Stephen Engelberg, managing editor of ProPublica since its inception in 2008. He recently co-authored an article with Matt Isaacs and Lowell Bergman on casino magnate Sheldon Adelson, the biggest Republican donor in the 2012 election. It’s called "Inside the Investigation of Leading Republican Money Man Sheldon Adelson." The story was co-published with PBS FRONTLINE and the Investigative Reporting Program of the University of California.
Peter Stone, freelancer with the Huffington Post and other publications. He spent two decades covering money and politics for the National Journal and the Center for Public Integrity. He’s been reporting on Sheldon Adelson since 2008.
As Senate Republicans block the DISCLOSE Act, legislation that would unmask anonymous campaign donors, we look at Sheldon Adelson, a major donor behind Republican campaigns. Adelson has pledged to donate $100 million to defeat President Obama but is now coming under new scrutiny for possible violations of federal anti-bribery law and ties to Chinese organized crime stemming from efforts to build casinos and other projects in Macau. An investigation by ProPublica, PBS "Frontline" and the Investigative Reporting Program at the University of California found Adelson may have violated the Foreign Corrupt Practices Act when he instructed a top executive to give $700,000 to a Macau legislator who aided his company’s efforts there. We’re joined by Stephen Engelberg, managing editor of ProPublica, and by Peter Stone, a journalist who has spent two decades covering money and politics and has been reporting on Adelson since 2008. "I think it [the report] comes at an embarrassing time, potentially embarrassing time, for Adelson and for a number of Republican groups who have received incredibly large donations from him in this cycle," says Stone. "He is now backing Romney. His overriding concern is to defeat President Obama." [includes rush transcript]
This is a rush transcript. Copy may not be in its final form.
NERMEEN SHAIKH: We turn now to big money and the 2012 political race. For the second day in a row, Senate Republicans blocked an effort by Democrats Tuesday to require political fundraising groups to reveal their anonymous contributors. In a pair of votes, supporters of the DISCLOSE Act of 2012 fell short of the 60 votes needed to clear a Republican procedural hurdle. The bill was drafted amid an outcry that political organizations were exploiting a tax law provision allowing certain so-called "social welfare" groups to collect unlimited contributions without disclosing their donors.
The Senate votes come at a time when the biggest Republican donor in the 2012 election, casino magnate Sheldon Adelson, faces fresh scrutiny for possible violations of federal anti-bribery law and ties to Chinese organized crime. The potential violations stem from Adelson’s efforts to build casinos and other projects in Macau.
AMY GOODMAN: An investigation by the University of California, ProPublica and PBS FRONTLINE found Adelson may have violated the Foreign Corrupt Practices Act when he instructed a top executive to give $700,000 to a Macau legislator who aided his company’s efforts there. Officials are also probing possible ties between Adelson’s company, Las Vegas Sands, and Chinese organized crime. He has given tens of millions of dollars to Newt Gingrich, Mitt Romney and other Republican causes, and has spoken of spending upwards of $100 million to defeat President Obama in the next election.
For more, we’re joined by Stephen Engelberg, managing editor of ProPublica. He co-authored the article on Sheldon Adelson with Matt Isaacs and Lowell Bergman. It’s called "Inside the Investigation of Leading Republican Money Man Sheldon Adelson," the story co-published with PBS FRONTLINE and the Investigative Reporting Program of the University of California.
Welcome to Democracy Now!, Stephen. Lay out exactly what you found.
STEPHEN ENGELBERG: Well, this is a story—it’s a fascinating story—about a man, Sheldon Adelson, who has a casino in Las Vegas and decides to go where the real money is, which turns out to be Macau. It’s a peninsula right on the edge of China. Macau, like Hong Kong, is a place that used to be another colony. You know, it was a Portuguese colony, becomes part of China. In the mainland China, gambling is illegal. Not only is gambling illegal, but you can’t collect gambling debt, so there are no casinos in China. The Chinese go to Macau to gamble. And when I say "go," I mean in large numbers. The handle of gambling for Las Vegas is $8 billion a year, Macau $32 billion a year.
