Sheldon Adelson’s Purchase of Las Vegas Paper Seen as a Power Play
LAS VEGAS — Two days after Sheldon Adelson’s
lawyers lost in their attempts to have a judge removed from a
contentious lawsuit that threatens his gambling empire, a call went out
to the publisher of this city’s most prominent newspaper.
Almost
immediately, journalists were summoned to a meeting and told they must
monitor the courtroom actions of the judge and two others in the city.
When the journalists protested, they were told there was no choice in
the matter.
It
is unclear whether Mr. Adelson, who was then in talks to buy the
newspaper, The Las Vegas Review-Journal, or his associates were behind
the directive or even knew about it. But it was an ominous coincidence
for many in the city who worry what will become of the paper now that it
is owned by Mr. Adelson, a billionaire casino magnate and prominent
Republican donor with a history of aggressively pursuing his interests.
Suspicions
about his motives for paying a lavish $140 million for the newspaper
last month are based on his reputation in Las Vegas as a figure
comfortable with using his money in support of his numerous business and
political concerns, said more than a dozen of the current and former
Review-Journal staffers and local civic figures who have worked closely
with him.
“I
find it hard to believe that he would have so dramatically overpaid for
that paper without having some agenda in mind,” said Jon Ralston, a
columnist and the host of “Ralston Live,” a political television show in
Las Vegas.
In
a statement, Mark Fabiani, a crisis management expert and a spokesman
for Mr. Adelson, compared his purchase of The Review-Journal to those of
the billionaires John Henry, who bought The Boston Globe, and Jeff
Bezos, who bought The Washington Post, in recent years. Questions are
always raised when a billionaire buys a paper, he said. “But over time
these questions are answered, and in the end the newspapers often
benefit from the financial strength that new owners provide.” For a
week, Mr. Fabiani repeatedly declined to respond to questions about
whether Las Vegas judges were discussed during sales talks. But he said
in a written statement that The Review-Journal had reported on business
cases before Mr. Adelson was involved, and the newspaper did not publish
any articles based on the journalists’ monitoring of the judges.
Asked
about concerns that Mr. Adelson sought to influence matters in the
city, Mr. Fabiani said that Mr. Adelson “has more personal money
invested in Nevada than pretty much anyone else, and so he is
understandably heavily involved in all aspects of the Las Vegas
community.”
For
five years, Mr. Adelson and his lawyers have frequently clashed with
Elizabeth Gonzalez, the judge overseeing a lawsuit against his gambling
company, which involves allegations by a former executive of bribes to
officials in Macau, where it operates a casino, and the possible
presence there of organized crime.
The
case, which is being heard in Clark County District Court, could have
significant repercussions for Mr. Adelson’s future in the gambling
industry, and his high-priced legal team has fought it vigorously.
On
Nov. 4, with Mr. Adelson already in talks to buy The Review-Journal,
the Nevada Supreme Court rejected a request from Sands China to have
Judge Gonzalez removed from overseeing the lawsuit. The company said
that rulings and comments made by Judge Gonzalez in court reflected a
bias against Mr. Adelson and Sands.
Judge
Gonzalez has twice sanctioned Mr. Adelson’s team, finding that it had
failed to disclose information and ignored one of her orders. Once,
while Mr. Adelson was giving testimony, she admonished him for
disagreeing with her when she instructed that he answer a question,
saying, “You don’t get to argue with me.”
The
case Judge Gonzalez is overseeing started in 2010 when the former chief
executive of Sands’ operation in Macau, Steven C. Jacobs, filed a
wrongful termination lawsuit, claiming he was fired for refusing to
carry out orders from Mr. Adelson that he said he believed were illegal,
including payments to local officials that might violate the Foreign
Corrupt Practices Act. Mr. Adelson and Las Vegas Sands have insisted
that they did nothing wrong and that Mr. Jacobs was fired for cause and
is seeking money he does not deserve.
If
the allegations raised in the lawsuit prove true, they could have
significant consequences for Mr. Adelson and Sands because Nevada law
bars casino owners from, among other things, associating with members of
organized crime. Mr. Adelson and his company have rejected the claims,
but the lawsuit prompted the Securities and Exchange Commission and the
Justice Department to open investigations into Las Vegas Sands. In a
recent S.E.C. filing, Sands said it was cooperating with federal
investigations but could not predict their outcomes or potential impact.
Mr. Adelson has spoken of his interest in buying The Review-Journal,
which has a circulation of just under 200,000 and is an influential
voice among civic leaders, for several years, according to those with
knowledge of his relationship with the paper. Journalists here worry
that there is no shortage of issues, including the lawsuit, that they
will feel pressured to cover differently.
Among
other things, Mr. Adelson is a fierce opponent of loosening marijuana
regulation, which will be on the Nevada ballot in 2016, and of online
gambling, which remains an active issue in the state. He is also
involved in other contentious lawsuits that have been the subject of
critical media coverage.
The
Review-Journal has a libertarian bent, and its editorial page agrees
with Mr. Adelson on some issues. But it has also been unstinting in its
news coverage of him, including articles on the lawsuit being overseen
by Judge Gonzalez.
The
paper’s publisher, Jason Taylor, now requires reporters and editors to
get written permission before any article regarding The Review-Journal
or Mr. Adelson’s purchase of it is published.
