Monday, July 16, 2012

Sheldon Adelson's Pandora's Box (for Republicans)

What else can I say? I told you so. In February, we first caught a whiff of the skeletons hidden in Nevada G-O-TEA money man Sheldon Adelson's closet. Now, ProPublica is busting down that closet door to dig for those skeletons.

First off, the documents they obtained confirmed the longstanding suspicion of many American gaming regulators that Las Vegas Sands (Sheldon Adelson's global gaming powerhouse) has indeed hired local lobbyists to bribe "influence" the Chinese government to let Las Vegas Sands expand its footprint in Macau. Hiring anyone to influence a foreign government to legislate in favor of one's business violates the Foreign Corrupt Practices Act.

But wait, there's more. These documents also confirm the longstanding suspicion that Las Vegas Sands has grown to be quite cozy with key local triad (Chinese mafia) leaders. Nevada law forbids any licensed casino operator from involvement with organized crime.

William Weidner, president of Las Vegas Sands from 1995 to 2009, said he understood from the beginning that opening casinos in Macau meant dealing with "junkets" —companies that arrange gambling trips for high rollers.

Gambling is illegal in mainland China, as is the transfer of large sums of money to Macau. The junkets solve those problems, providing billions of dollars in credit to gamblers. When necessary, they collect gambling debts, a critical function since China's courts are not permitted to force losers to pay up.

Weidner said junkets are a natural result of China's controls on the movement of money out of the country, channeling as much as $3 billion a month from the mainland to Macau.

"To Westerners, the junkets mean money laundering equated with organized crime or drugs," he said. "In China where money is controlled, it's part of doing business."

Weidner resigned from the company after a bitter dispute with Adelson.

Nevada officials are now poring over records of transactions between junkets, Las Vegas Sands and other casinos licensed by the state, people familiar with the inquiry say. Among the junket companies under scrutiny is a concern that records show was financed by Cheung Chi Tai, a Hong Kong businessman.

Cheung was named in a 1992 U.S. Senate report as a leader of a Chinese organized crime gang, or triad. A casino in Macau owned by Las Vegas Sands granted tens of millions of dollars in credit to a junket backed by Cheung, documents show. Cheung did not respond to requests for comment.

Another document says that a Las Vegas Sands subsidiary did business with Charles Heung, a well-known Hong Kong film producer who was identified as an office holder in the Sun Yee On triad in the same 1992 Senate report. Heung, who has repeatedly denied any involvement in organized crime, did not return phone calls.

Funny enough, it was none other than former Republican Presidential Nominee and current US Senator John McCain (R-AZ) who went on PBS NewsHour last month to warn his fellow Republicans about Sheldon Adelson and his "funny money". The good stuff starts at 7:30 on the video below.

Watch Sen. John McCain: 'There Will Be Scandals' in Campaigns on PBS. See more from PBS NewsHour.



I'm now reminded of the Ancient Greek tale of Pandora's Box. In this case, Sheldon Adelson and his shady Macau money are the box, Mitt Romney and Congressional Republicans are Pandora, and the Citizens United era Supreme Court is Zeus. As The New Yorker has recently reported, Sheldon Adelson has dipped his hands into quite the unsavory business practices in Macau. And now, Mitt Romney and his fellow Republicans are gladly taking his campaign checks. This is now their problem.

Sheldon Adelson is the casino mogul and philanthropist whose ten-million-dollar donation last month to a Super PAC supporting Romney was “by far the biggest gift to date,” according to Forbes. Then, two weeks ago, Adelson reportedly pledged ten million more, this time to 2012 campaign efforts involving the Koch brothers, “cementing a potent alliance of two of the biggest spending forces in conservative politics,” Politico reported.

The end of that week brought a less glamorous headline: “Sheldon Adelson Denies Greenlighting A ‘Prostitution Strategy’ At His Macau Casinos.” That was a recap of the latest in a lawsuit working its way through Nevada courts, in which the former head of Adelson’s Macau operation has saddled Adelson with a range of lurid allegations involving Chinese triads, bribery, and criminal activity. (As I described in the magazine in May, those accusations have prompted the S.E.C. and Justice Department to investigate Adelson’s company.)

On June 28th, the former employee making the accusations, Steve Jacobs, dropped a list of new charges into a sworn declaration, including that he wanted to rid the casino of “loan sharks and prostitution” but was stymied when “senior executives informed me that the prior prostitution strategy had been personally approved by Adelson.” That is all it says, so it’s unclear if the plan purportedly “approved by Adelson” was intended to preserve or prevent prostitution. (Local police reportedly arrested more than a hundred prostitutes and twenty-two syndicate leaders in a 2010 operation at Adelson’s Venetian Macau.) The filing also accused Adelson of allegedly hiring illegal workers, and controlling a “Chairman’s Club” that permitted “favored members, including known or suspected organized crime figures.”


Yep, this is how Sheldon Adelson reaps in his billions. And this is how Mitt Romney and the outside "Tea Party, Inc." front groups coming into Nevada to help Romney, Dean Heller, and Joe Heck intend to fuel their campaigns. Remember this. Especially remember this whenever these Republicans try to lecture us on "corruption", "family values", and/or "personal responsibility".

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