Las Vegas — Billionaire Sheldon Adelson landed Chinese government support in his quest for a lucrative gaming franchise in Macao in 2001 after relaying assurances from a Republican Party boss that a congressional measure opposing Beijing’s bid for the 2008 Olympics would „never see the light of day,“ according to court testimony in a civil suit here.
The intelligence came out of a phone call between Adelson and then-U.S. Rep. and Majority Whip Tom DeLay (R-Texas). Adelson, owner of the Venetian hotel and casino and a longtime GOP contributor, was then in Beijing, conferring with government officials about their plans to expand the gaming and entertainment sector in Macao. The former Portuguese colony had been turned over to China in 1999.
Grateful Chinese authorities came to Adelson’s rescue at least twice thereafter when it appeared his bid was in jeopardy, according to testimony.
The role of that phone call in helping Adelson land a lucrative Macao gaming concession was disclosed in a civil suit brought by a Hong Kong middleman, Richard Suen, who took credit for introducing Adelson and his investment partners to key Chinese officials. Last month, a Las Vegas jury awarded Suen USD 43.8 million for what it concluded was his role in Adelson’s successful campaign for the Macao concession.
Suen said he had set up a series of meetings between Adelson and high-level Chinese officials in July 2001, only to get stiffed by Las Vegas Sands Inc., corporate owner of the Sands Expo and Convention Center and the Venetian on the Las Vegas Strip. Suen had sued for USD 100 million.
„We gave Mr. Adelson the opportunity to show his political power,“ Suen testified, adding, „We got them the license.“
In its verdict, handed up late last month after a six-week trial, the jury agreed that Suen played an essential, if somewhat nebulous, role in obtaining Sands‘ gaming license in Macao. Lawyers for the Las Vegas mogul vow to appeal.
Adelson, to be sure, can afford the financial toll. The 74-year-old founder and chairman of Las Vegas Sands ranked third on this year’s Forbes 400 list of richest Americans with a net worth, the magazine estimated, at USD 28 billion.
The son of a Boston cab driver made his fortune as owner of the fabled high-tech convention Comdex, selling it to Japanese investors for more than USD 800 million in 1995. He pioneered development of Las Vegas as a convention town, refashioning the Sands as a convention center and eventually converting it into the Venetian.
He also came to be a leading financial backer of the Republican Party. Public records show that Adelson, his wife Miriam and his corporation had contributed a combined USD 695,000 to Republican candidates and committees over the 12-year span before he pulled DeLay out of a Fourth of July barbecue in 2001 with a cellphone call from Beijing.
A few facts related to the still-murky affair are undisputed. One is that the Sands‘ 20-year concession to operate casinos in Macao is a gold mine. The company’s two Macao resorts — the Sands Macao, opened in 2004, and the Venetian Macao, opened last year — have generated nearly USD 4 billion in casino revenue to date. Sands is planning to spend USD 12 billion to open six more Macao resorts.
Another is that a 2001 congressional resolution opposing the Beijing Olympic bid vanished from the House of Representatives agenda days before the International Olympic Committee was scheduled to vote on the site of the 2008 Summer Games. That happened shortly after Adelson called DeLay to inquire about the measure.
Finally, it is clear that Las Vegas Sands took credit with the Chinese leadership for killing the resolution — instructing its Washington lobbyists to „suggest that we were involved in the process,“ a high-ranking Sands executive said in court.
Suen’s Los Angeles-based attorney, John O’Malley of Fulbright & Jaworski, contends that the move, or at least the Chinese perception, provided Adelson and Sands with a nearly bottomless reserve of „guanxi,“ a sort of personal networking built around an exchange of favors.
The keystone of the relationship was a trip to Beijing that Suen arranged for Adelson and his top lieutenant, Sands President William P. Weidner, in July 2001.
