Business Maverick, Media, Politics

Sheldon Adelson: A powerful man you’ve never heard of

Sheldon Adelson: A powerful man you’ve never heard of

Americans will soon begin to groan under the weight and information overload of politically-charged advertising, broadcast media commercials, Internet-based messages and targeted, automated phone calling in favour of candidates and policies. The superPACs are taking the presidential campaign trail by storm. By J BROOKS SPECTOR.

In Florida, the most recent polls say Newt Gingrich is around 11% behind Mitt Romney in the upcoming Florida primary on 31 January. The two other remaining contestants – Rick Santorum and Ron Paul – are unable to turn this next primary into anything beyond a two-man race, and despite Newt Gingrich’s fighting words that he is in it to the convention, a convincing Romney win in Florida may just about bring the Republican’s competition to a close, as the next contests in Nevada and Maine should be Romney’s to win as well. Romney has close ties to Maine, and Nevada has a large Mormon population presumed to be highly favourable to Romney. Of course the majority of delegates remain to be chosen in primaries and caucuses in some 50 races (47 states, the District of Columbia, Puerto Rico and Americans abroad) until the convention in Tampa, so it is still too early to close the book on it officially.

But the way this Florida primary has been carried out has brought a tremendous spotlight on the role of money – specifically, some really big, big money – and the people who donate it. It has always been easy to speak about big money men as they buy politicians who, once bought, would appear to have an obligation to stay bought. But the easy equation showing a one-to-one relationship that posits politicians + money = decisions on policies is too easy; it is more subtle. In particular, this Florida primary has drawn a bead on the role of a heretofore, less-than-well-known billionaire, Sheldon Adelson.

From very modest beginnings, Adelson built a massive fortune based on gambling casinos in Las Vegas and Macao, and as the founder of Comdex – the IT/technology trade fair in Las Vegas that was taking place from 1979 to 2003 in a convention centre Adelson built for it. Estimates are that Adelson is the country’s eighth-richest individual and over the past two decades or so, he has leveraged his fortune to gain a major influence on conservative political causes and politicians domestically, as well as the harder-edged parts of the American Israel lobby.

Along the way, Adelson found his ideological soul mate in Newt Gingrich, backing him to the hilt in his campaign for the Republican presidential nomination. And in the past few weeks alone, Adelson and his wife have ponied up $10-million (and perhaps $17-million overall for him) to superPAC campaign groups supporting the “angry little attack muffin”, as Ronald Reagan speechwriter, Peggy Noonan, has dubbed Gingrich. More in a minute on the metastasizing of those superPACs and what they mean for the future, but first a closer look at Adelson.

Following his massive investment in Gingrich’s success, reporters have been examining how Adelson and Gingrich first came together and about the glue that binds them still. Typical was a New York Times story describing Adelson as “a fervent Zionist who opposes any territorial compromise to make way for a Palestinian state, [and] Mr. Adelson has long been enamored of Mr. Gingrich’s full-throated defense of Israel…. ‘Read the history of those who call themselves Palestinians and you will hear why Gingrich said recently that the Palestinians are an invented people,’ Mr. Adelson said…”

But the UK’s Guardian also reminds us “Adelson was not always a rich rightwing Republican. He was born poor in the liberal heartland of Massachusetts, where being a Democrat was the norm. His father, a Jewish immigrant from Lithuania, was a cab driver in Boston while his mother ran a knitting shop. They brought up Adelson and his three siblings in a tenement in a tough neighbourhood of the town of Dorchester.” He has come far from that upbringing and his sharp turn to the right is at odds with the majority of American Jews.

It is important to recall that most American Jews continue to describe themselves as politically liberal and consistently supportive of Democratic candidates for president. This has been at a rate of support relatively constant from Franklin Roosevelt’s four elections to Barack Obama’s. While Jewish support for Obama is now less than in 2008, it is still significantly higher than that of the population as a whole.

Adelson’s financial ascent has had its controversies. The US Justice Department continues to investigate accusations Adelson’s casinos may have violated federal laws banning corrupt payments (aka bribes) to foreign officials in China. Chinese businessman Richard Suen has accused him of refusing to pay out on an agreement they had for profit sharing and a “success fee” after he had helped Adelson link up with the licence granting authorities in China and Macao. Adelson’s own sons have also sued him, accusing him of cheating them in business deals. And he has sued a newspaper columnist for libel, driving that reporter into bankruptcy. Well, maybe you don’t make a revolution – or a gambling empire – without breaking a few eggs.

Not everything goes as planned, however, even for a billionaire. Following his astounding successes with The Venetian casino and Comdex, Israeli authorities turned down his bid to build casinos there (and he also came up short with his approach to the Jordanian king for the right to build a casino in the Hashemite kingdom.) And so, after being rejected in the Middle East, he cast his eyes eastward and secured that gambling licence in Macao after sovereignty had passed to China at the end of the 20th century. The resulting development, the Macao Sands, opened in 2004 and industry analysts say it was so successful that its first-year profits alone exceeded the cost of the project.