It
is not clear whether Mr. Taylor has been instructed to do so, and he
declined to comment. Nor was it clear, staff members said, whether Mr.
Adelson and his family had been directly orchestrating matters since the
sale. It could be the case, they said, that the paper’s management or
Mr. Adelson’s aides had been acting pre-emptively to satisfy what they
thought Mr. Adelson, known to be a demanding and exacting man, may have
wanted.
He
rose to prominence in the city as the combative, litigious owner of the
Sands Casino, and a political kingmaker. Forbes has estimated his net
worth at about $25 billion, and he travels with an entourage of
bodyguards. He is a generous backer of both local and national
politicians, and puts his considerable resources toward local and
national issues about which he feels strongly.
“When
you have all the marbles, you can make the calls,” said Carolyn
Goodman, the mayor of Las Vegas. “And he has all the marbles.”
On
Dec. 10, a deal for The Review-Journal arranged by Mr. Adelson’s
son-in-law closed, leaving the sellers, a company managed by the
investment group Fortress, with an estimated gain of nearly $60 million.
It was done through a recently incorporated Delaware company fronted by
a small publisher of newspapers in Connecticut, Michael E. Schroeder,
and Mr. Adelson and his family did not acknowledge that they were the
buyers until news reports revealed them to be.
Many
in the city remain concerned about the state of journalism there. The
other prominent local newspaper, The Las Vegas Sun, runs as an insert in
The Review-Journal as part of a joint operating agreement. “Without
wishing to speak ill of The Sun,” said James DeHaven, a reporter who
left The Review-Journal, “The Review-Journal is the source of robust,
independent reporting in Las Vegas. As it goes, so goes good journalism
in Southern Nevada.”
Some
have looked to Israel, where Mr. Adelson owns a free national newspaper
called Israel Hayom, as a potential guide to his intentions. The paper
was founded in 2007 and has been accused of supporting the conservative
positions of Benjamin Netanyahu, then the leader of the parliamentary
opposition and now Israel’s prime minister, and of using Mr. Adelson’s
billions to undercut its competitors. Mr. Adelson and Israel Hayom
insist that it offers unbiased coverage.
Within
Las Vegas, says Michael Green, an associate professor of history at the
University of Nevada Las Vegas, Mr. Adelson seems to expect an
increasing political power, commensurate with his staggering wealth. He
may also be taking political clashes more personally, Mr. Green said.
Mr.
Adelson’s first foray into local politics came in 1996, when he helped
oust a Democrat from the Clark County Commission, which has jurisdiction
over the Las Vegas Strip. In 1998, he became more involved,
contributing more than $2 million to an effort to defeat three Democrats
on the commission. All three, however, won re-election.
Another
political target the same year seemed more personal: Shelley Berkley,
formerly a top aide to Mr. Adelson at the Sands Corporation, was running
her first campaign for Congress. Previously, Ms. Berkley has said,
Mr. Adelson had suggested that he would back her if she switched
parties and ran as a Republican. Instead, he fired her in 1997, after
she suggested he make contributions to judges to curry favor.
Mr.
Adelson donated to Ms. Berkley’s opponent and to committees that
attacked her in TV ads. She won anyway. Despite her support of Israel — a
signature issue for Mr. Adelson — he continued to oppose her during her
14 years in the House and sent millions to the super PAC that fought against her in her losing Senate campaign in 2012.
In
2014, when Judge Gonzalez stood for re-election, associates of Mr.
Adelson apparently tried to recruit candidates to unseat her. David
Thomas, a political consultant who worked on that campaign for Judge
Gonzalez, said that two people told him separately that associates of
Mr. Adelson had approached them to see if they would run against her.
The
lawsuit that Judge Gonzalez is overseeing is far from Mr. Adelson’s
first court case. Former employees have sued him, contending that he
discriminated against them. And he has filed a series of defamation
claims over the years, including one against The Daily Mail and another
against a reporter for The Wall Street Journal. He also sued a columnist
for The Review-Journal, John L. Smith, for defamation over a book Mr.
Smith had written. Mr. Smith, who filed for bankruptcy while defending
himself, later wrote that his lawyer told him the case was “about making
me an object lesson for my newspaper and other journalists who dared to
criticize the billionaire.” (Mr. Adelson eventually dropped the case.)
While
several of those suits were settled out of court or dropped, Mr.
Adelson won damages against The Daily Mail and is still pursuing his
action against the Wall Street Journal reporter.
But even many of those with whom he has occasionally clashed in the city express a kind of admiration for him.
“Sheldon is Sheldon,” Ms. Goodman, the mayor, said. “He’s a strong personality.”
She added: “But I’ve never been intimidated by him. I feel comfortable with him.”
Ms.
Goodman says she is trying to persuade Mr. Adelson to develop property
the city owns. Despite questions about how he might use the newspaper,
she said she was optimistic.
“I’m very excited he’s done it,” she said. “In another couple of months, I may say, ‘Oh my gosh, why did I ever say that?’ ”
Ravi Somaiya and Ian Lovett
reported from Las Vegas and Barry Meier from New York. Sydney Ember
contributed reporting from New York and Isabel Kershner from Jerusalem.
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