Tag Archives: money in politics

Trump Just Signed Another Executive Order. It’s an Attack on Women.

Mother Jones

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President Trump marked the National Day of Prayer Thursday by signing what’s being billed as an executive order on “religious liberty.” The much-anticipated order will not include explicit, sweeping provisions allowing individuals and organizations to discriminate against people who are LGBT or having sex outside of marriage, as many had feared after a draft of the order leaked in February. Instead, it gives protections to groups that want to limit access to contraception and sets the stage for more political dark money to pour in from religious groups previously prohibited from political speech.

Many religious conservatives argue the right to freely practice their religion enshrined in the constitution permits them to legally discriminate or be exempt from certain laws on the basis of their faith. The executive order codifies this philosophy by strengthening employers’ ability to limit women’s access to contraceptive and other preventative healthcare services promised in the Affordable Care Act from private health plans. The order asks three agencies to consider issuing amended rules to make this process easier for employers if they have a religious objection.

The order was met with a mixed response from some conservative groups. The Alliance Defending Freedom, a Christian nonprofit that advocates on various political issues, said it did not go far enough. “Though we appreciate the spirit of today’s gesture, vague instructions to federal agencies simply leaves them wiggle room to ignore that gesture, regardless of the spirit in which it was intended,” said General Counsel Michael Farris in a statement. “We strongly encourage the president…to ensure that all Americans…enjoy the freedom to peacefully live and work consistent with their convictions without fear of government punishment.”

The order also makes good Trump’s campaign promise to his religious base to “get rid of and totally destroy” the Johnson Amendment, which prohibits tax-exempt charitable organizations, including churches, from engaging in political activity. Only religious organizations and churches will be exempted from the law, meaning other nonprofits will still be prohibited from political speech. “This executive order directs the IRS, not to unfairly target churches or religious organizations for political speech,” Trump said. “No one should be censoring sermons or targeting pastors.”

A number of advocacy organizations point out that exempting powerful religious organizations from prohibitions on political speech will bring a lot more dark money into politics. “This policy would create a massive loophole for dark money, allowing unlimited sums of money to flow to religious nonprofit organizations for expressions of political views,” said Noah Bookbinder, the head of the left-leaning watchdog group Citizens for Responsibility and Ethics in Washington, in a statement.

Bookbinder has called charitable groups the “next frontier” in undisclosed political spending because without the Johnson amendment in the way, it’ll be easy to start spending lots of money right away. “You have these ready-made, very large organizations that could do a lot of political spending,” he told me back in February after Trump reaffirmed his commitment to dismantle the law at the National Prayer Breakfast. “You wouldn’t have the challenges of having to set up a new organization and raise a lot of money for it.” Plus, Bookbinder says, those contributions are tax deductible, meaning people will likely give more.

Trump’s executive order may not have the anti-LGBT provisions the leaked draft does, but it gives Jeff Sessions plenty of leeway to develop rules, if he so chooses.

“In order to guide all agencies in complying with relevant federal law, the Attorney General shall, as appropriate, issue guidance interpreting religious liberty protections in Federal law,” the order reads.

Responding to the order, executive director of the National Center for Transgender Equality Mara Keisling said, “President Trump has simply asked others in his administration to do much of his dirty work.”

In anticipation of the executive order, many civil rights groups began preparing lawsuits, and at least one group still intends to file. “President Trump’s efforts to promote religious freedom are thinly-veiled efforts to unleash his conservative religious base into the political arena while also using religion to discriminate,” ACLU director Anthony Romero said in a statement. “It’s a dual dose of pandering to a base and denying reproductive care. We will see Trump in court, again.”

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Trump Just Signed Another Executive Order. It’s an Attack on Women.

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Tom Price Intervened on Rule That Would Hurt Drug Profits, the Same Day He Acquired Drug Stock

Mother Jones

This story originally appeared on ProPublica.

On the same day the stockbroker for then-Georgia Congressman Tom Price bought him up to $90,000 of stock in six pharmaceutical companies last year, Price arranged to call a top U.S. health official, seeking to scuttle a controversial rule that could have hurt the firms’ profits and driven down their share prices, records obtained by ProPublica show.

Stock trades made by Price while he served in Congress came under scrutiny at his confirmation hearings to become President Trump’s secretary of health and human services. The lawmaker, a physician, traded hundreds of thousands of dollars’ worth of shares in health-related companies while he voted on and sponsored legislation affecting the industry, but Price has said his broker acted on his behalf without his involvement or knowledge. ProPublica previously reported that his trading is said to have been under investigation by federal prosecutors.

On March 17, 2016, Price’s broker purchased shares worth between $1,000 and $15,000 each in Eli Lilly, Amgen, Bristol-Meyers Squibb, McKesson, Pfizer and Biogen. Previous reports have noted that, a month later, Price was among lawmakers from both parties who signed onto a bill that would have blocked a rule proposed by the Obama administration, which was intended to remove the incentive for doctors to prescribe expensive drugs that don’t necessarily improve patient outcomes.

What hasn’t been previously known is Price’s personal appeal to the Centers for Medicare & Medicaid Services about the rule, called the Medicare Part B Drug Payment Model.

The same day as the stock trade, Price’s legislative aide, Carla DiBlasio, emailed health officials to follow up on a request she had made to set up a call with Patrick Conway, the agency’s chief medical officer. In her earlier emails, DiBlasio said the call would focus on payments for joint replacement procedures. But that day, she mentioned a new issue.

“Chairman Price may briefly bring up … his concerns about the new Part B drug demo, as well,” she wrote. “Congressman Price really appreciates the opportunity to have an open conversation with Dr. Conway, so we really appreciate you keeping the lines of communication open.”

The call was scheduled for the following week, according to the emails.

An HHS spokesman didn’t respond to a request for comment from Price. DiBlasio and Conway didn’t respond to questions about the phone call.

The proposed rule drew wide opposition from members of both parties as well as industry lobbyists and some patient advocacy groups. It was meant to change a system under which the government reimburses doctors the average sales price for drugs administered in their offices or inside clinics, along with a 6 percent bonus. Some health analysts say that bonus encourages doctors to pad their profits by selecting more expensive treatments.

Critics argued that the rule might cause Medicare enrollees to lose access to lifesaving drugs. Lawmakers worried the federal government was potentially endangering patients and turning them into guinea pigs in a wide-scale experiment in cost savings.

However, supporters of the rule said the experiment in payments was the kind of drastic action needed to rein in soaring health costs. “We are actively reforming every other aspect of our health-care system to pay for value except pharmaceuticals,” Rep. Jan Schakowsky, D-Ill., said at the time. “Drug manufacturers are the only entity that can charge Medicare anything they want.”

The six companies that Price invested in were steadfastly opposed to the rule. McKesson formally warned investors in a Securities and Exchange Commission filing that such a change could hurt share prices. The firms lobbied the government to kill the plan.

And at two of the six companies Price invested in, people who used to work for the congressman were part of the lobbying effort.

Price’s former chief of staff, Matt McGinley, lobbied House members for Amgen, disclosure records show. Another former Price aide, Keagan Lenihan, lobbied on behalf of McKesson, where she was director of government relations at the time. Lenihan has since reunited with Price, returning to government to work as a senior adviser to her old boss at HHS.

Neither McGinley nor Lenihan responded to requests for comment.

Although Price said he wasn’t aware of his broker’s trades at the time they were made, he would have learned of his holdings no later than April 2016 when he signed and filed his latest financial disclosure forms. In earlier disclosures, Price signed forms listing his other health-related holdings, which included some drug stocks.

Price’s personal intervention raises more questions about the overlap between his investments and his work as a member of Congress.

According to House ethics guidelines, “contacting an executive branch agency” represents “a degree of advocacy above and beyond that involved in voting” on legislation where a financial conflict of interest may exist.

“Such actions may implicate the rules and standards … that prohibit the use of one‘s official position for personal gain,” the guidelines state. “Whenever a Member is considering taking any such action on a matter that may affect his or her personal financial interests, the Member should first contact the Standards Committee for guidance.”

