Guerrilla Plutocracy

Today's New York Times has an alarming report by Jonathan Weisman on a new development -- new to me at least -- in the annals of plutocracy in the United States. In this new phenomenon, guerrilla-style hit-and-run organizations pop up, pretend to be apolitical to get tax-exempt status, raise anonymously donated cash, spend the money on election attacks (always against Democrats), and then, faced with challenges from the Federal Election Commission and the Internal Revenue Service, quietly shut down and disappear into the dark.

“I still don’t know who they are,” said John Spratt, the former chairman of the House Budget Committee, who lost his 2010 re-election bid after facing a deluge from one such group (called "Hope, Growth and Opportunity"). “It’s a classic case.”

Weisman also discusses what Republican senators did yesterday to preserve the ability of their patrons to help them without having to display their dirty hands.

Efforts to require more public accounting of campaign money hit a new roadblock Monday evening in the form of a Republican filibuster that stopped the Senate from formally debating it. The measure fell 9 votes short of the 60 required to clear the procedural hurdle, with no Republicans voting in favor.

Senator Mitch McConnell, the leader of the Republicans in the Senate, had earlier supported the need for disclosure, but now thinks differently.

Finally, from now on, I don't want to hear the idiotic notion that "both sides do it." The Democrats are clearly making a good-faith effort to get donor disclosure. Their motives are probably simple self-preservation, but they still are angels compared to the Republicans, who do not even have the decency to allow the issue to be debated on the Senate floor.

The Intensifying Stench of Plutocracy

I have blogged before about Sheldon Adelson, the gambling-industry billionaire, and his massive financial support for Mitt Romney against Barack Obama. But in that blog post I may have incorrectly assigned a mono-causal explanation for Adelson's jihad. Adelson may be a more complex fella than I had thought. Yes, a big reason for his campaign donations to Romney is his conviction that Romney is better for Israel than Obama. But now it seems that Adelson may have a more prosaic reason for his anti-Obama crusade: He wants a federal investigation into possible violations by Adelson's Las Vegas Sands casino empire of the Foreign Corrupt Practices Act to quietly go away, and there's no better way to get that goal accomplished than by getting a business-friendly Republican-controlled Justice Department in Washington, DC.

Please see this ProPublica report on the Adelson investigations. (The report is also available on the web site of PBS's Frontline program. Please also see this video from yesterday's The Rachel Maddow Show that discusses the ProPublica report, beginning at 1:31.) I have reproduced sections of the report below; my own insertions are in brackets [].

***

A decade ago gambling magnate and leading Republican donor Sheldon Adelson looked at a desolate spit of land in Macau and imagined a glittering strip of casinos, hotels and malls.

Where competitors saw obstacles, including Macau's hostility to outsiders and historic links to Chinese organized crime, Adelson envisaged a chance to make billions.

The Macau bet paid off, propelling Adelson into the ranks of the mega-rich and underwriting his role as the largest Republican donor in the 2012 campaign, providing tens of millions of dollars to Newt Gingrich, Mitt Romney and other GOP causes.

Now, some of the methods Adelson used in Macau to save his company and help build a personal fortune estimated at $25 billion have come under expanding scrutiny by federal and Nevada investigators, according to people familiar with both inquiries.

Adelson instructed a top executive to pay about $700,000 in legal fees to Leonel Alves, a Macau legislator whose firm was serving as an outside counsel to Las Vegas Sands.

The company's general counsel and an outside law firm warned that the arrangement could violate the Foreign Corrupt Practices Act.

An email by Alves to a senior company official, disclosed by the Wall Street Journal, quotes him as saying "someone high ranking in Beijing" had offered to resolve two vexing issues — a lawsuit by a Taiwanese businessman and Las Vegas Sands' request for permission to sell luxury apartments in Macau. Another email from Alves said the problems could be solved for a payment of $300 million.

According to the documents, Alves met with local politicians and officials on behalf of Adelson's company, Las Vegas Sands, to discuss several issues that complicated the company's efforts to raise cash in 2008 and 2009.

Soon after Alves said he would apply what he termed "pressure" on local planning officials, the company prevailed on a key request, gaining permission to sell off billions of dollars of its real estate holdings in Macau.

[Here Alves seems to be using his political and legislative clout to help advance the commercial interests of Las Vegas Sands. And if Adelson's $700,000 payment is reward for such political maneuvering, rather than mere legal work, then it would be a violation of the Foreign Corrupt Practices Act.]

[Las Vegas Sands] is under criminal investigation for possible violations of the U.S. anti-bribery law.

Alves met with prominent Macau officials on Las Vegas Sands' behalf, emails show. When Adelson made a three-day trip to Beijing, Alves accompanied him, billing more than $18,000 for his services.

Alves promoted himself to Adelson as someone "uniquely situated both as counsel and legislator to 'help' us in Macau," according to an email written by a Las Vegas Sands executive.

The then-general counsel of Las Vegas Sands warned that large portions of the invoices submitted by Alves in 2009 were triple what had been initially agreed and far more than could be justified by the legal work performed.

"I understand that what they are seeking is approx $700k," the general counsel wrote to the company's Macau executives in an email in late 2009. "If correct, that will require a lot of explaining given what our other firms are charging and given the FCPA," the Foreign Corrupt Practices Act.