At the time, Macao’s reputation was that of „a seedy backwater of a gambling den,“ Adelson recalled from the stand. „Prostitution infested, crime infested . . . everything wrong that would never happen in a state like Nevada, ever.“
The Chinese leadership was pondering how to clean up its new possession. During an audience with Vice Premier Qian Qichen, Adelson and Weidner learned that the regime hoped to develop Macao into a major Southeast Asian entertainment and business destination. Officials were even willing to set aside their traditional antipathy to gambling to achieve that goal.
Adelson had a vision of Macao as „the Las Vegas of the East,“ Weidner testified. If that were to happen, Adelson’s convention, hotel and casino experience plainly would be a plus in the competition for the three licenses, or concessions, that were to be offered in 2002.
A more crucial meeting was with Liu Qi, then the mayor of Beijing and head of its campaign to win the Olympics. Criticism of China’s human rights record was threatening to derail the city’s bid, which was scheduled for an IOC vote a week later.
Chief among the regime’s concerns was a resolution in the House of Representatives urging U.S. Olympic officials to vote the bid down. Introduced by the late Rep. Tom Lantos (D-San Mateo), it had 52 co-sponsors, including DeLay and 20 other Republicans.
„Can you help us with the Olympics?“ Liu asked, according to Adelson’s testimony. „Under the category of not leaving any friendship stone unturned,“ Adelson said, „I made a few calls.“
One call was to DeLay, who said he personally favored the resolution. He also said he was about to confer with his fellow GOP House leaders. Three hours later, Weidner testified, DeLay called back to say that because of a logjam in the agenda, the Olympics resolution would be pushed off until after the IOC vote.
The thrust of his message, Weidner recalled, was: „You tell your mayor, it can be assured that this bill will never see the light of day.“
No evidence at the trial established that DeLay or the GOP leadership in the Republican-dominated House moved the bill back to help Adelson. DeLay’s representatives did not return calls this week.
Lantos took the floor on July 11, 2001 — two days before the IOC vote — to accuse then-Speaker J. Dennis Hastert (R-Ill.) and Majority Leader Richard K. Armey (R-Texas) of „bottling up this legislation.“
During the trial, however, a DeLay spokeswoman told the Las Vegas Review-Journal that House leadership killed the measure even before Adelson’s phone call.
It is unclear whether the resolution, which was not binding on U.S. Olympic officials, would have wrecked Beijing’s chances.
„Did the Chinese think that [Adelson] had been helpful in the Olympics? Yeah, I’m sure they did,“ defense attorney Rusty Hardin told the jury. „Did the Venetian people try to play on them thinking that? Of course, they did.“
Indeed, trial testimony suggested that Macao officials twice went out of their way to rescue the Sands bid from near certain failure: When it became clear that the company’s proposed financing partner, a bank with close connections to Taiwan’s ruling Kuomintang Party, would be unacceptable to the Chinese regime, Macao’s top administrative officer personally „married“ Sands to a more palatable partner — a hotel company owned by a wealthy Hong Kong family. When that alliance broke down, the authorities intervened again by offering Sands a separate concession.
In the end, for one of the coveted concessions, Sands beat out two American bidders with greater experience running casinos — MGM Mirage and a joint venture of Mandalay Bay Resorts (since acquired by MGM Mirage) and Park Place Entertainment. The others went to Stanley Ho, then the established Macao gaming magnate; Wynn Resorts; and Galaxy Entertainment, Sands‘ former Hong Kong partner.
Sands executives contend that their proposal for a string of mega-resorts was a perfect fit with Macao’s ambitions. They testified that Suen’s efforts had nothing to do with their victory and that they kept dealing with him for more than three years because he was a personal friend of Adelson’s brother Leonard.
But Suen countered, „We got them the license,“ he said, „because of my guanxi.“
For Adelson, Suen is not the last legal challenge arising from the Macao projects.
Three other middlemen who also claim to have helped arrange the gaming approvals have a separate lawsuit scheduled for trial in Las Vegas state court in December. The Suen verdict „will help us,“ said their lawyer, Donald Campbell, because it established that go-betweens with the Chinese are entitled to compensation.
Campbell’s clients are seeking at least USD 450 million.