Tom Rust, chief counsel for the House Ethics Committee, declined to comment, saying any consultations with members of Congress are confidential.

In December, after Trump was elected and named Price as his choice to lead HHS, Obama administration health officials scrapped their plan to change the drug reimbursement system. “The complexity of the issues and the limited time available led to the decision not to finalize the rule at this time,” a spokesman said.


Tom Price Intervened on Rule That Would Hurt Drug Profits, the Same Day He Acquired Drug Stock

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19 Billion Reasons Why Rick Perry Can’t Wait to Give Your Money to Energy Companies

Mother Jones

This story originally appeared on ProPublica.

Donald Trump’s selection of Rick Perry to lead the Department of Energy has prompted many Democrats to question Perry’s qualifications for the position. While he governed a state rich in fossil fuels and wind energy, Perry has far less experience than President Barack Obama’s two energy secretaries, both physicists, in the department’s primary work, such as tending the nuclear-weapons stockpile, handling nuclear waste and carrying out advanced scientific research. That’s not to mention, of course, that Perry four years ago called for doing away with the entire department.

However, there’s one realm in which Perry will have plenty of preparation: doling out taxpayer money in the form of government grants to the energy industry.

What often gets lost in all the talk of the Texas job boom under Perry is how much economic development strategy was driven by direct subsidies to employers who promised to relocate to the state or create jobs there. Of course, many states have for years engaged in the game of luring companies with tax incentives. But by the count of a 2012 New York Times investigation, Texas under Perry vaulted to the top, giving out $19 billion in incentives per year, more than any other state.

Perry’s economic development largesse came in many forms, but among the most high-profile were two big pots of money that he created while in office. In 2003, he founded the Texas Enterprise Fund, which he pitched as a way to help him close the deal in bidding wars for large employers thinking of moving to the state. Over the course of Perry’s tenure, which ended in early 2015, the fund gave out more than $500 million. In 2005, Perry created the Emerging Technology Fund, which was intended for startups. It gave out $400 million before being shuttered last year by his Republican successor, Greg Abbott.

Disbursements from both funds were controlled by Perry, the lieutenant governor and the speaker of the House. The technology fund had a 17-member advisory board, all appointed by Perry. With such scant oversight, it did not take long for political favoritism and cronyism to creep into the programs. In 2010, the Texas Observer reported that 20 of the 55 Enterprise Fund grant recipients up to that point had contributed directly to Perry’s campaign or the Republican Governor’s Association, of which he became chairman in 2010. Also in 2010, the the Dallas Morning News reported that some $16 million from the Emerging Technology Fund had gone to firms backed by major donors to Perry. For instance, after Joe Sanderson received a $500,000 Enterprise Fund grant to build a poultry plant in Waco in 2006, he gave Perry $25,000. And the Emerging Technology Fund gave $4.75 million to two firms backed by James Leininger, a hospital bed manufacturer and school voucher proponent who had helped arrange a last-minute $1.1 million loan to Perry in his successful 1998 run for lieutenant governor and contributed $239,000 to his campaigns over the ensuing decade.

In theory, companies receiving Enterprise Fund grants were accountable for their job creation pledges and had to make refunds when they fell short. In practice, the numbers proved hard to quantify and few companies had to make refunds. The watchdog group Texans for Public Justice determined that by the end of 2010, companies had created barely more than a third of the jobs promised, even with Perry’s administration having lowered the standard for counting jobs. And in 2014, the state auditor found that $222 million had been given out to companies that hadn’t even formally applied for funds or made concrete promises for job creation. “The final word on the funds is that they were first and foremost political, to allow Perry to stand in front of a podium and say that he was bringing jobs back to Texas,” said Craig McDonald, the director of Texans for Public Justice. “From the very start those funds lacked transparency and accountability.”

This being Texas, it was not surprising that many of the leading beneficiaries of the taxpayer funds were in the energy industry. Citgo got $5 million from the Enterprise Fund when it moved to the state from Tulsa in 2004, even though it made clear that it had strategic reasons to move there regardless of the incentive. Chevron got $12 million in 2013 after agreeing to build a 50-story office tower in downtown Houston—a building that three years later remained unbuilt.

Most revealing of the problems associated with the Perry model of taxpayer-funded economic development, though, may have been a $30 million grant in 2004 to a lesser-known outfit called the Texas Energy Center. The center was created in 2003 to be a public-private consortium for research and innovation in so-called clean-coal technology, deep-sea drilling, and other areas. Not coincidentally, it was located in the suburban Houston district of Rep. Tom DeLay, the powerful House Republican, who, it was envisioned, would steer billions in federal funding to the center, with the help of Washington lobbyists hired by the Perry administration, including DeLay’s former chief of staff, Drew Maloney.

But the federal windfall didn’t come through, and the Enterprise Fund grant was cut to $3.6 million, which was to be used as incentives for energy firms in the area. Perry made the award official with a 2004 visit to the Sugar Land office of the Greater Fort Bend Economic Development Council, one of the consortium’s members, housed inside the glass tower of the Fluor Corporation. In 2013, when I visited Sugar Land for an article on Perry’s economic development approach, his administration still listed the Texas Energy Center as a going concern that had nearly reached its target of 1,500 jobs and resulted in $20 million in capital investment.

There was just one problem: There was no Texas Energy Center to be found. Here, from the 2013 article in the New Republic, is what I discovered:

The address listed on its tax forms is the address of the Fort Bend Economic Development Council, inside the Fluor tower. I arrived there late one Friday morning and asked for the Texas Energy Center. The secretary said: “Oh, it’s not here. It’s across the street. But there’s nothing there now. Jeff handles it here.” Jeff Wiley, the council’s president, would be out playing golf the rest of the day, she said. I went to the building across the street and asked for directions from an aide in the office of DeLay’s successor, which happened to be in the same building. She had not heard of the Texas Energy Center. But then I found its former haunt, a small vacant office space upstairs with a sign on an interior wall—the only mark of the center’s brief existence.

Later, I got Wiley on the phone. There has never been any $20 million investment, he said. The center survives only on paper, sustained by Wiley, who, for a cut of the $3.6 million, has filed the center’s tax forms and kept a tally of the jobs that have been “created” by the state’s money at local energy companies. I asked him how this worked—how, for instance, was the Texas Energy Center responsible for the 600 jobs attributed to EMS Pipeline Services, a company spun off from the rubble of Enron? Wiley said he would have to check the paperwork to see what had been reported to the state. He called back and said that the man who helped launch EMS had been one of the few people originally on staff at the Texas Energy Center, which Wiley said justified claiming the 600 jobs for the barely existing center.

In at least one instance, this charade went too far: In 2006, a Sugar Land city official protested to Wiley that, while it was one thing to quietly claim the job totals from a Bechtel venture in town, it was not “appropriate or honest” to assert in a press release that the Texas Energy Center had played a role. “There is a clear difference between qualifying jobs to meet the Energy Center’s contractual requirement with the state and actively seeking to create a perception of it as an active, successful, going concern,” wrote the official, according to Fort Bend Now, a local news website. In this case, reality prevailed, and Wiley declined to count the Bechtel jobs.

Today, the $20 million in capital investment from the Texas Energy Center has vanished from the state’s official accounting of Enterprise Fund impact, but the 1,500 jobs remain, part of the nearly 70,000 jobs that the state claims the fund has generated.

Drew Maloney, the former DeLay chief of staff who lobbied for federal funds for the Texas Energy Center, is now the vice president of government and external affairs at the energy giant Hess Corporation.

And Perry is on the verge of being put in charge of vastly larger sums of taxpayer dollars to disburse across the energy industry. (Requests for comment from the Trump transition team went unanswered, as did a request to Jeff Miller, an unofficial Perry spokesman who now works for Ryan, a Dallas-based tax consultancy that helps clients, including ExxonMobil, get tax incentives from Texas and other states.) The Department of Energy has a budget of around $30 billion, oversees a $4.5 billion loan guarantee program for energy companies, and distributes more than $5 billion in discretionary funds for clean-energy research and development. (The loan guarantee program was the source of the $535 million loan that solar-panel maker Solyndra defaulted on in 2011, but it has had plenty of successes as well.) Many of the department’s programs have well-established standards for disbursement, but as secretary, Perry would have a say over at least some of the flow of dollars.

