LAS VEGAS, Nev. - The fired former chief executive of Las Vegas Sands Corp.'s Macau casinos alleges in court documents that billionaire Sheldon Adelson personally approved of prostitution and knew of other improper activity at his company's properties in the Chinese enclave.
Brad Brian, an attorney representing Las Vegas Sands Corp. and Sands China Ltd., said the allegations in documents revealed last week were false and "scurrilous." Brian claimed the claims had been included in the lawsuit brought by former Sands executive Steven Jacobs only to sensationalize the case.
Adelson, a billionaire philanthropist and casino mogul who owns the Venetian and Palazzo casinos on the Las Vegas Strip, also is a prominent political donor who gave $10 million in support of then-presidential hopeful Newt Gingrich and more recently has supported Mitt Romney's bid for the White House.
Jacobs was fired in July 2010 from his role overseeing the Macau properties. He sued the companies and Adelson three months later.
In the lawsuit, he accuses the company and Adelson of breach of contract and of pushing him into illegal activity in Macau, a former Portugese colony near Hong Kong where Sands has established a strong business presence. The company owns the Venetian Macao and Sands Macao casino resorts, the Plaza Macao hotel, restaurant and shopping complex and the newly opened Sands Cotai Central resort with three hotels and two casinos.
In documents revealed Thursday — including a sworn seven-page declaration that Jacobs submitted along with a summary from his attorneys of problems obtaining documents from Sands — Jacobs describes an effort he launched after arriving in Macau in May 2009 to rid the casino floor of "loan sharks and prostitution."
"This project was met with concern as (company) senior executives informed me that the prior prostitution strategy had been personally approved by Adelson," Jacobs said in the documents.
In his court filing, Jacobs alleges other documents that haven't been turned over include records of misuse of "blue card" work permits and the hiring of illegal workers in Macau; emails and records of Adelson controlling a "Chairman's Club" allowing favoured members, including known or suspected organized crime figures, exclusive access to Sands China's most luxurious accommodations; and email requests from Adelson to a Macau lawmaker who Jacobs said was hired as outside counsel after Jacobs was fired.
Las Vegas Sands spokesman Ron Reese said in a statement that allegations of misconduct and wrongdoing by Jacobs against the company and senior managers are baseless.
"Mr. Adelson has always objected to and maintained a strong policy against prostitution on our properties and any accusation to the contrary represents a blatant and reprehensible personal attack on Mr. Adelson's character," the statement said.
In court, Brian told Clark County District Court Judge Elizabeth Gonzalez that if Jacobs "truly believed that Mr. Adelson had approved prostitution, he would have resigned." Instead, Brian said, Jacobs was fired.
Nevada Gaming Control Board Chairman Mark Lipparelli wouldn't say whether the state regulatory agency is investigating Jacobs' claims against his former employer. The agency doesn't comment on probes, he said.
Jacobs' lawsuit has drawn interest from U.S. Justice Department and Securities and Exchange Commission investigators for possible violation of the Foreign Corrupt Practices Act, according to a filing with the SEC. The law bars American companies from paying foreign officials to "affect or influence any act or decision" for commercial benefit. No charges have been filed.
The company and Adelson deny wrongdoing. They say the investigations stem from allegations by Jacobs. Sands also alleges that Jacobs stole confidential documents that might contain trade secrets.
The case once was scheduled for trial this month, but evidentiary hearings have been postponed amid clashes between the two sides about trading information and documents.
The judge scheduled a July 13 hearing on possible sanctions against the company and its lawyers for failure to disclose to the other side and to her that some documents sought by Jacobs' legal team had been brought from Macau to the U.S. more than a year ago.