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Mogul’s purchase of paper seen as a power play

LAS VEGAS >> Two days after Sheldon Adelson’s lawyers lost in their attempts to have a judge removed from a contentious lawsuit that threatens his gambling empire, a call went out to the publisher of this city’s most prominent newspaper.

Almost immediately, journalists were summoned to a meeting and told they must monitor the courtroom actions of the judge and two others in the city. When the journalists protested, they were told there was no choice in the matter. It is unclear whether Adelson, who was then in talks to buy the newspaper, the Las Vegas Review-Journal, or his associates were behind the directive or even knew about it. But it was an ominous coincidence for many in the city who worry what will become of the paper now that it is owned by Adelson, a billionaire casino magnate and prominent Republican donor with a history of aggressively pursuing his interests.

Suspicions about his motives for paying a lavish $140 million for the newspaper last month are based on his reputation in Las Vegas as a figure comfortable with using his money in support of his numerous business and political concerns, said more than a dozen of the current and former Review-Journal staffers and local civic figures who have worked closely with him.

“I find it hard to believe that he would have so dramatically overpaid for that paper without having some agenda in mind,” said Jon Ralston, a columnist and the host of “Ralston Live,” a political television show in Las Vegas.

In a statement, Mark Fabiani, a crisis management expert and a spokesman for Adelson, compared his purchase of the Review-Journal to those of billionaires John Henry, who bought The Boston Globe, and Jeff Bezos, who bought The Washington Post, in recent years. Questions are always raised when a billionaire buys a paper, he said. “But over time these questions are answered, and in the end the newspapers often benefit from the financial strength that new owners provide.” For a week, Fabiani repeatedly declined to respond to questions about whether Las Vegas judges were discussed during sales talks. But he said in a written statement that the Review-Journal had reported on business cases before Adelson was involved and that the newspaper did not publish any articles based on the journalists’ monitoring of the judges.

Asked about concerns that Adelson sought to influence matters in the city, Fabiani said that Adelson “has more personal money invested in Nevada than pretty much anyone else, and so he is understandably heavily involved in all aspects of the Las Vegas community.”

For five years, Adelson and his lawyers have frequently clashed with Elizabeth Gonzalez, the judge overseeing a lawsuit against his gambling company, which involves allegations by a former executive of bribes to officials in Macau, where it operates a casino, and the possible presence there of organized crime.

The case, which is being heard in Clark County District Court, could have significant repercussions for Adelson’s future in the gambling industry, and his high-priced legal team has fought it vigorously.

On Nov. 4, with Adelson already in talks to buy the Review-Journal, the Nevada Supreme Court rejected a request from Sands China to have Gonzalez removed from overseeing the lawsuit. The company said that rulings and comments made by Gonzalez in court reflected a bias against Adelson and Sands. Gonzalez has twice sanctioned Adelson’s team, finding that it had failed to disclose information and ignored one of her orders. Once, while Adelson was giving testimony, she admonished him for disagreeing with her when she instructed that he answer a question, saying, “You don’t get to argue with me.”

The case Gonzalez is overseeing started in 2010 when the former chief executive of Sands’ operation in Macau, Steven C. Jacobs, filed a wrongful termination lawsuit, claiming he was fired for refusing to carry out orders from Adelson that he said he believed were illegal, including payments to local officials that might violate the Foreign Corrupt Practices Act. Adelson and Las Vegas Sands have insisted that they did nothing wrong and that Jacobs was fired for cause and is seeking money he does not deserve.

If the allegations raised in the lawsuit prove true, they could have significant consequences for Adelson and Sands because Nevada law bars casino owners from, among other things, associating with members of organized crime. Adelson and his company have rejected the claims, but the lawsuit prompted the Securities and Exchange Commission and the Justice Department to open investigations into Las Vegas Sands. In a recent SEC filing, Sands said it was cooperating with federal investigations but could not predict their outcomes or potential impact.

Adelson has spoken of his interest in buying the Review-Journal, which has a circulation of just under 200,000 and is an influential voice among civic leaders, for several years, according to those with knowledge of his relationship with the paper. Journalists here worry that there is no shortage of issues, including the lawsuit, that they will feel pressured to cover differently.

Among other things, Adelson is a fierce opponent of loosening marijuana regulation, which will be on the Nevada ballot in 2016, and of online gambling, which remains an active issue in the state. He is also involved in other contentious lawsuits that have been the subject of critical media coverage.

The Review-Journal has a libertarian bent, and its editorial page agrees with Adelson on some issues. But it has also been unstinting in its news coverage of him, including articles on the lawsuit being overseen by Gonzalez.

The paper’s publisher, Jason Taylor, now requires reporters and editors to get written permission before any article regarding the Review-Journal or Adelson’s purchase of it is published.

It is not clear whether Taylor has been instructed to do so, and he declined to comment. Nor was it clear, the staff members said, whether Adelson and his family had been directly orchestrating matters since the sale. It could be the case, they said, that the paper’s management or Adelson’s aides had been acting pre-emptively to satisfy what they thought Adelson, known to be a demanding and exacting man, might have wanted.

He rose to prominence in the city as the combative, litigious owner of the Sands Casino and a political kingmaker. Forbes has estimated his net worth at about $25 billion, and he travels with an entourage of bodyguards. He is a generous backer of both local and national politicians and puts his considerable resources toward local and national issues about which he feels strongly.

“When you have all the marbles, you can make the calls,” said Carolyn Goodman, the mayor of Las Vegas. “And he has all the marbles.”

On Dec. 10, a deal for the Review-Journal arranged by Adelson’s son-in-law closed, leaving the sellers, a company managed by the investment group Fortress, with an estimated gain of nearly $60 million. It was done through a recently incorporated Delaware company fronted by a publisher of small newspapers in Connecticut, Michael E. Schroeder, and Adelson and his family did not acknowledge they were the buyers until news reports revealed them to be.

Many in the city remain concerned about the state of journalism there. The other prominent local newspaper, the Las Vegas Sun, runs as an insert in the Review-Journal as part of a joint operating agreement. “Without wishing to speak ill of the Sun,” said James DeHaven, a reporter who left The Review-Journal, “The Review-Journal is the source of robust, independent reporting in Las Vegas. As it goes, so goes good journalism in Southern Nevada.”

The lawsuit Gonzalez is overseeing is far from Adelson’s first court case. Former employees have sued him, contending that he discriminated against them. And he has filed a series of defamation claims over the years, including one against the Daily Mail and another against a reporter for The Wall Street Journal. He also sued a columnist for the Review-Journal, John L. Smith, for defamation over a book Smith had written. Smith, who filed for bankruptcy while defending himself, later wrote that his lawyer told him the case was “about making me an object lesson for my newspaper and other journalists who dared to criticize the billionaire.” (Adelson eventually dropped the case.)

While several of those suits were settled out of court or dropped, Adelson won damages against the Daily Mail and is still pursuing his action against the Wall Street Journal reporter.

But even many of those with whom he has occasionally clashed in the city express a kind of admiration for him.

“Sheldon is Sheldon,” Goodman, the mayor, said. “He’s a strong personality.”

She added, “But I’ve never been intimidated by him. I feel comfortable with him.”

Goodman says she is trying to persuade Adelson to develop property the city owns. Despite questions about how he might use the newspaper, she said she was optimistic.

“I’m very excited he’s done it,” she said. “In another couple of months, I may say, ‘Oh my gosh, why did I ever say that?’”

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