Trump himself, in announcing his nomination of Perry, said he hoped Perry would bring his Texas strategies on energy and economic development to Washington. “As the governor of Texas, Rick Perry created a business climate that produced millions of new jobs and lower energy prices in his state,” Trump said, “and he will bring that same approach to our entire country as secretary of energy.”

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19 Billion Reasons Why Rick Perry Can’t Wait to Give Your Money to Energy Companies

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Why Can’t We Rein In This Ridiculous Military Spending?

Mother Jones

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This story first appeared on the TomDispatch website.

Through good times and bad, regardless of what’s actually happening in the world, one thing is certain: In the long run, the Pentagon budget won’t go down.

It’s not that the budget has never been reduced. At pivotal moments, like the end of World War II as well as the war’s end in Korea and Vietnam, there were indeed temporary downturns, as there was after the Cold War. More recently, the Budget Control Act of 2011 threw a monkey wrench into the Pentagon’s plans for funding that would go ever onward and upward by putting a cap on the money Congress could pony up for it. The remarkable thing, though, is not that such moments have occurred, but how modest and short-lived they’ve proved to be.

Take the current budget. It’s down slightly from its peak in 2011, when it reached the highest level since World War II, but this year’s budget for the Pentagon and related agencies is nothing to sneeze at. It comes in at roughly $600 billionmore than the peak year of the massive arms buildup initiated by President Ronald Reagan back in the 1980s. To put this figure in perspective: Despite troop levels in Iraq and Afghanistan dropping sharply over the past eight years, the Obama administration has still managed to spend more on the Pentagon than the Bush administration did during its two terms in office.

What accounts for the Department of Defense’s ability to keep a stranglehold on our tax dollars year after endless year?

Pillar one supporting that edifice: ideology. As long as most Americans accept the notion that it is the God-given mission and right of the United States to go anywhere on the planet and do more or less anything it cares to do with its military, you won’t see Pentagon spending brought under real control. Think of this as the military corollary to American exceptionalism—or just call it the doctrine of armed exceptionalism, if you will.

The second pillar supporting lavish military budgets (and this will hardly surprise you): the entrenched power of the arms lobby and its allies in the Pentagon and on Capitol Hill. The strategic placement of arms production facilities and military bases in key states and congressional districts has created an economic dependency that has saved many a flawed weapons system from being unceremoniously dumped in the trash bin of history.

Lockheed Martin, for instance, has put together a handy map of how its troubled F-35 fighter jet has created 125,000 jobs in 46 states. The actual figures are, in fact, considerably lower, but the principle holds: Having subcontractors in dozens of states makes it harder for members of Congress to consider cutting or slowing down even a failed or failing program. Take as an example the M-1 tank, which the Army actually wanted to stop buying. Its plans were thwarted by the Ohio congressional delegation, which led a fight to add more M-1s to the budget in order to keep the General Dynamics production line in Lima, Ohio, up and running. In a similar fashion, prodded by the Missouri delegation, Congress added two different versions of Boeing’s F-18 aircraft to the budget to keep funds flowing to that company’s St. Louis area plant.

The one-two punch of an environment in which the military can do no wrong while being outfitted for every global task imaginable, and what former Pentagon analyst Franklin “Chuck” Spinney has called “political engineering,” has been a tough combination to beat.

The overwhelming consensus in favor of a “cover the globe” military strategy has been broken from time to time by popular resistance to the idea of using war as a central tool of foreign policy. In such periods, getting Americans behind a program of feeding the military machine massive sums of money has generally required a heavy dose of fear.

For example, the last thing most Americans wanted after the devastation and hardship unleashed by World War II was to immediately put the country back on a war footing. The demobilization of millions of soldiers and a sharp cutback in weapons spending in the immediate postwar years rocked what President Dwight Eisenhower would later dub the “military-industrial complex.”

As Wayne Biddle has noted in his seminal book Barons of the Sky, the US aerospace industry produced an astonishing 300,000-plus military aircraft during World War II. Not surprisingly, major weapons producers struggled to survive in a peacetime environment in which government demand for their products threatened to be a tiny fraction of wartime levels.

Lockheed President Robert Gross was terrified by the potential impact of war’s end on his company’s business, as were many of his industry cohorts. “As long as I live,” he said, “I will never forget those short, appalling weeks” of the immediate postwar period. To be clear, Gross was appalled not by the war itself, but by the drop off in orders occasioned by its end. He elaborated in a 1947 letter to a friend: “We had one underlying element of comfort and reassurance during the war. We knew we’d get paid for anything we built. Now we are almost entirely on our own.”

The postwar doldrums in military spending that worried Gross so were reversed only after the American public had been fed a steady, fear-filled diet of anti-communism. NSC-68, a secret memorandum the National Security Council prepared for President Harry Truman in April 1950, created the template for a policy based on the global “containment” of communism and grounded in a plan to encircle the Soviet Union with US military forces, bases, and alliances. This would, of course, prove to be a strikingly expensive proposition. The concluding paragraphs of that memorandum underscored exactly that point, calling for a “sustained buildup of US political, economic, and military strength…to frustrate the Kremlin design of a world dominated by its will.”

Sen. Arthur Vandenberg put the thrust of this new Cold War policy in far simpler terms when he bluntly advised President Truman to “scare the hell out of the American people” to win support for a $400 million aid plan for Greece and Turkey. His suggestion would be put into effect not just for those two countries but to generate support for what President Eisenhower would later describe as “a permanent arms establishment of vast proportions.”

Industry leaders like Lockheed’s Gross were poised to take advantage of such planning. In a draft of a 1950 speech, Gross noted, giddily enough, that “for the first time in recorded history, one country has assumed global responsibility.” Meeting that responsibility would naturally mean using air transport to deliver “huge quantities of men, food, ammunition, tanks, gasoline, oil and thousands of other articles of war to a number of widely separated places on the face of the earth.” Lockheed, of course, stood ready to heed the call.

The next major challenge to armed exceptionalism, and to the further militarization of foreign policy, came after the disastrous Vietnam War, which drove many Americans to question the wisdom of a policy of permanent global interventionism. That phenomenon would be dubbed the “Vietnam syndrome” by interventionists, as if opposition to such a military policy were a disease, not a position. Still, that “syndrome” carried considerable, if ever decreasing, weight for a decade and a half, despite the Pentagon’s Reagan-inspired arms buildup of the 1980s.

With the 1991 Persian Gulf War, Washington decisively renewed its practice of responding to perceived foreign threats with large-scale military interventions. That quick victory over Iraqi autocrat Saddam Hussein’s forces in Kuwait was celebrated by many hawks as the end of the Vietnam-induced malaise. Amid victory parades and celebrations, President George H.W. Bush would enthusiastically exclaim, “And, by God, we’ve kicked the Vietnam syndrome once and for all.”

However, perhaps the biggest threat since World War II to an “arms establishment of vast proportions” came with the dissolution of the Soviet Union and the end of the Cold War, also in 1991. How to mainline fear into the American public and justify Cold War levels of spending when that other superpower, the Soviet Union, the primary threat of the previous nearly half-century, had just evaporated and there was next to nothing threatening on the horizon? General Colin Powell, then chairman of the Joint Chiefs of Staff, summed up the fears of that moment within the military and the arms complex when he said, “I’m running out of demons. I’m running out of villains. I’m down to Castro and Kim Il-sung.”

In reality, he underestimated the Pentagon’s ability to conjure up new threats. Military spending did indeed drop at the end of the Cold War, but the Pentagon helped staunch the bleeding relatively quickly before a “peace dividend” could be delivered to the American people. Instead, it put a firm floor under the fall by announcing what came to be known as the “rogue state” doctrine. Resources formerly aimed at the Soviet Union would now be focused on “regional hegemons” like Iraq and North Korea.

