The Man Behind Gingrich's Money

By Mike McIntire and Michael Luo, The New York Times

29 January 12

he trip to Jordan by a group of United States congressmen was supposed to be a chance for them to meet the newly crowned King Abdullah II. But their tour guide had a more complicated agenda.

The guide was Sheldon Adelson, a Las Vegas casino magnate who helped underwrite trips to the Middle East to win support for Israel in Congress. On this occasion in 1999, as the lawmakers enjoyed a reception at the Royal Palace in Amman, Mr. Adelson and an aide retreated to a private room with the king.

There, the king listened politely as Mr. Adelson sat on a sofa and paged through his proposal for a gambling resort on the Jordan-Israel border to be called the Red Sea Kingdom.

"This was shortly after his father, King Hussein, died, and he was grateful to me," Mr. Adelson explained later in court testimony, recalling that he had lent his plane when the ailing monarch sought treatment in the United States. "So they remembered."

The proposal never went anywhere - Mr. Adelson later said he had feared that a Jewish-owned casino on Arab land "would have been blown to smithereens." But his impromptu pitch to the Jordanian king highlights the boldness, if not audacity, that has propelled Mr. Adelson into the ranks of the world's richest men and transformed him into a powerful behind-the-scenes player in American and international politics.

Those qualities may also help explain why Mr. Adelson, 78, has decided to throw his wealth behind what had once seemed to be the unlikely presidential aspirations of Newt Gingrich. Now, in no small measure because of Mr. Adelson's deep pockets, Mr. Gingrich is locked in a struggle with Mitt Romney heading into Florida's Republican primary on Tuesday.

Mr. Adelson, by some estimates worth as much as $22 billion, presides over a global empire of casinos, hotels and convention centers whose centerpiece is the Venetian in Las Vegas, an exuberant monument to excess with canals, singing gondoliers and acres of slot machines. That fortune is a wellspring of financial support for Mr. Gingrich, who has benefited from $17 million in political contributions from Mr. Adelson and his wife, Miriam, in recent years, including $10 million in the last few weeks that went to a "super PAC" supporting him.

The question of what motivates Mr. Adelson's singular generosity toward the former House speaker has emerged front and center in the campaign. People who know him say his affinity for Mr. Gingrich stems from a devotion to Israel as well as loyalty to a friend. A fervent Zionist who opposes any territorial compromise to make way for a Palestinian state, Mr. Adelson has long been enamored of Mr. Gingrich's full-throated defense of Israel.

In December at an event in Israel for a charity he supports, Mr. Adelson made a point of endorsing Mr. Gingrich's assertion that the Palestinians have no historic claim to a homeland.

"Read the history of those who call themselves Palestinians and you will hear why Gingrich said recently that the Palestinians are an invented people," Mr. Adelson said at the event for Birthright Israel, which takes young Jews on trips there.

Mr. Adelson is hardly a household name. He avoids the limelight and rarely speaks to the press, remaining something of an enigma. He declined to be interviewed for this article, but he and his wife issued a statement saying friendship and loyalty are "our motivation for helping Newt."

Through interviews and a review of Mr. Adelson's testimony in legal disputes with former associates, a portrait emerges of a formidable and determined striver who lifted himself out of childhood penury in working-class Boston. He has a sentimental streak - on one of his first trips to Israel, he wore the shoes of his late father, a cabdriver from Lithuania who was never able to visit there - and he has given hundreds of millions of dollars to Jewish causes, medical research and injured veterans.

But his rise has not been without controversy. The Justice Department is investigating accusations by a former casino executive that Mr. Adelson's operations in Macao may have violated federal laws banning corrupt payments to foreign officials. Also, a Chinese businessman accused Mr. Adelson of reneging on an agreement to share profits from the Macao project.

Mr. Adelson also has a reputation for irascibility and has left a trail of angry former business associates. Even his two sons sued him at one point, accusing him of cheating them, though they lost. He filed a libel suit against a Las Vegas newspaper columnist, John L. Smith, who eventually had to declare bankruptcy, and he waged a bitter court battle with a former employee whom he accused of spreading lies about him.

Nevertheless, his concern for his image was apparent in a deposition he gave in a court case, which also hints at the risk for Mr. Gingrich in accepting so much financial help from Mr. Adelson.

Complaining that negative things said about him were winding up in news articles, Mr. Adelson said his charitable donations had "been rejected a couple of times" because of the bad publicity: "Nobody ever says in such an article: ‘Oh, he's a very nice guy. He helps old ladies across the street. He pets dogs behind the ears. He's a hugely charitable person. He gives away hundreds of millions of dollars.' "

Early Ambition

Mr. Adelson likes to recount how his first business breakthrough came when, at age 12, he bought a newsstand in downtown Boston, eventually parlaying his earnings into a brief teenage career operating candy machines.