So, about—you know, in about 2001 or so, the Chinese opened up to American companies coming in. Adelson is among the very first to seize this opportunity, even though, in fact, Macau is a notoriously difficult place to do business. The gambling has historically involved Chinese organized crime. That’s how the gamblers get from the mainland to Macau. So you have to kind of deal with that. The politics is very tricky. But he got a gaming license and set to work building casinos. And everything was going swimmingly until the fall of 2008, when the American economy collapsed. And, by the way, the Chinese suddenly cut off visas to Macau, significantly sort of scaled them back.
So, suddenly, all the money he borrowed to build this magnificent sort of casino empire in Macau, you know, is a huge debt, can’t pay it, and they need to raise money. And in order to do that, they need some favorable decisions from the local officials, local authorities in Macau, and they have a very bad relationship with those people. And so, they hire as outside counsel a man named Leonel Alves, local lawyer, who also happens to be in the legislature, also happens to be a member of what’s called the executive council, which advises the chief executive of Macau. And over the next few months, the things that are standing in their way start to disappear. They want to sell some apartment buildings separately. The government has said they can’t do that. Suddenly, after Mr. Alves is hired, a couple months later they’re allowed to. They don’t actually sell them. They’re still fighting to sell them individually. But it was a big sort of, you know, boost to their cash position.
Second thing was they wanted a ferry concession to deliver the gamblers right to their doorstep. And the courts in Macau—there are courts—have been saying, "We’re going to take this concession away from you. We’re going to give it to somebody else." The chief executive suddenly intervened at the last minute, right before the final court ruling, and said, "No, Sands keeps it. Court ruling over. Everything moot. You guys win." That was crucial, because they were trying to raise two-and-a-half billion dollars on the Hong Kong stock market in an IPO, and they had said, if they didn’t keep this concession, they might not raise the money. So what happens? IPO goes off. They raise the two-and-a-half billion. Company is saved. By the way, Sheldon Adelson, at that point, flat on his back, having put a billion of his own money to save his own company, company takes off like a rocket. He now has $25 billion. No man in America, no American taxpayer, has made more money during the Obama administration than Sheldon Adelson.
NERMEEN SHAIKH: And Forbes magazine, in fact, described Adelson as the largest investor in China, in general. And there are reports that he has made the bulk of his fortune in Macau. What do you think some of the consequences of this might be for him and his investments there?
STEPHEN ENGELBERG: Well, I mean, the main consequence right now is that he’s kind of made his bed. It’s going swimmingly, from an economic viewpoint. But now the American investigators, both in the state of Nevada, who are looking at ties to organized crime, and the federal government, in terms of his relationship with Alves and others—Leonel Alves, the legislator—there’s going to be an accounting as to how they achieved this great success. And we’ll see. I mean, these investigations result in all kinds of outcomes—typically, you know, large fines, sometimes jail terms for people involved.
Here’s one thing that’s different in this thing. Sheldon Adelson is the chief stockholder of this company. It’s a Fortune 500 company. But in this case, his hands are on everything. This is not like he insulated himself from the dealings on—he and Alves were on the phone together. The decision to pay him, according to emails we reviewed, was ordered directly by him. So this is a rare moment. You have a top guy—
AMY GOODMAN: How did you get all this?
STEPHEN ENGELBERG: Well, I could tell you, but we’d have—I’d have to shoot both of us, you know, so—but suffice it to say that the emails are real. No one’s contesting them. They are internal communications. And what it shows is that there was a huge fight inside this company. The general counsel of this Fortune 500 company felt that employing this gentleman was inappropriate, should be stopped. Adelson disagreed. The general counsel quit. And the gentleman, Leonel Alves, remains on the payroll right now of Las Vegas Sands as its outside counsel in Macau.
AMY GOODMAN: What has Adelson’s response been to your big investigation, Stephen?