After the 9/11 attacks, the rogue-state doctrine morphed into the Global War on Terror (GWOT), which neoconservative pundits soon labeled “World War IV.” The heightened fear campaign that went with it, in turn, helped sow the seeds for the 2003 invasion of Iraq, which was promoted by visions of mushroom clouds rising over American cities and a drumbeat of Bush administration claims (all false) that Saddam Hussein had weapons of mass destruction and ties to Al Qaeda. Some administration officials including Secretary of Defense Donald Rumsfeld even suggested that Saddam was like Hitler, as if a modest-sized Middle Eastern state could somehow muster the resources to conquer the globe.

The administration’s propaganda campaign would be supplemented by the work of right-wing corporate-funded think tanks like the Heritage Foundation and the American Enterprise Institute. And no one should be surprised to learn that the military-industrial complex and its money, its lobbyists, and its interests were in the middle of it all. Take Lockheed Martin Vice President Bruce Jackson. In 1997, he became a director of the Project for the New American Century and so part of a gaggle of hawks including future Deputy Secretary of Defense Paul Wolfowitz, his future boss Donald Rumsfeld, and future Vice President Dick Cheney. In those years, PNAC would advocate the overthrow of Saddam Hussein as part of its project to turn the planet into an American military protectorate. Many of its members would, of course, enter the Bush administration in crucial roles and become architects of the GWOT and the invasion of Iraq.

The Afghan and Iraq wars would prove an absolute bonanza for contractors as the Pentagon budget soared. Traditional weapons suppliers like Lockheed Martin and Boeing prospered, as did private contractors like Dick Cheney’s former employer, Halliburton, which made billions providing logistical support to US troops in the field. Other major beneficiaries included firms like Blackwater and DynCorp, whose employees guarded US facilities and oil pipelines while training Afghan and Iraqi security forces. As much as $60 billion of the funds funneled to such contractors in Iraq and Afghanistan would be “wasted,” but not from the point of view of companies for which waste could generate as much profit as a job well done. So Halliburton and its cohorts weren’t complaining.

On entering the Oval Office, President Barack Obama would ditch the term “global war on terror” in favor of “countering violent extremism”—and then essentially settle for a no-name global war. He would shift gears from a strategy focused on large numbers of “boots on the ground” to an emphasis on drone strikes, the use of Special Operations forces, and massive transfers of arms to allies like Saudi Arabia. In the context of an increasingly militarized foreign policy, one might call Obama’s approach “politically sustainable warfare,” since it involved fewer (American) casualties and lower costs than Bush-style warfare, which peaked in Iraq at more than 160,000 troops and a comparable number of private contractors.

Recent terror attacks against Western targets—Brussels, Paris, Nice, San Bernardino, Orlando—have offered the national security state and the Obama administration the necessary fear factor that makes the case for higher Pentagon spending so palatable. This has been true despite the fact that more tanks, bombers, aircraft carriers, and nuclear weapons will be useless in preventing such attacks.

The majority of what the Pentagon spends, of course, has nothing to do with fighting terrorism. But whatever it has or hasn’t been called, the war against terror has proven to be a cash cow for the Pentagon and contractors like Lockheed Martin, Boeing, Northrop Grumman, and Raytheon.

The “war budget”—money meant for the Pentagon but not included in its regular budget—has been used to add on tens of billions of dollars more. It has proven to be an effective “slush fund” for weapons and activities that have nothing to do with immediate war fighting and has been the Pentagon’s preferred method for evading the caps on its budget imposed by the Budget Control Act. A Pentagon spokesman admitted as much recently by acknowledging that more than half the $58.8 billion war budget is being used to pay for nonwar costs.

The abuse of the war budget leaves ample room in the Pentagon’s main budget for items like the overpriced, underperforming F-35 combat aircraft, a plane that, at a price tag of $1.4 trillion over its lifetime, is on track to be the most expensive weapons program ever undertaken. That slush fund is also enabling the Pentagon to spend billions of dollars in seed money as a down payment on the department’s proposed $1 trillion plan to buy a new generation of nuclear-armed bombers, missiles, and submarines. Shutting it down could force the Pentagon to do what it likes least: live within an actual budget rather than continuing to push its top line ever upward.

Although rarely discussed because of the focus on Donald Trump’s abominable behavior and racist rhetoric, both candidates for president are in favor of increasing Pentagon spending. Trump’s “plan” (if one can call it that) hews closely to a blueprint developed by the Heritage Foundation that, if implemented, could increase Pentagon spending by a cumulative $900 billion over the next decade. The size of a possible buildup under Hillary Clinton is less clear, but she has also pledged to work toward lifting the caps on the Pentagon’s regular budget. If that were done, and the war fund continued to be stuffed with non-war-related items, the Pentagon and its contractors will be sitting pretty.

As long as fear, greed, and hubris are the dominant factors driving Pentagon spending (no matter who is in the White House), substantial and enduring budget reductions are essentially inconceivable. A wasteful practice may be eliminated here or an unnecessary weapons system cut there, but more fundamental change would require taking on the fear factor, the doctrine of armed exceptionalism, and the way the military-industrial complex is embedded in Washington.

Only such a culture shift would allow for a clear-eyed assessment of what constitutes “defense” and how much money would be needed to provide it. Unfortunately, the military-industrial complex that Eisenhower warned Americans about more than 50 years ago is alive and well, and gobbling up your tax dollars at an alarming rate.

William D. Hartung is the director of the Arms and Security Project at the Center for International Policy. His latest book is Prophets of War: Lockheed Martin and the Making of the Military-Industrial Complex.

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Why Can’t We Rein In This Ridiculous Military Spending?

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New York’s Attorney General Has Opened An Inquiry into Donald Trump’s Charity

Mother Jones

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New York Attorney General Eric Schneiderman has opened an inquiry into Republican presidential nominee Donald Trump’s charity following questions over whether the foundation has complied with state law.

The scrutiny comes in light of recent investigations by the Washington Post and Associated Press that shed light into the inner workings of the Donald J. Trump Foundation. The Washington Post reported on Saturday that Trump, who founded the charity in 1987 and has claimed to have donated millions from his own pocket, had not contributed to his foundation since 2008. Instead, the Post found, Trump’s foundation received millions of dollars from donors, which it doled out under its own name.

In 2009, Trump reportedly spent $20,000 meant for charitable purposes on a six-foot-tall painting of himself. In 2013, the Trump Foundation gave $25,000 to a political group associated with Florida Attorney General Pamela Bondi. That gift, which was illegal, resulted in a $2,500 penalty payment to the Internal Revenue Service. House Democrats have called for a federal criminal investigation into the transaction.

Schneiderman told CNN’s Jake Tapper on Tuesday that his office was looking into Trump’s charity out of concern it had “engaged in some impropriety” in its operations. “We’ve inquired into it, and we’ve had correspondence with them,” he said. “I didn’t make a big deal out of it or hold a press conference. We have been looking into the Trump Foundation to make sure it’s complying with the laws governing charities in New York.”

Schneiderman is also challenging Trump in a lawsuit alleging that Trump University, the mogul’s defunct real-estate seminar, engaged in “persistent fraudulent, illegal and deceptive conduct.”

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New York’s Attorney General Has Opened An Inquiry into Donald Trump’s Charity

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Flint Mayor Ordered Staffer to Divert Charitable Donations to Her Campaign Fund, Lawsuit Claims

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In November, Flint residents elected a new mayor, Karen Weaver, who promised to help solve the city’s lead crisis and hold local authorities accountable. Now, she’s mired in a controversy of her own.

On Monday, former City Administrator Natasha Henderson filed a lawsuit in US District Court against Weaver and the city of Flint, claiming she was wrongfully fired after raising concerns that Weaver was steering donations for Flint families into a campaign fund. According to the complaint, Henderson was approached in February by a tearful city employee, Maxine Murray, who told Henderson “she feared going to jail.” The mayor, the suit claims, had instructed Murray and a volunteer to direct donations from Safe Water Safe Homes, a fund created to repair antiquated plumbing in Flint homes, to a campaign account called Karenabout Flint, and give them “step-by-step” instructions on how to make a donation.

