On the eve of a pivotal Nevada Supreme Court hearing last year in Sheldon Adelson’s nasty legal battle with Steven Jacobs, the former head of his Macau casinos, the state’s top law enforcement officer met with the chief regulator of the state’s largest industry, Adelson’s industry, to try to prevail on him to intervene in the case on behalf of the gaming tycoon.
Now, a top Nevada lawmaker, who subpoenaed a secret tape recording of their conversation, wants the Legislature to investigate.
“The information is unsettling and warrants a hearing,” said Maggie Carlton, who chairs the state Assembly’s Ways and Means Committee. “We will work with the chairman of the Gaming Control Board to bring more light to this situation.”
The chairman in question, A.G. Burnett, has since acknowledged in an affidavit that at the time he was “shocked and in disbelief” that Attorney General Adam Laxalt wanted him to accede to a request by Las Vegas Sands?and backed up by Adelson personally?that the Control Board file an amicus brief with the court arguing that an internal LVS report in the possession of the Control Board and sought by Jacobs’ attorneys should be kept confidential.
The agency refused. “Any such brief would constitute unwarranted and unjustified interference in the contentious litigation,” Burnett said, according to the affidavit, and would “not be genuine because the GCB had no interest in the case.”
It was April 2016, and the Supreme Court was scheduled to hear a request by Sands attorneys to remove state District Judge Elizabeth Gonzalez from the Jacobs case, which was in its fifth year and wasn’t going well for Adelson and LVS, for which they mostly blamed Gonzalez.
The company had fired Jacobs as Sands China CEO in 2010. He sued for wrongful termination, claiming he was let go for refusing to engage in illegal activities amounting to bribery and blackmail, which he said originated with Adelson. LVS initially wanted the case tried in Macau, the former Portuguese colony whose notoriously amenable justice system would be likely to rule for the company, which was investing billions in the territory at the time. Much to the company’s dismay the case stayed in Nevada, where LVS is headquartered and where Jacobs wanted it, and under the gavel of Gonzalez, whose rulings on a lot of thorny arguments over evidence and disclosure so angered LVS that reporters for the Las Vegas Review-Journal were ordered to “monitor” her. Adelson had bought the newspaper, though no one knew it at the time.
Meanwhile, Jacobs’ allegations had sparked investigations into LVS’ foreign business dealings by the U.S. Justice Department, the U.S. Securities and Exchange Commission, and the Nevada Gaming Control Board, whose legal representation is the state Attorney General’s Office.
It was in response to the Control Board’s investigation that the Sands internal report was compiled. The board, in turn, had shared the report with the federal investigations, which, as far as Burnett had been advised, meant it was discoverable by Jacobs’ legal team. Nonetheless, LVS didn’t want Jacobs’ lawyers to see the report, and by the time Laxalt began urgently texting Burnett for a sit-down ahead of that critical Supreme Court date, the regulator was well aware that Laxalt was talking to LVS about the sought-after brief and was thoroughly alarmed at what appeared to be a blatant conflict of interest on Laxalt’s part. He also had the advice of one of Laxalt’s own deputies not to involve the Control Board in the case.
Ultimately, in Burnett’s view it was no less than the Control Board’s storied integrity at stake, built in no small degree on its independence from the companies and individuals it licenses and oversees. Burnett was so alarmed that when he did agree to hear Laxalt out in a hastily arranged meeting in a coffee shop he taped the conversation without Laxalt’s knowledge. And, again, he refused to allow the board to take sides.
“I believe that if I, or someone in my position as chairman, had agreed to file such a document (i.e. the amicus brief) before the District Court under the above-described circumstances, the foundation of gaming regulation in Nevada, and the reputation of the state as a whole, would have been harmed,” he said.
Concerned also that Laxalt might have crossed criminal lines, Burnett give a copy of the tape to the FBI. Republicans in the Legislature now want to hear it, too. Its contents, as yet, have not been publicly disclosed.
The federal investigations triggered by the Jacobs case would result in hefty fines against LVS. The Supreme Court would refuse to remove Gonzalez from the case, and in May of last year, LVS settled with its former executive for $75 million.
Laxalt has cast his actions as routine constituent service that’s been blown out of proportion by his political opponents. Which is true, to the extent that he is a Republican and Carlton, whose district is in Las Vegas, is a Democrat.
Then there is the fact that Laxalt wants to be the next governor of Nevada, and Adelson, whose spending on behalf of Republicans and the Republican Party became legendary after he blew upwards of $100 million to try to prevent Barack Obama’s 2012 re-election, is Laxalt’s biggest donor?which certainly qualifies him as a constituent.
According to local news reports, the billionaire, his wife, various family members and his casinos have reported giving $100,000 to Laxalt’s “Morning in Nevada” PAC since it was established in 2015. They also gave $55,000 to his 2014 election campaign. And Laxalt’s former campaign manager is a longtime Sands lobbyist.
The attorney general, considered the front-runner for the governor’s mansion, raised more than $1.1 million for his campaign over the course of 2016 and had roughly $1.5 million in available cash at the end of the year, according to local news reports. He has scheduled major fund-raisers later this month with heads of the Republican Governor’s Association in Las Vegas and a Washington D.C., event hosted by Chicago Cubs part-owner Todd Ricketts, another major Republican donor.
