Why Steve and Sheldon are Making a Mistake

If you want to disprove the old adage that the worst publicity is no publicity, consider this headline from a left-leaning website: “Biggest Donor to Romney and GOP did Business With Chinese Mob.”

The subject of the headline was Sheldon Adelson, whom Forbes calls the largest American investor in China. ProPublica, in partnership with the PBS documentary series Frontline, investigated Adelson’s road to success in Macau, accessing internal documents. They said Adelson and/or Las Vegas Sands may have violated the Foreign Corrupt Practices Act, which prohibits American companies from paying foreign officials “to affect or influence any act or decision”—and that Adelson was very much “a hands-on manager.”

Further, the report says Las Vegas Sands had “difficulty in avoiding contact with Chinese organized crime figures as it built its casino business in Macau.”  Nevada state investigators now are determining whether Adelson’s company broke a rule against associating with those connected to organized crime. Adelson claims the whole thing is the work of unhappy former employees out to blackmail Las Vegas Sands.

But even Sen. John McCain, R-Ariz., the supposed high priest of campaign- finance reform,
questioned Adelson’s story. “Much of Mr. Adelson’s casino profits that go to him come from his casino in Macau. … Maybe in a roundabout way, foreign money is coming into an American political campaign.”

Which brings us to Steve Wynn. Never one to let another casino operator hog the headlines, Wynn, Politico reports, has become a big supporter of Crossroads GPS, the advocacy group founded by Karl Rove, who once was almost overcome with the inclination to tell the truth but suppressed the impulse. Wynn and Rove have become close friends—probably closer than Wynn was back in 1996 to GOP presidential hopeful Bob Dole, whose large donations from these parts inspired the nickname “Vegas Bob.” If only Rove hadn’t lived in Sparks, he could have been Vegas Karl.

The point is, Wynn also makes a significant amount of money from Macau.  Would he face a similar question about foreign money? Would he care? He might if it led to an investigation of his activities in Macau.

Historically, Wynn has had much better public relations sense than Adelson has. But Wynn even
has suggested that Obama is a socialist, and he normally is smarter than that. His and Adelson’s actions and comments raise a couple of points.

One is that, historically, casino operators tried to fly under the radar. They operated a business legal here but illegal everywhere else and viewed as a sin in many quarters. The sin part has changed a bit and the legality part has changed a lot, and Wynn certainly has liked attention. But many liberals (Wynn thinks that’s Obama) think gambling is the kind of bad behavior that needs more regulation, while many conservatives are uneasy about gambling or the idea that it might become too powerful or influential.

Two, one of those who disliked gambling and gamblers was Sen. Pat McCarran, D-Nev., who proceeded to block anti-gambling legislation to help his home state.  He told an editor friend, “I hope the time will come when the financial structure of the state of Nevada will not rest upon gambling. I hope the time will come when we point with pride to industries of all kinds in the state of Nevada, with payrolls that will sustain the economy of Nevada.” In other words, McCarran believed more strongly in economic diversification than most of today’s Nevada leaders do.

More to the point, McCarran once told Grant Sawyer, then a young law student under his patronage and later a two-term governor who dragged this state kicking and screaming into the 20th century, that no Nevadan could ever hope to run on the national ticket. Why? Gambling, he said. That question always will linger.

So, other industries invest in China and few seem to care. But Wynn and Adelson have bet big on China and that the leaders there will stick by them as they attack the leaders here. Now they have to hope that the financial juggernauts they have built—juggernauts that wouldn’t be so juggernauty without other people spending their money—won’t prove to be a very profitable house of cards that will collapse, partly through their own efforts.