As CNN notes, “Karenabout Flint” is not a state-registered PAC, though “Karen About Flint” was the mayor’s campaign slogan, Twitter handle, and campaign website. According to the lawsuit, Henderson, the city’s top unelected official, reported the matter to Flint’s chief legal council in February and requested an investigation. Three days later, she was terminated on the account that there was no room in the city budget to fund her position—though Henderson noted that her position was funded by the state. The mayor’s office did not immediately respond to a request for comment.

Read the full complaint below.

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Henderson vs Flint and Weaver (PDF)

Henderson vs Flint and Weaver (Text)

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Flint Mayor Ordered Staffer to Divert Charitable Donations to Her Campaign Fund, Lawsuit Claims

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400 Non-Violent Protesters Were Arrested on Capitol Hill

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More than 400 people protesting the role of big money in politics outside the U.S. Capitol were arrested on Monday. The non-violent demonstration, which was organized by the advocacy group Democracy Spring and involved members of over 100 individual groups, was the first of similar rallies planned for this week.

According to police, protesters on Monday were arrested for “unlawful demonstration activity” and charged with “crowding, obstructing, and incommoding.”

The Democracy Spring website claims 3,500 people have pledged to participate in this week’s demonstrations. The April events come on the heels of a 10-day march from Philadelphia to Washington.

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400 Non-Violent Protesters Were Arrested on Capitol Hill

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Sheldon Adelson Bets It All

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It was around 10:30 p.m. when Steve Jacobs rolled down the gravel driveway. The air was warm for early January, even for Florida. Yellow boat lights bobbed on St. Augustine’s harbor, and the scent of star jasmine hung on the breeze. Jacobs stepped onto his porch and found the door still locked. It had only been a few days since he had come home to find it mysteriously ajar.

When Jacobs sat down to work, however, he noticed his crate of files was missing. He headed to the kitchen, opened the top of his coffee maker, and looked inside. The hard drive he’d stashed there was gone too.

A police officer soon arrived, checked the doors, dusted for fingerprints. He carefully wrapped the coffee maker in a plastic bag and said he would forward it to the FBI.

Jacobs had his suspicions as to why his house had been burgled. For five years he’d been locked in a protracted legal battle with one of the wealthiest men on Earth. Jacobs had filed a wrongful-termination case, accusing his former boss of ordering him to perform “illegal activities.” Could the burglary have been the desperate act of some yes-man or fixer, or even the gangsters he’d encountered while working in China? “I don’t know who is behind it,” Jacobs testified in a subsequent legal proceeding, admitting he had no facts to suggest it was his old employer. “I know who might have a benefit or interest in understanding what information I may have had.”

It’s a long way from a burglary in northeastern Florida to the battle for the White House, but there may be a connection: Jacobs’ tale and the documents his lawsuit has brought to light—some of which were on the hard drive in the coffee maker—provide a rare window into the business dealings of Sheldon Adelson, the casino magnate and political megadonor who could have a bigger role in selecting the 2016 GOP nominee than millions of Republican voters.

Over the past five years, I’ve sought to gain a fuller view of this complicated figure in American politics. I’ve written several major investigative pieces about Adelson, interviewing scores of casino executives and law enforcement officials and amassing thousands of pages of documents, including troves of Adelson’s legal transcripts and videotaped interviews. It has been a challenging process. Adelson has a track record of threatening to sue journalists. He sued one for describing him as “foul-mouthed.” He sued a columnist from the Las Vegas Review-Journal, driving him into bankruptcy over a few ill-chosen words. He once went after my reporting with a retraction demand but dropped it after my editors refused to make any changes to the story.


The bizarre story of the Review-Journal sale

Adelson has used his fortune to reshape right-wing politics in both America and Israel, establishing himself as a GOP kingmaker in the post-Citizens United era. In December, he backed a secretive $140 million purchase of the Review-Journal, putting Nevada’s largest paper in the hands of its richest resident and a fixture of its biggest industry, and increasing his influence on Nevada’s early presidential caucuses. And now, as the 2016 campaign swings into high gear, Adelson faces a long-standing Justice Department probe that could generate embarrassing headlines for the mogul and the candidates he backs.

Former Sands executive Steve Jacobs’ lawsuit has dogged Adelson for more than five years. Jerome Favre/Bloomberg/Getty Images

All this is why Jacobs’ case, due to go to trial in June, is so significant: The protracted litigation has illuminated just how Adelson built one of the world’s largest fortunes through his casinos in Macau—a Chinese territory rife with corruption where, Jacobs’ lawsuit alleges, Adelson not only tolerated, but sometimes even encouraged, illegal and unethical acts. In turn, Adelson has denied these accusations, describing Jacobs as a disgruntled ex-employee who was fired for insubordination and failure to properly address some of the issues raised in his own lawsuit.

During the last presidential election, Adelson spent nearly $100 million directly (and reportedly another $50 million in undisclosed dark money) trying to thwart Barack Obama’s reelection. That included $20 million that he and his wife spent backing Newt Gingrich’s primary run and, after Gingrich dropped out of the race, another $30 million on a super-PAC supporting Mitt Romney. He gave another $23 million to American Crossroads, the super-PAC once led by Karl Rove. His dark- money contributions reportedly buoyed conservative organizations such as the Koch brothers’ Americans for Prosperity.

And Adelson has an arguably greater political influence in Israel, where he founded the free daily Israel Hayom, reportedly spending tens of millions of dollars to bankroll it. Now the country’s most widely read publication, Hayom serves as the house organ for Prime Minister Benjamin “Bibi” Netanyahu, who rode to reelection last year after stoking fears that “Arab voters are heading to the polls in droves.” This year’s Republican candidates, many of whom have made the pilgrimage to Las Vegas in what has become known as the “Adelson primary,” know that the mogul’s patronage depends on their positions and tone toward Israel.

A diminutive 82-year-old with a lumpy face and a puff of thinning red hair, Adelson is the 13th-richest man in the United States, worth more than $20 billion, according to Forbes. Though he made his initial fortune in Vegas, he joined the ranks of the superrich following his 2001 investment in Macau, a once run-down seaport an hour’s ferry ride from Hong Kong that in the last decade has overshadowed Vegas to become the world’s gambling capital. Adelson’s casinos in Macau, a special administrative region of China, provide the majority of the revenue for his company, Las Vegas Sands. But beneath Macau’s glitz lurk organized crime, corruption, and a shadow banking system that has allegedly laundered billions of dollars for China’s ruling elite. In 2013, the chair of Nevada’s powerful Gaming Control Board told a federal commission that it was “common knowledge” that the lucrative VIP rooms in Macau casinos have “long been dominated by Asian organized crime.” That same year, a federal commission cited a study finding that more than $200 billion in “ill-gotten funds are channeled through Macau each year.”

Which raises the question: Is dirty money spent by corrupt Chinese officials at Macau casinos flowing into our elections, at least indirectly? “With Citizens United, there’s an awful lot of money sloshing around in our political process,” said Carolyn Bartholomew, vice chairman of the bipartisan US-China Economic and Security Review Commission, a congressional advisory body that produced a scathing report detailing Macau’s vulnerability to money laundering by such officials. “People have a right to know whose money that is, and that the proceeds being spent in the political process are not from illegal and illicit activities.”

The key to finding out may be Steve Jacobs’ lawsuit. “This case will never be settled,” Adelson has vowed, and he’s kept his word through more than five years of bruising and reputation-staining proceedings. As the billionaire promised reporters in Macau, “When we win the case, we will go after him in a way that he won’t forget.”

Dale Stephanos

Adelson has always been a fighter. The son of a Jewish Lithuanian cab driver and a British-born mother who ran a small knitting service, Adelson grew up in the Dorchester neighborhood of South Boston. As an infant, he slept in a dresser drawer, until he joined his sister and two brothers on the floor. “I didn’t know we were poor, but we were very poor,” he would later say in testimony. “Church mice were rather affluent compared to our family.”

