Billionaire backer may open wallet for Gingrich but bring unwanted baggage

Introduction

When Newt Gingrich and other White House aspirants gave political pitches at a forum hosted by the Republican Jewish Coalition in early December, the leading financial benefactor for the group and Gingrich in recent years was absent: multibillionaire Sheldon Adelson, who was in Asia tending to his sprawling and controversial casino empire.

The absence of Adelson, whose net worth is greater than $20 billion, was notable considering his close financial links to the conservative pro-Israel advocacy group and Gingrich. What’s more, Adelson had recently given signals to some old friends with the coalition and others that he would pump millions of dollars into efforts via a “super PAC” to promote Gingrich’s White House prospects, say GOP fundraisers.

That kind of outside muscle seems urgently needed to sustain Gingrich’s campaign, which has begun to lose momentum, according to the latest polls.

Losing ground in Iowa, nationally

Gingrich has lost his lead in Iowa to Ron Paul according to one poll and is in a dead heat with Mitt Romney in the latest CNN national poll — thanks in part to a barrage of negative advertising by his opponents and their allies.

Adelson could be a huge help, but a federal criminal probe of his Las Vegas Sands casino empire may prove to be a liability for the Gingrich campaign.

Adelson’s expected investment in a pro-Gingrich super PAC — which can accept unlimited donations from individuals and corporations and spend as much as it wants to support or defeat candidates — could wind up exceeding the $7.7 million that the casino mogul donated to Gingrich’s main political committee prior to his campaign.

There’s no doubt that Adelson can afford to make a big financial bet on Gingrich.

Adelson’s fortune ranks him close to the better-known conservative financial angels Charles and David Koch: Adelson, 78, a college dropout, was No. 8 on the most recent Forbes 400 list of super-rich Americans with a net worth of $21.5 billion (the Koch Brothers tied for the fourth spot at $25 billion).

In 2008, the casino mogul provided the lion’s share of the $30 million spent by Freedom’s Watch, a nonprofit corporation that was among the biggest pro-GOP players in the 2008 elections.

Longtime friends

“Sheldon and Newt have been friends for many years,” Mel Sembler, a Romney backer, coalition board member and former ambassador under George W. Bush told iWatch News. “Sheldon has been a supporter of Newt’s because he agrees with him on Israel, the Middle East and many other issues.”

Fundraisers familiar with the two super PACs that have been formed to date to help Gingrich are optimistic that a seven-figure check from Adelson will be written in coming weeks to help the former House Speaker win the nomination.

Adelson denied a report in Politico last week that he had made a commitment to put $20 million of his own funds, or his own funds in tandem with others, into a super PAC. But Adelson kept the door open to making a significant commitment in the future.

“I’ve made no commitment to anybody,” the casino titan bluntly told Politico. “Now, (that) doesn’t mean I won’t do so in the future, but up ‘til now, no commitment has been made and no amount stated.”

Still, Adelson’s largesse is sorely needed as Gingrich tries to match the haul of Romney’s super PAC, “Restore Our Future,” which pulled in $12 million in the first six months of this year.

That PAC has launched a $3 million-plus, hard-hitting ad blitz in Iowa that blasts Gingrich on several fronts, including the $300,000 penalty that he was ordered to pay in 1997 when, in an unprecedented move, the House voted overwhelmingly to reprimand the then-Speaker for ethical wrongdoing.

Possible baggage

But Adelson’s expected financial support for a super PAC could create political headaches for Gingrich. The Las Vegas Sands, of which Adelson is chairman and CEO, disclosed earlier this year in an SEC filing that it is facing a federal criminal probe into whether it violated the Foreign Corrupt Practices Act, which bars bribery overseas to win business.

The federal probe relates to the company’s lucrative casino operations in Macau, an offshore island and a booming Chinese gambling hub, where it has run casinos for several years. The Sands has denied doing anything wrong and is cooperating with the federal probe.

But Adelson, who has backed Gingrich financially for many years, seems not to be deterred by the probe or critics of the Georgian.

Adelson and Gingrich share a history of ardent support for the Israeli right.

Adelson owns one of the largest papers in Israel, a free daily, which has featured Gingrich on its cover and touted his strong criticisms of the Obama administration’s Middle East policies. The casino mogul is a personal friend of conservative Israeli Prime Minister Benjamin Netanyahu and a vehement opponent of a two-state solution — the idea that Palestinians should have their own country.

Gingrich, soon after the Republican Jewish Coalition gathering sparked a firestorm by stating in a television interview that the Palestinians were an “invented” people, a claim that drew rebukes from historians and some moderate Republicans, and that the Obama administration’s foreign policy “favors the terrorists.”

Defending Israel

The latter comment, coupled with other GOP presidential candidate attacks on his Middle East policies, prompted the president to reply “go ask Osama bin Laden” about whether the president favors terrorists. Some moderate Republicans, too, fretted that Gingrich was displaying his penchant for political pyrotechnics.

“Newt and Sheldon have a great interest in defending Israel,” said Rick Tyler, a former spokesman for the Gingrich campaign. Tyler, who left when many staffers quit en masse earlier this year when the campaign seemed to be tanking, is still very supportive of Gingrich, having long served as a top aide.

In the spring as the Gingrich campaign was just getting under way, Tyler told iWatch News that the two men have long been very tight: “Newt and Adelson talk often and their shared interest is Israel.”

Gingrich’s speech to the Republican Jewish Coalition forum on December 7 was deemed more passionate regarding threats to Israel than that of his chief rival, former Massachusetts Gov. Mitt Romney, by some of the group’s three-dozen board members.

One co-founder of the group, New York real estate tycoon George Klein, decided after Gingrich’s fiery speech to switch his allegiance from Romney to Gingrich according to two GOP fundraisers close to the group.

