because his union had donated $700,000 to the hospital over the previous 23 years. Allegedly, Adelson offered the hospital $70,000 – a payoff – if they would just honor someone else.

Adelson has even sued the Las Vegas Convention and Visitors Authority – formed collectively by the entire industry to fill casinos by pulling giant conventions into town – for competing with his own, private, convention center. Which is like potato farmer suing Idaho. But Sheldon Adelson simply loves to sue – over 150 lawsuits in Clark County in ten years alone, including against his own sons. In England, he sued UNITE HERE for defamation after they passed out a leaflet at a small rump meeting at a Labour Party congress accusing him of being, among other things, "extremely litigious." (That didn't pass muster even under Britain's extremely lax libel laws.)

And – no surprise here – Adelson often gets sued. That's how we know that the man trying to buy himself a president is under three investigations for violating the Foreign Corrupt Practices Act.
These days, Adelson's LVS makes three-quarters of its money from properties in the former Portuguese colony of Macao, which in 2006 surpassed Las Vegas as the world's biggest casino town and is the one place in China where gambling is allowed. It is also a wildly corrupt place. Before the entrance of foreign operators, Macau's casinos were run by a monopoly controlled by a man linked to organized crime named Stanley Ho. Even now, most of its revenues derive from a curiously byzantine "junket" system, in which high-rolling players are ferried from the mainland and staked massive amounts of money to get around China's strict currency and debt collection laws. According to a casino executive quoted in a State Department cable, "all of the junket operators are directly or indirectly involved with the triads" – Chinese organized-crime gangs. The man LVS hired to run its Macau casinos, Steve Jacobs, said he wanted to distance the company from the junket system, but that Adelson wanted to expand the junkets within his casinos. Eventually, Jacobs was fired. His wrongful-termination suit alleges, according to court filings seen by Rolling Stone, "When Jacobs objected to and/or refused to carry out Adelson's illegal demands, Adelson repeatedly threatened to terminate Jacobs' employment." The nature of those demands, which are disputed, are suggested by LVS's countersuit against Jacobs for defamation – which paraphrases Jacobs as having claimed that "Adelson had (1) bribed, or attempted to bribe, the Chief Executive of Macau; and (2) instructed subordinates to gather damaging information about public officials for Sands China to improperly use to its advantage."

Is that the sort of thing Adelson is capable of? The U.S. Securities and Exchange Commission certainly seems to suspect so. Just two months ago, on February 9, they sent LVS a subpoena requesting documents relating to its compliance with the Foreign Corrupt Practices Act. LVS’s most recent "10k," the form the SEC requires publicly traded companies to produce summarizing their annual performance, including any legal proceedings against them and risk factors investors should know about, acknowledges, "The Company has also been advised by the Department of Justice that it is conducting a similar investigation. It is the Company’s belief that the subpoena emanated from allegations contained in the lawsuit filed by Steven C. Jacobs."

And here's the thing: What does it suggest when a man under three federal investigations can plan on spending up to $100 million dollars to elect the man with authority over the agencies conducting those investigations?

Richard Nixon liked to describe the influence a powerful person held over other powerful people as that person’s "stroke." Sheldon Adelson knows stroke. In another illuminating deposition, former LVS president Bill Weidner described Adelson on the phone asking Republican House whip Tom DeLay to kill a human rights bill that might get in the way of Beijing's bid for the 2008 Olympics. "I'm standing here with the mayor of Beijing," he said, which was true. The bill was withdrawn, though not, DeLay insists, for any reason having to do with Adelson. In any event, the scene is awfully suggestive of how a veteran political greaser operates: You earn stroke with someone powerful by making a credible case that you've been instrumental in their getting, and maintaining, power.

Should the United States have been saddled with a President Newton Leroy Gingrich, Sheldon Adelson's stroke would have been pretty flippin' awesome.

Even so, although the megalomaniacal former Speaker of the House and moon-colony aficionado's campaign is going the way of all flesh, Sheldon Adelson is emphatically not going away. On March 22 he hosted a dinner at his home chockablock with Mitt Romney supporters, including RNC chairman Reince Preibus. This man will have less stroke with Mitt Romney should the Mormon become president. But if he gives his Super PAC tens of millions of dollars, he may well have just enough.

It's the kind of thing that makes you fear for our republic.