Dorchester was home to a thriving Jewish community, but also to Irish toughs who Adelson has said forced Jewish kids to travel in packs to avoid being attacked with brass knuckles, rubber hoses, and chains. “I just have a lot of memories of being beaten up for being Jewish,” he said in a deposition. “And when you have been beaten many, many times over a period of years, you get to know what a feeling of hostility and hatred is.”

Adelson clawed his way to a better life through thrift, opportunism, and hard work, emerging, by many accounts, as a prickly, combative scrapper. At age 12 he starting selling newspapers on the street, and soon he moved on to buying control of street corners. His first corner faced the employee entrance to Filene’s Basement, a thriving department store in downtown Boston. Borrowing $200 from his uncle, the treasurer of a credit union, he soon bought another corner. At age 16, he invested in 125 candy machines that he set up in shoe factories and later at all-night gas stations, where cab drivers like his father would fill up their cars, thereby earning Adelson profits around the clock. He thrived, despite the looming presence of the Patriarca gang of Boston, which was involved in the vending-machine business at the time.

Adelson graduated from high school, joined the Army, and upon discharge returned to serial entrepreneurship. “I thought I couldn’t hold down a job because I went from thing to thing,” he would later say. “I’ve done over 50 different things in my life.”

Adelson became a venture capitalist in the 1960s, investing in a bull market and losing a fortune when it went bust. He sold condominiums. He started a charter travel service. But he hit upon his first great success in 1979 when he created Comdex, a computer trade show that eventually drew more than 225,000 people to Las Vegas, an event so large it had to be held in multiple locations. Adelson decided to build his own convention center, and he found some land owned by the Sands Hotel, which he purchased in 1989.

As the hotel’s new owner, Adelson had to seek a gambling license and endure a rigorous background check. The Nevada Gaming Control Board dug up scores of lawsuits in which he had failed to pay his debts. Massachusetts had suspended his real estate license. His longtime friend and business partner Irwin Chafetz (who still sits on the board of Las Vegas Sands Corp.) had ties to a man named Henry Vara who’d been accused of skimming from the gay bars he owned, one of which was notorious for prostitution.

The regulators asked tough questions about Chafetz’s associations, but Adelson told them that he didn’t want to drop his friend from the application. “That man and I are almost like Siamese twins,” Adelson told the board. “We are almost joined physically. There is nothing in the world that can convince me he would do anything wrong.”

Adelson would win his license, but not before one of the board’s regulators warned him of the dangers of this kind of loyalty. “I may have some problems,” the official said, “with your ability to judge people and character.”

Two years after the purchase of the Sands Hotel made him a casino magnate, Adelson married his second wife, Miriam Ochshorn, an Israeli doctor who would nurture his passion for her home country. Over time she came to assume a substantial role in their family’s business and political interests, and she has been spoken of as a potential successor to her husband.

In 1995, Adelson sold his trade show for $862 million and hired a superteam of casino industry veterans to grow Sands Corp. One of them, William Weidner, became the company’s president the following year. Handsome and hard-nosed, Weidner would help run the company for 13 years as it expanded, first in Vegas and eventually across the Pacific.

The old Sands Hotel had once played host to Frank Sinatra and his legendary entourage. Adelson demolished it. (“It was the home of what they called the Rat Pack, a very glamorous history in Las Vegas,” Adelson later said. “So I tore it down.”) In its place, he built the Venetian, inspired by the city where he and Miriam had honeymooned. When it opened in 1999, the faux-Italian complex was the largest gambling resort Vegas had ever seen, and competitors derided him for building too many rooms. But it was soon packed.

A year later, Adelson flew to Hong Kong at the urging of his younger brother Lenny to meet Richard Suen, a well-connected entrepreneur who told him that China was preparing to allow international investment in Macau. “We think one day…it’ll be opened up and other people will be able to come,” Suen said, according to a deposition Adelson later gave. “I’m typically not interested in investing where the American or Israeli flags don’t fly over schools,” Adelson replied. But Weidner, according to depositions, encouraged him to explore the relationship.

Suen introduced Adelson and Weidner to the vice premier of China in early July 2001. They met in the Purple Light Pavilion of Zhongnanhai, the Chinese equivalent of the White House, near Beijing’s Forbidden City. After 45 minutes together, the vice premier invited Adelson to submit a bid for a gaming license in Macau.

That same weekend, Adelson also met with the mayor of Beijing, who asked him for some help: Congress was considering a resolution to protest China’s bid to host the 2008 Olympics, based on the country’s human rights violations. “We’re standing in a parking lot of the Beijing convention center. Sheldon picks up his cellphone and calls Tom DeLay in Houston,” Weidner later said in a deposition. Adelson reached the House majority whip at a Fourth of July cookout. “You can hear him—Tom DeLay talks very loudly over the phone. Tom says, ‘I’m chewing on my fourth piece of rubber chicken.'”

DeLay was a co-sponsor of the resolution, which had overwhelming bipartisan support and was particularly popular among evangelicals concerned about Chinese persecution of Christians. But Adelson had taken DeLay to Israel and lavishly supported Republican campaigns. DeLay said he would see what he could do. “Three hours later,” Weidner said, “DeLay calls and tells Sheldon, ‘You’re in luck. I’d like to get that bill, but I can’t do it—we’re not going to be able to move the bill.’ Sheldon goes to the mayor and says, ‘The bill will never see the light of day, Mr. Mayor. Don’t worry about it.'”

DeLay later said he couldn’t recall the conversation, and Adelson denied trying to block the bill. But, according to Weidner, the call made an impression on the Chinese. Stanley Ho, the debonair tango enthusiast who was the godfather of Macau’s gaming operations, later pulled a Sands executive aside at a party in Hong Kong with good news about the company’s license application, telling him, “By the way, that Olympic thing: I think you guys won the bid,” Weidner later recalled in a deposition. “That’s what I hear back from my guys in Beijing. Congratulations.”

At the time, Ho held a virtual monopoly on gaming in Macau, long a hotbed for piracy, gold smuggling, and espionage. According to US regulators, Chinese criminal organizations called triads had penetrated his casinos, even operating out of their private VIP rooms. In 1999, just before China assumed control of the territory from Portugal, a triad war erupted as gangs fought for dominance. Criminals shot each other in broad daylight; car bombs scattered limbs across the ancient stone sidewalks. Weidner wondered how American casino operators would “ever open in that kind of lawless environment.” Violence wasn’t the only obstacle: Nevada had spent decades purging itself of mobsters like Sam Giancana and Meyer Lansky, and the state had strict rules that could jeopardize Sands’ gambling license if the company associated with organized crime anywhere in the world.

China prohibits its citizens from bringing more than $3,000 across the border into Macau, a fraction of what a high roller can spend on a hand, let alone in an evening. This restriction led to the emergence of junket companies, which ferried wealthy gamblers to Macau and extended them credit to get around the currency constraints. The junket business provided a legal construct to bring in vast sums from China. This made Macau a popular destination for corrupt Chinese officials: They could turn their ill-gotten gains into chips, collect the winnings, and deposit them in offshore accounts.

The junkets were critical to the success of the casinos, which relied on big-spending whales for a huge portion of their business. Gambling debts are not collectible in Chinese courts, so junket companies or their triad affiliates did the job—sometimes brutally, according to a report by the US-China Economic and Security Review Commission. Chinese newspapers are filled with grisly tales of gamblers who failed to repay their loans and ended up kidnapped, imprisoned in cages, threatened with dismemberment, injected with drugs, or forced to take revealing photos. Triad members might give an indebted gambler “a list of options,” according to Nelson Rose, an expert in Macau and gaming law at Whittier Law School: “‘We will rape your wife and put her in a brothel. We will hang you by your feet off one of the tallest buildings.’ They do find bodies in mainland China linked to gambling debts in Macau.”

Adelson’s first Asian casino, the Sands Macau, opened to crushing crowds in 2004. Liu Guoxing/ImagineChina/Zuma Press

In May 2004, thousands of people spurred by rumors of free chips swarmed outside the Sands Macau for its grand opening. The crowd literally tore the main doors from their hinges and smashed in 16 other entrances. Escalators groaned under the weight of gamblers rushing to the tables.