STEPHEN ENGELBERG: Well, we have heard nothing directly from him. In court, what he has said, because there’s an ongoing fight between one of the executives who quit, a man named Steven Jacobs, who was president of the Macau operation, and the company, he has repeatedly said publicly that this is a disgruntled—these are disgruntled employees, there’s no truth to it. He takes a very sort of vigorous—he’s vigorously responded to several of the things that have been said about him in this court case, just disputing what’s being said.
AMY GOODMAN: Stephen Engelberg is with us, managing editor of ProPublica. We’re also joined by Peter Stone, a reporter who’s spent two decades covering money and politics, and has been writing for the Huffington Post. Peter, put this investigation that Stephen Engelberg, Lowell Bergman and others have done into the broader context of what you’ve learned about Sheldon Adelson.
PETER STONE: Well, I think it comes—excuse me, I think it comes at an embarrassing time, potentially embarrassing time, for Adelson and for a number of Republican groups who have received incredibly large donations from him in this cycle.
As you know, he was the leading supporter of Newt Gingrich’s effort, the outside group that was backing Gingrich. He had longstanding ties to Gingrich and was hoping he would get the nomination. When Gingrich withdrew, he threw his support, initially, reluctantly, to Romney. He felt that Romney was not as decisive as Gingrich and might not be quite as good on certain issues of particular importance to Adelson. Number one on his agenda is strong support for the Israeli government, and particularly the conservative wing of Israeli political parties. He has close ties to Netanyahu, and he is generally considered a hawk on Middle East issues. He opposes a two-state solution to the Israeli-Palestinian conflict. And Gingrich had been, you know, far more outspoken. Romney is strong on these issues, too. And, you know, he is now backing Romney.
His overriding concern is to defeat President Obama. He thinks Obama is weak on Israeli issues, Middle East issues. He also has publicly castigated him for his economic policies, described them, I think, to Forbes as socialist-style economic policies, which he’s worried about, you know, continuing for another four years. So he’s dedicated to defeating Obama. He’s also throwing a lot of money, tens of millions of dollars, into other groups, outside groups, that are playing big in trying to help Republicans win the Senate and keep the House. I reported in Huffington Post a few weeks ago that he has given an estimated $70 million or committed estimated $70 million thus far this cycle. We know about $30 million of that is public at this stage. I learned that he has given at least $10 million to a Karl Rove group that doesn’t have to disclose its donors, Crossroads GPS, and pledged another $10 million for Rove’s operation. Likewise, he has given $10 million recently to a Koch entity, one of the groups backed by the billionaire industrialists Charles and David Koch. So, he is definitely committed to helping get Obama out of the White House and trying to help Republicans make major gains in the fall in the congressional front.
NERMEEN SHAIKH: Well, Peter Stone, do you think there’s any likelihood that Romney’s campaign might be hurt by these revelations and his receiving funding from Adelson?
PETER STONE: Well, I’m sure there will be people raising questions about this. I’m sure there will be, you know, eyebrows raised as these reports continue to grow about the investigation. If it—you know, if there’s more evidence that the investigation is widening, it could conceivably embarrass Romney. But the money, the $10 million he has given thus far to the super PAC backing Romney, Restore Our Future, was just given in June, so it’s a little too early to predict how much this is going to impact the Romney campaign.
AMY GOODMAN: Stephen Engelberg, this investigation, how far will it go?
STEPHEN ENGELBERG: Well, I think that’s very unclear. These things take a while. I mean, people have asked, "Will this be resolved before the election?" Unless something very strange happens, the answer is no. This will be—the incoming president and the incoming attorney general will be hearing about this. And so, it does raise a fascinating question. You know, if that incoming president is Mitt Romney, how does he handle that? How does his attorney general handle it? Do they recuse themselves? What do they do with this? I mean, because it will be—they will be looking at, ultimately, the results of and what to do about a major investigation coming, you know, to the top of the government from major campaign contributor.
