A former top China executive at Las Vegas Sands Corp. suggested in a court filing made public Thursday that there was potential wrongdoing by company executives, including allegations that chairman Sheldon Adelson approved a “prostitution strategy” at the casino operator’s Macau properties.
The filing in Nevada District Court in Las Vegas by Steve Jacobs, the executive, is one of the most explosive yet in a continuing legal dispute between Mr. Jacobs and his former employer. Mr. Jacobs and his attorney accused the casino operator of withholding documents Mr. Jacobs is seeking in order to establish jurisdiction in his wrongful termination lawsuit, which was first filed in 2010.
In the filing, Mr. Jacobs alleged that senior executives were concerned about a project Mr. Jacobs launched after he arrived in Macau in May 2009, called “Operation Clean Sweep,” designed to rid the casino floor of loan sharks and prostitution. The executives were concerned with his plan because “the prior prostitution strategy had been personally approved by Adelson,” Mr. Jacobs alleged in the filing. The filing didn’t provide details on the purported “prostitution strategy.”
According to the filing, executives confirmed by email Mr. Adelson’s involvement in the strategy and highlighted its “success.” Mr. Jacobs says he put hard copies of those emails in a folder labeled “Outrageous” in his office drawer.
Such activity is forbidden by the Foreign Corrupt Practices Act. Interestingly enough, this act is currently under attack by Republicans and the U.S. Chamber of Commerce, especially certain USCoC members like Wal-Mart — though I wouldn’t be surprised if Mr. Adelson’s troubles have lent an urgency to GOP efforts to gut the FCPA. It wouldn’t be the first time Republican legislators have saved this particular benefactor from feeling the pinch of law enforcement or any other sort of regulations or accountability. Just ask Newt Gingrich:
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. Other reports 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.
Has Sheldon Adelson finally found himself in a situation he can’t bully or buy his way out of? Time will tell. Meanwhile, various eyes are on Mitt Romney, to see if the sudden exposure of Adelson’s Macau prostitution scandals might cause him to have a group acting on his behalf return that $10 million Adelson gave them.