Sheldon Adelson’s Sands Corp. admits to violation of Foreign Corrupt Practices Act

Posted by AzBlueMeanie:

In 2012, billionaire casino mogul Sheldon Adelson contributed more than $60 million close to $150 million to elect Republicans up and down the ticket, including Newt Gingrich and Mitt Romney, through their Super-PACs.

I posted last July about a ProPublica investigative report co-published with PBS' "Frontline" into an investigation by the Department of Justice, FBI and SEC for violation of the Foreign Corrupt Practices Act by Sheldon Adelson through his Macau casino. Exhibit 'A' in the case to overturn Citizens United – Sheldon Adelson trying to buy the American presidency with foreign money:

16Internal email and company documents, disclosed here for the first time, show that Adelson instructed a top executive to pay about $700,000 in legal fees to Leonel Alves, a Macau legislator whose firm was serving as an outside counsel to Las Vegas Sands.

The company's general counsel and an outside law firm warned that the arrangement could violate the Foreign Corrupt Practices Act. It is unknown whether Adelson was aware of these warnings. The Foreign Corrupt Practices Act bars American companies from paying foreign officials to "affect or influence any act or decision" for business gain.

 

Federal investigators are looking at whether the payments violate the statute because of Alves' government and political roles in Macau, people familiar with the inquiry said. Investigators were also said to be separately examining whether the company made any other payments to officials. An email by Alves to a senior company official, disclosed by the Wall Street Journal, quotes him as saying "someone high ranking in Beijing" had offered to resolve two vexing issues — a lawsuit by a Taiwanese businessman and Las Vegas Sands' request for permission to sell luxury apartments in Macau. Another email from Alves said the problems could be solved for a payment of $300 million. There is no evidence the offer was accepted. Both issues remain unresolved.

Breaking news today is that the Las Vegas based Sands Casino operation after an internal audit has admitted that bribes were paid in violation of the Foreign Corrupt Practices Act. In Filing, Casino Operator Admits Likely Violation of an Antibribery Law – NYTimes.com:

The Las Vegas Sands Corporation, an international gambling empire controlled by the billionaire Sheldon G. Adelson, has informed the Securities and Exchange Commission that it likely violated a federal law against bribing foreign officials.

In its annual regulatory report published by the commission on Friday, the Sands reported that its audit committee and independent accountants had determined that “there were likely violations of the books and records and internal controls provisions” of the Foreign Corrupt Practices Act.

The disclosure comes amid an investigation by the Securities and Exchange Commission as well as the Department of Justice and the Federal Bureau of Investigation into the company’s business activities in China.

It is the company’s first public acknowledgment of possible wrongdoing. Ron Reese, a spokesman for the Sands, declined to comment further.

The company’s activities in mainland China, including an attempt to set up a trade center in Beijing and create a sponsored basketball team, as well as tens of millions of dollars in payments the Sands made through a Chinese intermediary, had become a focus of the federal investigation, according to reporting by The New York Times and The Wall Street Journal in August.

* * *

The Sands’ activities in China came under the scrutiny of federal investigators after 2010, when Steven C. Jacobs, the former president of the company’s operations in Macau, filed a wrongful-termination lawsuit in which he charged that he had been pressured to exercise improper leverage against government officials. He also accused the company of turning a blind eye toward Chinese organized crime figures operating in its casinos.

* * *

As he maneuvered to enter Macau’s gambling market, Mr. Adelson, who is well known in the United States for his financial and political clout, became enmeshed in often intertwining political and business dealings. At one point he reportedly intervened on behalf of the Chinese government to help stall a House resolution condemning the country’s bid for the 2008 Summer Olympics on the basis of its human rights record.

In 2004, he opened his first casino there, the Sands Macau, the enclave’s first foreign owned gambling establishment. This was followed by his $2.4 billion Venetian in 2007.

Some Sands subsidiaries have also come under investigation by Chinese authorities for violations that included using money for business purposes not reported to the authorities, resulting in fines of over a million dollars.

The weak AP report at the Washington Post is here. Casino operator Las Vegas Sands says it likely violated US law prohibiting foreign bribes.

The issue I care most about is not addressed in today's report: did Sheldon Adelson launder campaign contributions from foreign nationals through his casino operations? (It is unlawful for foreign nationals to make contributions to American campaigns). From my earlier post, Exhibit 'A' in the case to overturn Citizens United – Sheldon Adelson trying to buy the American presidency with foreign money:

At least one prominent Republican has expressed concern about the source of Adelson's campaign contributions. "Much of Mr. Adelson's casino profits that go to him come from his casino in Macau," Sen. John McCain noted in an interview last month with the PBS "NewsHour."

"Maybe in a roundabout way, foreign money is coming into an American political campaign," said McCain, an Arizona Republican.

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From FactCheck.org : The Chamber and Foreign Contributions:

Chinese chamber It is still illegal for a foreign national to make a contribution to a candidate in a federal, state or local election. And the term "foreign national" includes foreign corporations. A "foreign national" is a foreign government, political party, corporation, association or partnership, or a person with foreign citizenship who does not have a green card (permission from the U.S. government to reside here permanently).

The ban is quite broad. The law not only forbids foreign nationals from making contributions, but also prohibits them from spending money in connection with an election, either directly or indirectly. It’s also illegal for anyone to receive such a contribution, to solicit one or to help a foreign national violate the prohibition.

The general ban dates back to 1966 amendments to the Foreign Agents’ Registration Act, according to the Federal Election Commission; the intent was to prevent other countries from influencing U.S. elections. It was incorporated into the Federal Election Campaign Act in 1974 amendments.

"The mere commingling of foreign and U.S. funds might not be illegal under FEC regulations. . . a 1992 advisory opinion issued by the FEC (AO 1992-16), allowing the wholly owned U.S. subsidiary of a Japanese company to make corporate donations to state and local candidates in Hawaii, provided that the U.S. firm could show that it had enough funds from its domestic operations to cover the gifts."

Your move, Senator McCain.

Sheldon Adelson should be banned from contributing to political campaigns until there has been a forensic audit of his casino operations and the question of comingling of assets and money laundering of foreign nationals' campaign contributions has been satisfactorily answered. The man should be considered toxic. No candidate or PAC should accept his money.

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