AMY GOODMAN: But why does it have to wait ’til then?
STEPHEN ENGELBERG: These things take forever. I mean, it’s quite clear from sort of other court documents and other things floating around, the Justice Department is really just in the early stages of looking at this. And it just—you know, it takes a long time to kind of interview people, depose them, collect documents. There are thousands and thousands of pages of stuff they could look through. There’s no chance this is going to be resolved before the election.
NERMEEN SHAIKH: I want turn to Sheldon Adelson’s own opinions on funding in presidential elections. Earlier this year in February, he told Forbes magazine, quote, "I’m against very wealthy people attempting to or influencing elections, but as long as it’s doable I’m going to do it. Because I know that guys like Soros have been doing it for years, if not decades. And they stay below the radar by creating a network of corporations to funnel their money. I have my own philosophy and I’m not ashamed of it." That’s the—end-quote. Peter Stone, your response to Adelson’s comments in Forbes magazine?
PETER STONE: Well, I think he became a much more generous donor to conservative groups and to Republican-leaning groups in 2008, in part because at that time there were very few mega-donors on the right, and many Republicans felt they needed someone who was—had done what Soros did, actually, in 2004, which was contribute over $20 million to some outside Democratic groups. I think he’s equaled, if not surpassed, Soros this year. Certainly, Soros is doing nothing at all on the national level anywhere near what Adelson is doing. Democrats were very concerned for a long time that there would be very little money coming from Soros. He has committed a million dollars to one outside group on the Democratic side, but this year Adelson has certainly far surpassed what Soros has done in the past.
AMY GOODMAN: At least one prominent Republican has expressed concern about the source of Sheldon Adelson’s campaign contributions. Arizona Senator John McCain noted in an interview last month with the PBS NewsHour that foreign money may be coming into an American political campaign.
SEN. JOHN McCAIN: Mr. Adelson, who gave large amounts of money to the Gingrich campaign, and much of Mr. Adelson’s casino profits that go to him come from this casino in Macau.
JUDY WOODRUFF: Which says what?
SEN. JOHN McCAIN: Which says that, obviously, maybe in a roundabout way, foreign money is coming into an American campaign, political campaigns.
JUDY WOODRUFF: Because of the profits that the casinos in Macau—
SEN. JOHN McCAIN: Yes. That is a great deal of money. And again, we need a level playing field, and we need to go back to the realization that Teddy Roosevelt had, that we have to have a limit on the flow of money and that corporations are not people.
AMY GOODMAN: That’s Senator McCain being interviewed by Judy Woodruff on PBS. Stephen Engelberg?
STEPHEN ENGELBERG: Well, I think what he’s saying is fascinating. But I do have to give Sheldon Adelson credit here on something. I mean, he has said, "I’m going to do this up front. I’m not hiding anything. I’m going to do it in my own name." You know, he could be doing this through 501(c)(4)s. We’d never know about it. And, you know, he has said, "I have a political viewpoint, and it’s legal, and I’m going to pour my money into this campaign. And who’s going to—who’s going to stop me?" And in a sense, that allows us to then investigate the source of the money. I mean, I think McCain is right that he makes a lot of money overseas, but we’re able, through the fact that we know he’s doing the contributions, to be able to tell the public what’s going on.
AMY GOODMAN: I wanted to go to Adelson on Israel and his agenda there. This is a bit of Sheldon Adelson in his own words. He and his wife Miriam recently donated an additional $13 million to Taglit-Birthright Israel, which sends young Jews on free trips to Israel. Adelson is known for giving very few media interviews. In one of these few interviews posted online, he talks about the funding of the program.
INTERVIEWER: How many tours has this been already?
SHELDON ADELSON: It’s a total of about 240,000 kids.
INTERVIEWER: A bunch of them have probably decided to move to Israel, and that’s been the goal?
SHELDON ADELSON: There are 14,000 kids that have moved to Israel. That isn’t the goal, but it’s certainly a good, very worthwhile end result.