A similar frenzy gripped the New York Stock Exchange later that year, when Las Vegas Sands Corp. (LVSC) went public and Macau-mad investors pushed the new stock up by 61 percent in a single day. Almost overnight, Adelson was propelled into the ranks of the world’s superrich, his worth rising from $1.8 billion in 2004 to more than $11.5 billion in 2005. “He got rich faster than anyone else in history,” Peter W. Bernstein and Annalyn Swan wrote in All the Money in the World, their book on the Forbes 400. For years after the company went public, Adelson’s personal shares earned him about $1 million every hour.

The Sands Macau made back its $256 million in construction costs in 10 months, and it initially avoided entanglement with the junkets. But, according to a deposition Weidner later gave, that soon changed. Over the next several years, as I reported in articles for Reuters and ProPublica that were produced with the University of California-Berkeley’s Investigative Reporting Program, the casino partnered with two junkets connected to an organized-crime figure in Hong Kong who has been under the scrutiny of US law enforcement at least as far back as 1992, according to court records, financial filings, and the casino’s own internal reports. By 2007, junkets were providing more than two-thirds of the revenues at Sands’ Macau casinos, according to the company’s Securities and Exchange Commission filings.

That year, Adelson opened his second outpost in the Chinese enclave: the Venetian Macau, which remains the largest casino in the world. The stock price of LVSC hit an all-time high that October, lifting Adelson’s worth to $26.5 billion. And his newfound wealth turbo­charged his political giving.

Adelson had been a political donor for decades and was even named a Bush Pioneer for raising more than $100,000 for George W. Bush’s 2004 reelection campaign. But that was peanuts compared with what he would stake now. He bankrolled nearly the entire $30 million budget of Freedom’s Watch, which he had launched as a right-wing counterpoint to MoveOn.org, and used it to drum up support for Bush’s 2007 surge in Iraq. Weidner sat on the board of the group; Karl Rove was a key adviser. When the 2008 campaign drew near, Adelson crowed to the Wall Street Journal that the cavalry was “coming over the hill, bugles blaring. I’m looking for a horse…and trying on chaps and boots and stirrups.” But Freedom’s Watch soon dissolved after staffers bridled at Adelson’s micromanagement.

Meanwhile, trouble was brewing in China. Richard Suen, the fixer who helped introduce Adelson to Chinese officials, had sued over a deal he had hammered out with Weidner: For helping the company get a gambling license, Suen said, he’d been promised $5 million and 2 percent of LVSC’s Macau profits. But when the case went to trial in 2008, Adelson claimed he refused to pay Suen because Suen had fallen short of a promise to “deliver a license,” since the company’s entrée to Macau had still been subject to a competitive bidding process. When Adelson took the stand, he accused Weidner of agreeing to inappropriate terms with Suen—terms Adelson claimed to have not properly understood because he had been too sedated on painkillers. (Adelson suffers from peripheral neuropathy, a painful condition that has left him largely wheelchair bound since 2001.) A jury didn’t buy it and awarded Suen $43 million. Adelson appealed, but in 2013 a new jury awarded Suen $70 million. Adelson has appealed again, to the Nevada Supreme Court. The case is pending.

But the real damage, according to Weidner, came after officials in Beijing learned their dirty laundry was being aired at trial. Adelson’s conversation with DeLay came to light, as did connections between Suen’s firm and China’s top officials. The fatal blow was a photograph, displayed in the Las Vegas courtroom, of Adelson, Suen, and Weidner smiling alongside the vice premier of China. “Sheldon really fucked the pooch on that one,” Weidner later told me.

Within a month of the 2008 trial’s close, Beijing moved to shut down a huge goodwill project Sands had undertaken—the Adelson Center for US-China Enterprise. Sands had already spent more than $50 million on the center, which was intended to connect US companies with Chinese partners, but “the government didn’t want anything to do with a building that had Adelson’s name on it,” Weidner told me.

China imposed severe restrictions on travel visas to Macau that year, causing visits from the mainland to drop by nearly 20 percent. A State Department cable, made public by WikiLeaks, said the squeeze was a result of China’s growing concern over the junket trade. “The fact that mainland gamblers account for the majority of funds flowing into Macau appears increasingly undesirable to Beijing,” the cable read. “The perception is widespread that, with the implicit assistance of the big ‘junket’ operators, some of these mainlanders are betting with embezzled state money or proceeds from official corruption, and substantial portions of these funds are flowing on to organized crime groups.”

All this compounded the damage inflicted by the unfolding global economic crisis. Bank credit froze just as Sands was building massive new casino projects in Macau. LVSC had more than $10 billion in debt and was on the verge of bankruptcy when Adelson injected $1 billion of his own money to keep it afloat. But that was not enough to hold onto Weidner, who resigned in March 2009, describing his management conflicts with Adelson as a “junkyard dog fight.”

After Weidner left, Steve Jacobs was brought on to address the problems in Macau. Though Jacobs had no experience in the gambling sector, he was a turnaround artist who’d overseen the corporate restructuring of Holiday Inn and a luxury hotel chain in Europe. “I typically take on assignments that others can’t or won’t,” Jacobs later boasted.

Jacobs recalled being shocked by his first visit to the Venetian Macau. While Adelson has testified that Sands had “zero tolerance” for prostitution, Jacobs says he “walked on the floor and saw rampant prostitution. It was blatantly, blatantly obvious.” Although it was legal in Macau, Jacobs felt that it was bad for business.

An average of 40 to 60 prostitutes walked the Venetian’s floors on weekends, outnumbering security personnel, according to company documents entered as exhibits in the Jacobs case. The internal security reports say the women were “frequently under 18 years” old and trafficked from China’s inner provinces by “vice syndicates” to work out of rooms the prostitutes appeared to have received free of charge.

Jacobs proposed ridding the casino of prostitution. But he was soon informed, he later recalled, that management had decided “to allow prostitution as it would help our overall gaming revenue.”

According to Jacobs, Sands’ new president, Michael Leven, told him not to “make it a big deal…The board knows prostitution is going on.”

“Does Sheldon know prostitution is going on?” Jacobs remembers asking.

Leven, he testified, said, “Yes, but it’s legal. It’s what the gamblers want.”

To shore up LVSC’s dismal finances, Jacobs began preparing to spin off the company’s Macau holdings into Sands China, a new entity that could be independently listed on the Hong Kong stock exchange. It was a difficult task in the rocky economic climate, and Adelson’s combative style made the job no easier. Jacobs would later claim in litigation that he spent much of his time repairing “strained relationships with local and national government officials in Macau who would no longer meet with Adelson due to his obstreperous behavior.” Animosity over Suen’s lawsuit also lingered “like a festering sore,” according to an internal memo by an LVSC board member. “The central government attitude about Las Vegas Sands has changed.”

Macau’s Beijing-selected chief executive, Edmund Ho (no relation to Stanley), privately suggested to the board member that Adelson “should sit back a bit, enjoy his family and his time and let his executives handle the operations in Asia,” according to the memo. As Jacobs was laying the groundwork for the Hong Kong public offering, he approached Ho about getting an exemption from local real estate laws for a condominium project. Ho refused to grant it.

According to Jacobs, Adelson “became enraged and stated that Ho had ‘promised’ him” the exception. Two years earlier, Adelson had paid a substantial settlement to a group of businessmen who, like Richard Suen, were seeking payment for helping to facilitate Sands’ entrée into Macau. The litigants had been particularly close associates of Ho, and Adelson wanted Jacobs to remind the executive of how he’d dispensed with the case: According to Jacobs’ lawsuit, Adelson instructed him to “inform the ‘son of a bitch’ that Adelson had settled a lawsuit for $40 million dollars to keep Chief Executive Ho out of jail.” Instead, Jacobs reported the conversation to the company’s chief counsel, according to court filings.