But besides the intimations of payoffs, his Macao adventure had a few other political rough edges to it. Richard Suen, Adelson’s putative partner, has argued that when Adelson was in Beijing in 2001, he was asked to use his “influence” with the US Congress to derail a human rights resolution in Congress that Chinese officials were afraid might undermine their bid for the Beijing Olympics. Adelson has acknowledged he called congressmen, including Tom DeLay, then the House of Representatives’ Republican majority whip, about the resolution. While both Adelson and DeLay have denied deliberately trying to undermine the bill that eventually died in committee, one of Adelson’s employees has testified he took credit for its demise with his Chinese interlocutors. Other, more damaging accusations have come from a former Sands executive fired two years ago. The employee, Steven Jacobs, has said in court he was prevailed upon to employ “improper leverage” with Macao officials to get the approvals needed by the company for its casino. Investigations into these charges continue.
Together with his passion for conservative politicians – or perhaps tied together with it – is Adelson’s abiding passion for Israel and the rightist politics that govern it now. He has made about a $100-million worth of contributions to a Zionist organisation, Birthright Israel – as well as, less controversially, to the Holocaust museum of Yad Vashem. But what has been particularly interesting in Adelson’s political evolution has been the fact that his interest in Israel only came to the fore in the 1980s, well after he had become a wildly successful gambling entrepreneur. According to associates, it seems to have begun after marriage to an Israeli doctor working at the Rockefeller University in New York City on drug addiction issues. (Adelson family members had had addiction issues and he developed a personal interest in his wife’s research activities.)

Subsequently, Adelson became a very generous contributor to the American Israel Public Affairs Committee, the powerful pro-Israel lobby. Moreover, he has underwritten a for-free newspaper published in Israel, Israel Hayom, widely viewed as very supportive of Prime Minister Benjamin Netanyahu’s hawkish views. Israel Hayom has attacked both US and Israeli politicians, such as former PM Ehud Olmert, who expressed belief in a two-state solution. His paper has even advocated the firing of then-secretary of state Condoleezza Rice and Olmert because both were “betraying Israel.”

Meanwhile, Adelson’s conservative US domestic political views and his support for Israel came together in the person of a rising star in the US Congress – Newt Gingrich. At a 1995 reception in honour of newly elected Speaker of the House where Gingrich called for moving the United States Embassy from Tel Aviv to Jerusalem (and then backed legislation endorsing the move), the two men first met and it seems to have been a political love-at-first-sight moment. They met regularly thereafter and Adelson regularly let Gingrich use his private jet for trips to advance Gingrich’s political impact.

It is important to remember that the bulk of voter support for Republicans in which those voters have strong views on Israel comes from the fundamentalist/born again movement such as churches led by pastors like John Hagee. These voters have been an integral part of Bush’s two electoral victories – and they are key to the Gingrich strategy as well. No rational Republican expects to gain the majority of Jewish-American support, or even campaign contributions from the broad array of Jewish Americans – that support remains directed towards Democrats both out of tradition and for domestic political reasons on the issues.

The two men also shared such policy positions a strong anti-union sentiments and support for the preservation of tax deductions favourable to the gambling, er, the gaming, industry. In return for these expressions of support, Adelson held fundraisers for Republicans and made significant contributions to the GOP’s midterm election campaign cash box. Then, in 2006, as Gingrich began exploring a future run for the presidency, Adelson gave a million dollars in seed money to Newt’s exploratory committee, American Solutions for Winning the Future, on up to a total of over $7-million for this toe into the political water. By the 2008 election, Adelson had moved into a key position as a big time donor to the right wing Republican camp. Adelson eventually gave $30-million of his own cash for various Republican 2008 election efforts.

And so, surprise, surprise – Adelson’s hotel complex and the Sands Convention Centre have now become the standard spot for Republican events in Nevada. Or as Jon Ralston, The Las Vegas Sun’s political columnist explains it, “I call it the Republican headquarters on the Strip.” And Adelson’s hotel is the headquarters hotel for Saturday’s Nevada presidential caucus as well. A one hand washes the other kind of thing.

Last year, Adelson told friends that if Gingrich entered the race for the Republican nomination, he would be there for him. Adelson made an initial $5-million contribution to Winning Our Future, that pro-Gingrich super PAC, before the South Carolina primary, funding that may have been crucial for Gingrich’s victory. Adelson associates say he is in it for the long haul with Gingrich and his race for the White House – by virtue of Gingrich’s support for conservative, intensely pro-business domestic policies, his militantly rightwing, pro-Israel stance – and from a deep personal sense of loyalty to a friend in need. Indeed. Of course, a tidal wave of money still doesn’t mean Gingrich will end up the nominee – the voters as a whole still have a say in all this – along with Romney’s fortune and his own rich supporters who are giving to his superPAC.