INTERVIEWER: What would be the other goal? We’re hearing a lot about the fact that these kids are ambassadors, sort of, to the state of Israel and to the Jewish nation.
SHELDON ADELSON: You know, if Israel didn’t have these kids, or there were no people that—there were no Jews that lived in the diaspora that would advocate for Israel’s best interest, Israel would have to send people there. So we have a ready-made ambassadorial staff. All we have to do is get them to come here and love—fall in love with Israel.
AMY GOODMAN: That’s Sheldon Adelson talking about his funding of Taglit-Birthright Israel, which sends young Jews on free trips to Israel. Peter Stone, you were talking about his agenda around Israel. In fact, he has been even critical of AIPAC, is that right, for being too pro-Palestinian?
PETER STONE: Yes, I think he has criticized AIPAC. And the group that he is much more aligned with these days is the Republican Jewish Coalition, which takes a harder line on some issues than AIPAC does. So, he is definitely interested in doing all he can to support those groups, which are really the most conservative backers of the Netanyahu government.
For many years, Adelson also was a supporter of an AIPAC affiliate, which I reported on in 2008, that took numerous members of Congress on trips to Israel. This started in the early 1990s. And the AIPAC affiliate brought over dozens of members of Congress for fact-finding and educational trips to Israel. So he’s put a lot of money into different efforts to basically educate Americans about, you know, his side of the story on Israel.
AMY GOODMAN: And owns the largest daily free newspaper in Israel, is that right? And also supported the Clarion Fund, which put out the anti-Muslim film, The Third Jihad.
PETER STONE: Well, I know he supports—he owns and started a few years ago the largest free daily in Israel. He has, you know, definitely been very active. He makes no bones about it. And I think he was even quoted at one point. MSNBC had a segment a few months ago where they found an old comment of Adelson’s that, in effect, said he would have preferred his son have served in the Israeli armed forces to the U.S. armed forces. So, he is quite vehement in his views on, you know, the importance of the Israeli state and concerned that it’s not getting enough support from Americans.
NERMEEN SHAIKH: Peter, I also want to ask you about the DISCLOSE Act. On Tuesday, Senate Democrats’ second attempt in less than 24 hours to advance a campaign finance bill called the DISCLOSE Act failed. Before the vote, several Democratic senators explained the importance of requiring Americans spending more than $10,000 on elections to identify themselves. This is the bill’s sponsor, Sheldon Whitehouse of Rhode Island.
SEN. SHELDON WHITEHOUSE: This DISCLOSE Act will shine its light on the sources of the secret money polluting our elections, so we, as citizens, can make decisions and judgments about their motives.
NERMEEN SHAIKH: Meanwhile, Republican Minority Leader Mitch McConnell of Kentucky lambasted the DISCLOSE Act on the conservative radio show The Right Scoop with Mark Levin.
SEN. MITCH McCONNELL: This is the most important issue nobody is talking about, and that is the effort by the left to intimidate those who are contributing to outside groups who are opposed to the Obama administration into not contributing or shutting up or going away. What the Democrats have done here is conjure up a proposal to require the disclosure of contributions to what are called 501(c)(4)s. These are social welfare organizations, many of which, on both the left and the right, are involved in politics. And they’ve done it for the reason, of course, to get their names so they can intimidate them with the power of the government. The IRS is investigating Tea Party groups all across the country. The SEC has gone after corporations that they think may be exercising their First Amendment rights. This is quite reminiscent of the Nixon administration and the enemies list. They’ve got their enemies list. They’re checking it twice, making sure who’s been naughty and nice. And, of course, the people who have been naughty are anybody that are opposed to the Obama administration.
NERMEEN SHAIKH: That was Senator McConnell. Peter Stone, your comments on what he said?
