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Vegas mogul, Republican donor fires back at China prostitution claim

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April 12, 2012: In this file photo, Las Vegas Sands Chairman and CEO Sheldon Adelson speaks at a news conference for the Sands Cotai Central in Macau. (AP)

Las Vegas Sands Corp. chief and leading Republican political donor Sheldon Adelson is firing back at his former Macau casino executive's claim that Adelson personally approved prostitution at company properties in the Chinese gambling enclave.

In court documents filed in state court in Las Vegas, Adelson and Sands attorneys accuse fired Sands China Ltd. executive Steven Jacobs of "a new low" in what they call an ongoing effort to tarnish Adelson's reputation and call attention to Jacobs' lawsuit claiming that he was wrongly dismissed.

"Plaintiff's reckless and irrelevant allegation that Mr. Adelson endorsed a `prostitution strategy' is false," the document states.

A six-page document filed Tuesday appeals to Clark County District Court Judge Elizabeth Gonzalez to give no weight to what Sands attorneys call the "inflammatory and personally derogatory" claims. It includes a copy of a May 2009 email suggesting that Jacobs knew that Adelson doesn't tolerate prostitution at any Sands properties.

Jacobs lawyer James Pisanelli declined immediate comment Wednesday, and Las Vegas Sands lawyers didn't respond to messages.

Company spokesman Ron Reese in Las Vegas said the court filings speak for themselves.

Prostitution is legal in Macau. But in the email, Jacobs told top Las Vegas Sands executive Michael Leven that before beginning a planned crackdown on soliciting for sex on the casino floor at Sands Macau properties, he wanted to make sure Adelson agreed. Jacobs said in the email that another executive told him Adelson personally approved allowing prostitution "as it would help our overall gaming revenue."

Jacobs, who was a consultant to Las Vegas Sands Corp. before becoming chief executive of Sands China Ltd., wrote he found the executive's claim "hard to believe" because it "seems at odds with what I know to be Sheldon's `no tolerance' policy."

Adelson is a billionaire philanthropist and casino mogul who owns the Venetian and Palazzo casinos on the Las Vegas Strip.

He's also a big GOP political donor. Adelson contributed $20 million to an independent group backing former House Speaker Newt Gingrich's presidential bid and is now backing a pro-Romney group with at least another $10 million.

A separate letter, dated Monday from an Adelson lawyer, called for the Democratic Congressional Campaign Committee to "retract and apologize for" what it calls defamatory and libelous claims that Adelson encouraged and profited from prostitution and donated "Chinese prostitution money" to GOP leaders.

Committee press secretary Jesse Ferguson said Wednesday the committee received and was reviewing Adelson's letter.

The allegations about Adelson's knowledge of prostitution in Macau surfaced in a seven-page sworn declaration filed by Jacobs' lawyers on June 27.

Jacobs' lawyers have accused Sands and its legal team of failing to turn over documents in the lawsuit including 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" that gives favored 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.

In the court filing, Sands attorney J. Stephen Peek on Tuesday asked the judge to give the allegation about illegal workers no credence.

"Plaintiff knows his allegation regarding illegal workers is false," he wrote.

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 U.S. companies from paying foreign officials to "affect or influence any act or decision" for commercial benefit. No charges have been filed.

The judge has scheduled hearings Aug. 30 and 31 on possible sanctions against Sands 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.