And so this takes us to the question of how a growing wave of funding is transforming political spending in the US. Individuals remain limited to $2,500 per candidate per election in direct contributions to a candidate’s campaign – although that may be less and less important both from the impact of the superPACs and the kind of Internet-driven efforts the Obama campaign pioneered in 2008 to round up millions of small contributions. So-called bundlers also continue to play a big role in rounding up potential supporters in getting them to ante up with contributions, but such individuals remain limited to that $2,500 in direct payments to a candidate’s effort.

However, as a result of the Supreme Court decision two years ago – Citizens United v Federal Elections Commission – the court held that corporations (as well as individuals) had the right to spend essentially unlimited amounts of money on political policy issues, as well as to make direct contributions to candidate campaigns – ruling, in essence, that money was a form of free speech that should not be restricted, per the First Amendment to the Constitution.

This ruling now joins with the impact of Section 527 superPACs (political action committee). These policy advocacy organisations are not supposed to be directly connected to a particular candidate’s campaign, but they are entitled to promote similar positions on all kinds of policy areas. In practice, of course, candidates and these superPACs are working so closely together it is increasingly hard to see any daylight between them. As a result, major new funding streams are finding their way into political campaigns – and without the full, open and transparent documentation of who is paying into which superPACs. Critics argue this is a mechanism for the heightened influence of the super rich, like Sheldon Adelson (or a George Soros on the left) who have a strong view about an issue such that they overwhelm any national discussion; funding attack advertising, campaign call centres, and all the rest of the expensive but standard campaign tactics, techniques and technologies in contemporary America.

The Guardian, writing on this new twist argued “Critics have said Adelson’s backing of Gingrich ushers in a dangerous new world where America’s wealthiest people might feel able to single-handedly sponsor a major candidate’s bid for the White House. In a system already awash with campaign donations and money from lobbyists, such a level of financial backing has some worried. ‘It is an arms race of money. You can imagine a world where you can’t get elected without the backing of a billionaire,’ said Professor Noah Feldman, a constitutional law expert at Harvard. ‘Adelson is not breaking any rules. But the rules are mad,’ he added.”

While this started years ago with the Swift Boat campaign against John Kerry in 2004, what is new is that the Citizens United decision allows these independent groups to accept what amounts to unlimited corporate and labour union contributions and to spend these funds effectively on candidate advertising. As a result, the real difference between the new superPACs and those earlier activities is that they have begun their campaign spending, right from the get-go, well before the general election campaigning begins. Campaign finance expert, Colby College’s Anthony Corrado notes, “they were established to serve as candidate-specific parallel campaign organisations to influence the outcome of the nomination, as opposed to waiting for the nominee to emerge and then engage in what was essentially a general election context.”

And so, going into 2012, Americans will now groan under the weight and information overload of politically-charged advertising, broadcast media commercials, Internet-based messages and targeted, automated phone calling in favour of candidates and policies – with most of it stunningly, and specifically partisan rather than the ostensible purpose of superPACs to contribute to a more general public understanding. The cost, when it is finally tabulated, will astound even the most jaded and cynical observer; but it will guarantee that no one’s views, no matter how much they shade the truth or misrepresent it, will go unheard. One only hopes that voters have the stamina to sort through it all by 6 November as they finally get to select the country’s president for the next four years. DM





For more, read:

  • A Gloomy Gingrich Struggles to Snap His Slide in Florida in Time;
  • Secrets of the billionaire backing Gingrich’s shot at the White House in the Guardian;
  • Why America gives Israel its unconditional support in the Economist;
  • Taming Leviathan – These are both the best of times and the worst of times for the American-Jewish lobby in the Economist;
  • Justices, 5-4, Reject Corporate Spending Limit in the New York Times;
  • What Everyone Is Getting Wrong About Super PACs at the ABC website;
  • In the Arena 2012 Election Below Low (Joe Klein’s despairing column about Gingrich and his Middle East positions and Adelson’s money);
  • The Biggest Political Donations of All Time How the Adelsons’ $10 million Gingrich gift stacks up, at Slate (a fascinating look at campaign contributions over the years);
  • The Man Behind Gingrich’s Money in the New York Times.

Photo: Las Vegas Sands CEO Sheldon Adelson gestures during a news conference during the opening ceremony of the Marina Bay Sands casino in Singapore April 27, 2010. Las Vegas Sands, the world’s most valuable casino firm, expects to recoup its $5.5 billion investment in its Marina Bay Sands casino in Singapore within five years, Adelson said on Tuesday. REUTERS/Pablo Sanchez


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