Romney’s support strong

Further, an early coalition board member, Lawrence Kadish, a Long Island real estate developer, has donated the maximum of $5,000 to Gingrich’s campaign and has the resources to be a hefty donor to a super PAC, though he lacks Adelson’s extra-deep pockets. But Romney’s support overall among coalition board members dwarfs Gingrich’s, say GOP fundraisers.

Fred Zeidman, an old friend of Adelson’s and a coalition board member who’s backing Romney, told iWatch News that the casino titan had recently remarked that to boost Gingrich he would do “whatever it costs.” Zeidman added that “Sheldon has always been a major believer in Newt and has been with him for a long time.”

For the pro-Gingrich super PACs and devoted Gingrich allies like Adelson, the pressure is on to get money into their coffers fast to pay for advertising in Iowa, New Hampshire, South Carolina and Florida, whose election contests all take place in January.

That pressure has intensified because the campaign was saddled as recently as early this month with over $1 million in debts due to heavy expenditures for things like luxury jets that were incurred early in the campaign. While fundraising has picked up as Gingrich has soared to the front in some national polls, it can’t compete with the $32 million that the Romney campaign had pulled in as of the third quarter.

So far, two super PACs have been set up since early November to back Gingrich: Solutions 2012 and Winning Our Future. The latter is likely to be the more potent operation: it’s being run by Becky Burkett who spearheaded fundraising for two years at Gingrich’s now-defunct political committee American Solutions for Winning the Future which pulled in $54 million in less than five years before going belly up earlier this year.

Neither Burkett nor Charlie Smith who runs Solutions 2012 would comment on whether they’d received any commitment from — or even contacted — Adelson.

Winning Our Future on Monday posted an online ad for Gingrich which touted the candidate’s conservative bona fides and showed a picture of him that could have been a pose for a carving on Mount Rushmore. The ad is slated to run on television but the buy has not yet been determined, according to a spokesman for the group.

Smith said that his group, which was formed first, is hoping to raise about $10 million just for the early primaries and plans advertising and get-out-the-vote efforts to boost Gingrich.

Gingrich, on the cover

Further, Smith said that his group “will work cooperatively with anybody who wants to help Gingrich get his conservative message out to voters.” He added this could include cooperative efforts with Burkett’s group or others.

In recent years Adelson has pumped big money into efforts that back Gingrich and Israeli causes, some of which have intersected in this country and in Israel.

When Adelson’s Israeli daily, a free paper called Israel Hayom (Israel Today) put Gingrich’s picture on the front page in 2010, it ran a headline that said “The Obama Administration is Denying Reality.” Gingrich darkly warned in an accompanying story inside that there could be a “second Holocaust” if the administration didn’t make policy changes.

Adelson has a home in Tel Aviv (as well as Las Vegas, Malibu and Boston) and is married to an Israeli-born doctor. He has for almost two decades taken a leading role underwriting dozens of educational trips for members of Congress to Israel. These trips have been sponsored by an affiliate of the American Israel Public Affairs Committee, the leading pro-Israel lobby in Washington, which Adelson has backed heavily.

For several years, Adelson has been the leading donor to the Republican Jewish Coalition, according to two board members. The group is a nonprofit 501 (c4), which isn’t required to disclose its donors. Earlier this year, the coalition hosted an event in Beverly Hills to honor Adelson at which Gingrich was a featured speaker. And the group also held one of its 2011 meetings at Adelson’s Venetian hotel and casino in Las Vegas.

Adelson was the leading funder of Gingrich’s now-defunct political committee, American Solutions for Winning the Future, by virtue of his $7.7 million in donations to the organization.

The group provided Gingrich a way of maintaining a political presence and getting his conservative message out for almost five years before he launched his campaign. The casino magnate also loaned his plane to Gingrich about once a month over the course of a year not long after the political group was formed, according to a person close to Gingrich.

Possible baggage?

Earlier this year, Tyler said that Adelson had attended many events that were hosted by the now-defunct American Solutions, that drew donors and potential donors.

But these tight ties between Gingrich and Adelson could prove embarrassing and haunt Gingrich’s campaign given the federal criminal probe into whether the Sands had engaged in bribery related to its casino operations in Macau.

About the same time that the federal probe into possible bribery by the casino came to light in the Sands’ SEC filing, the Nevada Gaming Control Board and Hong Kong regulators also initiated their own related inquiries. The Hong Kong probe was recently closed.

According to statements from the Sands, the federal probe stems from a lawsuit filed in Nevada in 2010 by Steven Jacobs, the executive who ran its Macau operations for over a year. Jacobs alleges that he was fired by the Sands in part due to his opposition to a bribery scheme in the lucrative gambling haven.

Jacobs’ lawsuit alleges in part that Adelson tried to get him to hire a local lawyer named Leonel Alves, who held a government post in Macau and was positioned to help their business. Alves was listed as a company counsel for over a year, a potential conflict of interest that might be a violation of the Federal Corrupt Practices Act, which bars bribery by U.S. companies to win business.

Jacobs’s suit also charged that Adelson had ordered him to conduct clandestine inquiries into the activities of senior Macau government officials. The lawsuit claims that “any negative information could be used to exert ‘leverage’ in order to thwart government regulations/initiatives.”

In response, the Sands labeled Jacobs a disgruntled ex-employee and sought to discredit him. Earlier this year, Adelson, in comments to a Wall Street stock analysts, rebutted Jacobs’ charges and called them “pure threatening, blackmailing and extortion.”

Ron Reese, a spokesman for the Sands told iWatch News last week that “the company has denied the accusations in the wrongful termination suit, and is cooperating with the government in its investigation.”

The lawsuit is due to go to trial in a Nevada court next June despite the Sands’ efforts to have the case stayed or dismissed