Adelson, described by Forbes Magazine as the largest foreign investor in China, ultimately ordered executives to pay Alves the full amount he had requested, according to an email that quotes his instructions.

Alves holds three public positions. He sits on the local legislature. He belongs to a 10-member council that advises Macau's chief executive, the most powerful local administrator. And he's a member of the Chinese People's Political Consultative Conference, a group that advises China's central government.

[Given the nature of work Alves was doing and Alves's official positions, and given the amount he was paid, it is hard to argue that Alves was being paid for regular legal work.]

Several Las Vegas Sands executives resigned or were fired after expressing concerns about Alves' billings. These include Las Vegas Sands' general counsel and two top executives at Sands China, its Macau subsidiary.

[Las Vegas Sands' contacts with Macau firms call 'junkets' are also being investigated by Nevada officials. Many people from mainland China travel to Macau to gamble. But the Chinese government does not allow the transfer of funds from China to Macau for the purpose of gambling, which is illegal in China. So, how do the visiting Chinese do their gambling in Macau? Here's how: Las Vegas Sands lends money to the 'junkets'. These 'junkets' in turn lend that money to the visiting Chinese gamblers so they can do their gambling. Back in China, the 'junkets' collect repayment of the money that the visiting Chinese gamblers had borrowed and ship the collected money back to Macau. All this is illegal and the junkets are well known as connected to criminal organizations.]

Among the junket companies under scrutiny is a concern that records show was financed by Cheung Chi Tai, a Hong Kong businessman.

Cheung was named in a 1992 U.S. Senate report as a leader of a Chinese organized crime gang, or triad. A casino in Macau owned by Las Vegas Sands granted tens of millions of dollars in credit to a junket backed by Cheung, documents show.

Another document says that a Las Vegas Sands subsidiary did business with Charles Heung, a well-known Hong Kong film producer who was identified as an office holder in the Sun Yee On triad in the same 1992 Senate report.

[William] Weidner [president of Las Vegas Sands from 1995 to 2009] resigned from the company after a bitter dispute with Adelson [over the company's links to the junkets].

Allegations about the company's dealings with Alves as well as its purported ties to organized crime are prominently mentioned in a 2010 lawsuit filed by Steven Jacobs, former CEO of Sands China.

In the suit, Jacobs contends he was fired after multiple disputes with Adelson, which included the continued employment of Alves and the company's dealings with junkets.

[J. Alberto Gonzalez-Pita, general counsel at Las Vegas Sands headquarters in Nevada, also resigned soon after the payment to Alves was made.]

Update: The Wall Street Journal has now picked up the trail. See "Sands Probed in Money Moves" by By KATE O'KEEFFE, ALEXANDRA BERZON, JUSTIN SCHECK and JAMES V. GRIMALDI, August 3, 2012. This new federal probe is distinct, however, from the Macau issues discussed above: "The U.S. attorney's office in Los Angeles is examining the casino company's handling of money received several years ago from a Mexican businessman later accused of drug trafficking and a former California executive subsequently convicted of taking illegal kickbacks, according to the people involved." It seems a safe bet that Mr. Adelson would want someone in the White House who would make these investigations go away.

Ladies and Gentlemen, The White Rabbits!

Here's a live performance by a Brooklyn, NY band that I have high hopes for.

And here's the studio recording of the same song. (Sotto voce: What would I do without YouTube? And, how come it is still free?)

Mass Deportation and Slave Labor in Post-WWII Europe

This post is about a valuable article that I just read and was surprised by: "The European Atrocity You Never Heard About" by R. M. Douglas, The Chronicle of Higher Education, June 11, 2012.

Contrary to what I had believed, mass expulsion and slave labor, far from coming to an end in Europe with WWII, continued during 1945-50, overseen by the victorious allies. An estimated 500,000 or more uprooted Germans died in this little-known episode. Stalin, who can always be relied upon to do the ghastliest thing imaginable, compensated the Poles for the Polish areas he had grabbed for the Soviet Union by grabbing German land, emptying it of Germans and passing it on to Poland. Both Poland and Czechoslovakia sought ethnically homogeneous countries and wanted their German citizens driven out without recompense and often to their deaths. The Brits and the Americans either stood by or actively helped. Atlee, the British Prime Minister, opined that the mass expulsion of Germans "would be worthwhile in the end" and the Americans did not want to alienate Poland and Czechoslovakia for fear of pushing them into Stalin's embrace.

Unfortunately, although Prof. Douglas makes clear that "tens of thousands perished as a result of ill treatment while being used as slave labor (or, in the Allies' cynical formulation, "reparations in kind")" in notorious concentration camps such as Auschwitz and Theresienstadt, he is not specific enough about this serious atrocity. Who was in charge? What work were the captives doing? Under what conditions?

The article makes no mention of anybody being prosecuted for the crimes described in it. I feel a slight shiver every time my mind drifts back to the possibility that this atrocity may be one of the very few in modern history in which the perpetrators got away absolutely scot-free.

Update, August 10, 2012: See the review by Andrew Stuttaford in The Wall Street Journal, August 10, 2012, of "Orderly and Humane: The Expulsion of the Germans after the Second World War" by R. M. Douglas.