After high school, he had stints working as a mortgage banker, running a business packaging toiletries for hotels and operating a charter travel company. But he hit the jackpot with a computer trade show, Comdex, which he started in Las Vegas in 1979. Comdex became the signature annual event for the computer industry, attracting more than 200,000 visitors at its peak.

Jason Chudnofsky, who knew Mr. Adelson growing up in Dorchester, Mass., and became chief executive at Comdex, said his friend always had outsize ambition. He recalled Mr. Adelson's telling him decades ago that one day they would be "talking to ministers" and heads of state.

"He was thinking big even back then," Mr. Chudnofsky said.

Big thinking led Mr. Adelson to set his sights on a project that would transform both the Las Vegas casino trade and his own life in ways that seem to have surprised everybody but him.

In 1988, Mr. Adelson and his partners bought the historic Sands Hotel and Casino and built a convention center to accommodate their thriving trade show. Eight years later, after they sold Comdex for $862 million, Mr. Adelson used his profits on a risky new venture: tearing down the aging Sands and spending $1.5 billion to develop a lavish hotel and casino modeled after Venice.

Accepted wisdom had it that building both a hotel-casino and a convention center was a money loser. Mr. Adelson proved otherwise. As his reputation as a successful developer grew, he explored opportunities for overseas expansion. But his attempts to build a casino in Israel met resistance despite his connections, according to court records.

"I went to see the chief rabbi," Mr. Adelson testified in 2009 in a lawsuit he brought against a former employee. "There was no chance the religious bodies were going to allow a casino in Israel."

He turned his attention to Asia. China in 1999 reclaimed the former Portuguese colony of Macao, and a few years later ended a casino monopoly that had existed for many years. Mr. Adelson's company, the Las Vegas Sands Corporation, bid for one of the licenses offered by the Chinese and won, leading to the opening of the $240 million Macao Sands in 2004.

The resort was so successful that its first-year profits exceeded the cost of the project, according to industry analysts. Mr. Adelson, who was also building a casino in Singapore, was riding high. But with so much money on the line, disputes arose with former associates looking for a share of the profits.

He was sued by a Hong Kong businessman, Richard Suen, who said he had been promised a "success fee" for introducing Mr. Adelson and his team to Chinese officials. A jury awarded Mr. Suen $44 million, but the award was overturned on appeal and the case sent back for a retrial, which is still pending.

In his suit, Mr. Suen asserted that while visiting Beijing in 2001, Mr. Adelson had been asked to use his influence in Congress to derail a human rights resolution that Chinese officials feared could complicate their bid to host the Olympic Games. Mr. Adelson acknowledged calling several congressmen, including Tom DeLay, who was the House majority whip at the time, but he and Mr. DeLay denied undermining the bill, which died in committee.

Still, a Sands executive testified that he had relayed a message to the Chinese taking credit for it.

The most damaging accusations have been made by a former Sands executive, Steve Jacobs, who sued after being fired in 2010. He alleges that he was pressed to exert "improper leverage" with Macao government officials to get approvals needed by the company, which Sands officials have denied. His assertions are now the subject of the federal investigation.

Passion for Israel

When Mr. Adelson appeared at the Birthright event in December and spoke approvingly of Mr. Gingrich, he had earned his place on the stage by virtue of his donations to the organization - more than $100 million in all.

He is also the single largest donor to Yad Vashem, Israel's Holocaust memorial and museum, with gifts totaling $50 million. Mr. Adelson's generosity to Jewish causes is especially striking given that for most of his life he was relatively uninvolved in that world.

Mr. Adelson's business partners in his early days at Comdex were all much more active in Jewish affairs. But friends say Mr. Adelson experienced something of an awakening after his first visit to Israel in 1988, when he was in his mid-50s.

"He fell in love with the country," said Ted Cutler, an early business partner.

This coincided with his divorce from his first wife, Sandra. Not long after his trip, he encountered a friend, Sara Aronson, at a Boston restaurant. Mr. Adelson talked excitedly of Israel and mentioned that he was interested in meeting Israeli women, Ms. Aronson recalled.

Ms. Aronson introduced him to her best friend, Dr. Miriam Ochshorn, a divorced physician from Israel in her 40s who was completing a fellowship in addiction medicine at Rockefeller University in New York. As it turned out, Mr. Adelson's two sons from his previous marriage both struggled with drugs. One would die in 2005.

After the couple married in 1991, Mr. Adelson's visits to Israel became so frequent that he told friends he was contemplating settling there. His increasing wealth gave him the means to make a lasting imprint on causes important to him and his wife, including the establishment of drug treatment centers in the United States and Israel.

He also became one of the biggest donors to the American Israel Public Affairs Committee, the powerful pro-Israel lobby, and joined its executive committee.

Friends point out that his staunch Zionist beliefs are consistent with his take-no-prisoners personality. They also said the views of his wife, who had lived through so much tumult in Israel, including the 1967 war, undoubtedly helped shape his.

