FCPA Blogs Round-Up: Raising the Titanic?
By David Stout | November 2, 2010 1:30 pm

Steven Jacobs was used to being treated better.

Not only was he abruptly fired from his post as president of Macau operations for the gaming giant Las Vegas Sands Corporation last July 23, but he was insulted afterward — rudely hustled off the premises by security guards without even having a chance to retrieve his personal effects, as he maintains in his breach-of-contract suit filed in Clark County District Court in Nevada against the corporation and its China subsidiary.

Jacobs knows just whom to blame, too: Sheldon Adelson, the corporation’s “notoriously bellicose” chief executive and major stockholder, a man of “mercurial” disposition who displayed such “rude and obstreperous behavior” toward local and national officials in Macau, a former Portuguese colony now under Chinese control, that they wanted nothing to do with him.

The bitter parting of Jacobs and Adelson — who has occasionally been described as the richest American that most of his countrymen have never heard of — would probably have attracted little attention outside the world of legalized gambling, some of whose executives must surely be chortling. Now, the episode may reach a wider audience, thanks to the Foreign Corrupt Practices Act, as Mike Koehler notes on his FCPA Professor blog.

Jacobs alleges, among other things, that Adelson wanted him to conduct secret investigations of the dealings of Macau government officials to dig up dirt so they could be intimidated, and that Adelson wanted the corporation to continue using the services of a Macau attorney with a bad reputation “despite concerns that [the individual's] retention posed serious risks under the criminal provisions of the United States code commonly known as the Foreign Corrupt Practices Act (‘FCPA’).”

A spokesperson for the corporation has been quoted as saying, “While Las Vegas Sands normally does not comment on legal matters, we categorically deny these baseless and inflammatory allegations,” Koehler notes. (Even a cursory glance at the Las Vegas Sands website reveals a corporation deeply concerned about its image.)

Jacobs alleges that Michael Leven, the corporation’s president and chief operating officer, did the dirty work of firing him at a July 23 board meeting.  This must have been especially painful for Jacobs (and perhaps Leven) because Leven had previously praised Jacobs effusively, as in this snippet quoted in Jacobs’ court complaint. “There is no question as to Steve’s performance…The Titanic hit the iceberg…He arrived and not only saved the passengers, he saved the ship…”

In his year at the helm of the corporation’s unit in Macau, described in Jacobs’ complaint as the biggest, fastest-growing gambling market in the world, Jacobs did such a stellar job that the corporation’s stock went from $1.70 to $28 a share after Jacobs managed to undo some of the bad decisions of Adelson, the lawsuit alleges.

Whatever his faults, Adelson is an impressive figure: an up-from-the-bootstraps son of a Lithuanian immigrant who isn’t afraid to tangle with government officials, journalists and anyone else who gets in his way. Now in his 70’s, he has been a quiet force in U.S. politics and a far more outspoken one in Israeli politics. He gives generously to charities he believes in, and he has bounced back from setbacks before.

“Sheldon is a brilliant businessman, but he can be enormously difficult,” Gary Loveman, chief executive of Harrah’s, the Las Vegas-based casino giant, said in 2008.  “When he has a strong point of view, he pursues it very stridently…He’s very tough. Some would say unreasonably tough.”

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4 Comments

  1. [...] Jacobs sued the firm and its Chinese subsidiary for breach of contract after he was fired from his Macau post, [...]

  2. [...] about after a breach-of-contract lawsuit was filed by former Sands executive Steven Jacobs that floated the possibility of an FCPA violation by Sands: Jacobs alleges, among other things, that Adelson [...]

  3. [...] about after a breach-of-contract lawsuit was filed by former Sands executive Steven Jacobs that floated the possibility of an FCPA violation by Sands: Jacobs alleges, among other things, that Adelson [...]

  4. [...] about after a breach-of-contract lawsuit was filed by former Sands executive Steven Jacobs that floated the possibility of an FCPA violation by Sands: Jacobs alleges, among other things, that Adelson [...]

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