PETER STONE: McConnell is taking this slightly exaggerated view here, at the least. The proposed bill, the bill that was filibustered in the Senate, would impact Democratic groups as well as Republican groups. Certainly, there are more Republican groups this year and since Citizens United that have benefited from large donations, multi-million-dollar donations. Studies have shown that, you know, Republican (c)(4) groups, social welfare groups, are—outnumber and have outraised Democratic ones. But the bill would impact both equally. In fact, it—
AMY GOODMAN: And the bill has now been defeated.
PETER STONE: The bill has been blocked at this stage, right. And, you know, it’s—I don’t think there’s any comparison to the Nixon enemies list. I think what drives the bill’s sponsors and—
AMY GOODMAN: It’s fascinating that McConnell is raising Nixon’s enemies list.
PETER STONE: Right, and it’s also interesting because McConnell has been a longtime advocate for greater transparency in campaign finance legislation and rules. In fact, that’s one of his major talking points over the years, that we don’t need more regulations, we need greater transparency. Here, he’s come out on the other side and said, well, it’s a politically driven effort, which I think is an exaggerated one. I think Republicans are concerned that their—the groups that are backing Republicans, which outnumber and have outraised Democratic ones, would probably, you know, be hit harder by this kind of a piece of legislation. But invoking the specter of an enemies list, I think, is certainly exaggerated and, you know, is politically incorrect.
AMY GOODMAN: And, Peter Stone, very quickly, your take on Mitt Romney not agreeing to release more of his tax history except for perhaps two years? I mean, this is what’s raging everywhere right now.
PETER STONE: Well, it’s interesting that Romney is, you know, sticking to that position, especially since you have more Republicans and conservatives raising concerns that he’s only hurting himself at this stage by not releasing more information. I think it’s reached a point where, you know, some Republican governors, some prominent conservatives are saying that, you know, the impact of this is really a drip, drip, drip, and, you know, it’s feeding media stories, and it’s feeding an image of secrecy. Whether he sticks to that, who knows? You know, it’s unclear. He’s weighing the costs and benefits of it, obviously.
NERMEEN SHAIKH: Peter Stone, can you say a little about the other billionaires, apart from Sheldon Adelson, who have been funding the presidential race, the 2012 presidential race?
PETER STONE: Well, there are quite a few billionaires, on both sides. Once again, this year, Republican billionaires are outnumbering Democrats. You have folks from Texas who are good friends, old friends of Karl Rove’s. Bob Perry, a home builder in Houston, Harold Simmons, an investor in Dallas, have both given substantial contributions to Rove’s group, American Crossroads, the one that is publicly—has to release its super PAC—it has to release the names of its donors. They’ve also helped Romney’s super PAC. There are Wall Street—you know, prominent Wall Street billionaires who have also been very active. Paul Singer is one of the more prominent hedge fund executives, who runs the Elliott Management. These are just a few of the other large names.
Of course, the Koch brothers, who are worth roughly what—each of whom is worth roughly what Sheldon Adelson is worth, $25 billion each, have been, for many years, working to put—you know, to boost outside groups on the conservative side of the spectrum. This year, Koch groups have talked about spending as much as $400 million in the elections to support Republican candidates and to help defeat Democrats.
AMY GOODMAN: Well, Peter Stone and Stephen Engelberg, we want to thank you very much for being with us. Peter Stone, freelancer with the Huffington Post and other publications, has spent two decades covering money and politics for the National Journal and the Center for Public Integrity. He’s been reporting on Sheldon Adelson since 2008. And Stephen Engelberg has been managing editor of ProPublica since its inception in 2008, just co-authored this article with Matt Isaacs and Lowell Bergman on casino magnate Sheldon Adelson, the biggest Republican donor in the 2012 election. We will link to it. It’s called "Inside the Investigation of Leading Republican Money Man Sheldon Adelson."
This is Democracy Now!, democracynow.org, The War and Peace Report. After we come back from break, we’ll talk to a Boston Globe reporter about the three missing years, 1999 to 2002. Mitt Romney says he was not in charge of Bain at the time, he was running the Olympics in Utah. But now some documents show otherwise. We’ll find out its significance. Stay with us.
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