Over time, Mr. Adelson made his conservative views felt not only within the committee, but also in Israel. He started a free daily newspaper in 2007, Israel Hayom, that is widely viewed as supportive of Prime Minister Benjamin Netanyahu, a close friend who shares his hawkish outlook.

Ehud Olmert, who was prime minister from 2006 to 2009, got a taste of the newspaper's treatment of politicians who fall short of Mr. Adelson's expectations. He and Mr. Adelson had been friendly, he said, but grew distant after Mr. Olmert tried to negotiate a two-state solution with Mahmoud Abbas, the president of the Palestinian Authority.

"Once, after I was already prime minister, he asked to come see me with his wife, Miri," Mr. Olmert recalled in a telephone interview. "He already had his newspaper, and every day it attacked me viciously.

"Toward the end of our meeting, I asked him, ‘Aren't you ashamed of what your paper is doing to the prime minister?' " Mr. Olmert said, referring to himself. "He said, ‘I don't read Hebrew.' And Miri said, ‘I do, and I must tell you that we are very aggressive against him.' "

Mr. Olmert added that he had heard from senior American officials that Mr. Adelson had advocated firing Condoleezza Rice as secretary of state and getting rid of Mr. Olmert because both were "betraying Israel."

Shared Conservatism

As Mr. Adelson was experiencing his awakening on Israel, Mr. Gingrich was ascending the Republican ranks. He was also endearing himself to stalwart supporters of Israel.

In early 1995, newly elected as speaker of the House, Mr. Gingrich caused a stir when he called for moving the United States Embassy from Tel Aviv to Jerusalem. He later backed legislation endorsing the move. It was at a reception celebrating the measure that Mr. Gingrich first met Mr. Adelson, according to an associate of Mr. Adelson.

From then on, Mr. Adelson was among a cadre of pro-Israel advocates with whom Mr. Gingrich had regular interactions. The casino magnate also frequently lent his Gulfstream jet to Mr. Gingrich for cross-country trips, a former Gingrich adviser recalled.

Beyond Israel, the two men shared a conservative philosophy on matters important to Mr. Adelson's businesses, including limiting the ability of labor unions to deduct money from members' paychecks for political activities.

Mr. Gingrich also backed legislation sought by casino owners in 1998 to preserve tax deductions beneficial to the industry. That same year, Mr. Adelson hosted a Republican fund-raiser at one of his Las Vegas venues, headlined by Mr. Gingrich, and donated $300,000 to the party for the midterm elections.

Getting Involved

In 2006, when Mr. Gingrich began laying the groundwork for a possible run for the presidency, Mr. Adelson provided $1 million in seed money for his political committee, American Solutions for Winning the Future. Mr. Adelson donated an additional $2 million the next year; his contributions to the group have totaled more than $7 million.

During the 2008 election cycle, Mr. Adelson became recognized as a top-tier donor to the right and a moneyed villain to the left. He was the primary financier of a conservative nonprofit group, Freedom's Watch, which trumpeted plans to spend as much as $200 million on the presidential election. Those plans, however, fizzled as internal problems paralyzed the organization, with Mr. Adelson micromanaging the group's efforts, Republican operatives familiar with the organization said at the time. The group still spent about $30 million through early 2008, almost all of which came from Mr. Adelson, according to the operatives.

Today, the Venetian and the adjoining Sands Convention Center have become default destinations for Republican events in Las Vegas.

"I call it the Republican headquarters on the Strip," said Jon Ralston, the political columnist for The Las Vegas Sun.

The Venetian will also be the official headquarters hotel for Saturday's Nevada presidential caucuses. And in deference to observant Jews, the Clark County Republican Committee has scheduled a special caucus on Saturday night at the Adelson Educational Campus, a Jewish school financed by the Adelsons, six hours after the rest of the state is done caucusing.

When it came time to picking sides for this year's Republican presidential nomination, Mr. Adelson made clear to friends early on that if Mr. Gingrich decided to run, he would back him. When Mr. Gingrich's campaign faltered, friends who supported other candidates put pressure on Mr. Adelson to stay out of the race.

Nevertheless, Mr. Adelson made an initial $5 million contribution to Winning Our Future, a pro-Gingrich super PAC, before the South Carolina primary, which proved pivotal in Mr. Gingrich's victory there.

Fred Zeidman, a Texas energy executive active in Jewish and Republican circles, said he talked to Mr. Adelson early last week, before it became public that Mrs. Adelson, 66, had also donated $5 million to the super PAC. Mr. Adelson told his friend that he was going to give more money and seemed to signal that he was willing to keep it flowing.

"I think what he's trying to say is, ‘Newt ain't going away, and I'm going to make sure of it,' " Mr. Zeidman said.

Reporting was contributed by Adam Nagourney from Las Vegas, Ethan Bronner and Isabel Kershner from Israel, and Keith Bradsher from Hong Kong.