Jacobs worried that paying Macau politician Leonel Alves raised concerns under US bribery laws. Whhalbert/Wikimedia

Undeterred, Adelson continued to push the Macau government on the condo permit. He hired Leonel Alves, a top Macau politician, as the company’s local counsel. In late 2009, Alves emailed Jacobs to report he had been approached by a “high-ranking official in Beijing” who suggested a way to get approval—but it would be “expensive,” more than “300m” US dollars, Alves later wrote, “to be deposited in a mutually accepted escrow account.” Jacobs refused, believing Alves was suggesting a “payment for Chinese officials,” according to court documents. When Alves submitted invoices for his work, they were significantly higher than what the company had expected, triggering concerns that such payments could present a risk under the Foreign Corrupt Practices Act, which prohibits US companies from bribing public officials overseas.

When Sands China, the spinoff, went public in November, it raised more than $2.5 billion, and Jacobs, now president of the new entity, was heralded as LVSC’s savior. “There is no question of Steve’s performance,” Leven wrote in an email to a board member. “The Titanic hit the iceberg, he arrived and saved the ship.” Rob Goldstein, the current president of LVSC, later said in court that he believed Jacobs was Adelson’s heir apparent.

But Adelson was now challenging Jacobs on the smallest of details: The casino didn’t have enough slot machines. There weren’t enough seats at the noodle bar. Even Miriam chimed in, relaying a complaint via a secretary: “The person speaking over the loudspeaker on the ferry…should speak with much better English—not with such a heavy accent.”

Meanwhile, Alves continued to press Adelson for his fees. Though Jacobs had initially refused to release the money, Adelson assured the Macau politician that he would make sure Jacobs would “resolve any issues immediately.” Despite Jacobs’ legal concerns, Adelson instructed him to pay Alves, according to internal emails, “regardless of cost.” In subsequent legal proceedings, Adelson has defended the payments.

Internal documents show Sands worked with enterprises linked to alleged gang figure Cheung Chi Tai to attract gamblers. Bobby Yip/Reuters

Soon afterward, Reuters published my investigation showing that Sands had partnered with two junkets underwritten by the alleged triad boss Cheung Chi Tai to bring gamblers to its tables. According to testimony in a Hong Kong trial, Cheung was the “person in charge” of a Sands VIP room and, company documents show, entitled to a share of its profits. Witnesses in the trial said he ordered the killing of a junket worker suspected of cheating. The man was not killed, and Cheung was never charged in connection with the plot, but the trial and article linking Cheung to the junket was “enough to cause major headaches” for Sands and put the company’s invaluable Nevada license at risk, according to Whittier Law School’s Nelson Rose.

Explore court records and other documents behind this story.

“When the article came out, Mr. Adelson was quite animated,” Jacobs later said in a deposition. The company demanded that Reuters retract the story, denying the casino had anything to do with the alleged gang leader. In fact, Cheung-affiliated junkets reaped as much as $160 million in commissions from Sands casinos in 2009, an internal email shows. If the payments were made according to Macau’s traditional arrangement, it would suggest that the two junkets brought Sands some $400 million in business—nearly as much as the conglomerate’s Las Vegas revenues that year.

Sands’ chief counsel abruptly gave notice just days after the article appeared. In the weeks to follow, he complained that the company’s protest of my story contained inaccuracies. Reuters published no correction or retraction.

But that article prompted Sands to embark upon its own internal investigation, which uncovered documents showing the casino had extended more than $32 million in credit to junkets backed by Cheung, according to the company’s court filings. Jacobs wanted to tell LVSC’s board about the relationship, but he says Adelson stopped him. According to Jacobs’ lawsuit, when he speculated about the risk the alleged Cheung connection presented to Sands’ Nevada license, “Adelson scoffed at the suggestion, informing Jacobs that he…controlled the regulators, not the other way around.”

On the morning of July 23, 2010, barely eight months after the company’s successful Hong Kong public offering, Jacobs was called to a meeting with Leven in Macau, ostensibly to discuss the upcoming board meeting. Instead, he said in a later deposition, “two security guards walk in. They say, ‘You’ve got to leave.’…I get some clothes…They take me directly to the ferry.”

Jacobs sued for wrongful termination in October 2010. “We’re not saying the Steve Jacobs lawsuit is going to bring the Sands party to a halt,” a Macau-based financial intelligence company wrote in a newsletter at the time. “But we do think…he has several characteristics that make us believe he is a far more formidable opponent than any former employees Adelson has tried to face down before. These include supreme self-confidence, the courage of a lion, and the cunning of a trained lawyer. And dirt. Lots and lots and lots of it.”

Las Vegas Sands Corp. disclosed in March 2011 that the Justice Department and the Securities and Exchange Commission had launched bribery investigations based on Jacobs’ allegations. The wide-ranging inquiry delved into the Alves relationship and the aborted Adelson Center for US-China Enterprise in Beijing, according to sources familiar with the investigations. An internal Sands audit, according to the Wall Street Journal, revealed more than $50 million in payments made through Yang Saixin, a businessman who was the Chinese point man on the Adelson Center project. The ongoing federal investigation is said to be looking into whether any of the money paid to Yang was transferred to Chinese public officials in violation of the Foreign Corrupt Practices Act.

While Yang has denied any wrongdoing, an internal Sands memo describes him as highly influential; his parents “knew President Xi Jinping’s parents, implying a strong connection to Zhongnanhai (the White House of China).” Adelson, the memo added, twice met personally with Yang. Yet Adelson later denied any knowledge of the center that would have borne his name, placing the blame squarely on Sands’ former president. “Bill Weidner came to me and said that he wanted me to ask President Bush to come and cut the ribbon for the Adelson Center, and I said, ‘What’s the Adelson Center?'” Adelson recalled in a 2012 deposition. “That’s the first I heard of it.”

Even as Adelson was contending with a federal investigation, he was bankrolling the campaign of Mitt Romney, whom he called the “president-elect.” In a September 2012 interview with Politico, Adelson complained that he had been targeted by the Obama administration for his political activity. He said he feared Obama’s reelection would bring “vilification of people that were against” the president. Adelson claimed that the Obama administration’s prosecutors had leaked information about the Justice Department inquiry to suggest to fellow Republicans that “‘this guy is toxic. Don’t do business with him. Don’t take his money.'”

In 2013, LVSC acknowledged in its public filings that it had “likely” violated the accounting provisions of the Foreign Corrupt Practices Act. Adelson has admitted sitting for interviews with investigators from the Justice Department and the Securities and Exchange Commission. According to a Justice Department source, the investigation may conclude this year—which could put the outcome squarely in the middle of the presidential campaign.

In late April 2015, I watched Adelson roll his royal purple motorized wheelchair out of the elevator and onto the 14th floor of the Clark County Regional Justice Center in Las Vegas for a hearing in the Jacobs lawsuit. A bright morning sun lit the hallway as the casino magnate, surrounded by his lawyers, a bodyguard, and his wife, Miriam, made their way to the courtroom. When Adelson’s party crossed paths with Jacobs and his attorneys, the two combatants briefly locked eyes.

Adelson was in pinstripes, his leather shoes worn but polished. A gold handle capped his cane. His demeanor was calm and gentle as he chatted with his entourage about the 1966 movie Cast a Giant Shadow, about the creation of Israel. “Sal Mineo was in that,” Adelson offered cheerfully. His companions murmured but didn’t reply, perhaps because Mineo wasn’t in the film.

On the stand, Adelson pushed away a jar of M&M’s. “I can resist everything but temptation,” he told Judge Elizabeth Gonzalez. He appeared unruffled as Jacobs’ attorney repeatedly presented him with memos, emails, and contracts. “I don’t get involved in the day-to-day activities,” he said dismissively. “My age is advancing.”

But when the questions turned to Jacobs, his tone darkened. He made clear that he had wanted to fire the “incompetent” executive within months of hiring him. Jacobs, he said, had tried to run the show without him: “He tried to go behind my back to different board members to get things done, so he wouldn’t have to report to me.” And, he said, his voice rising, “He squealed—like a pig squeals—to the SEC and to the DOJ!”

Even though Rob Goldstein, Sands’ current president, admitted in testimony to having done business with Cheung Chi Tai, Adelson denied his company had any “direct connection” with the alleged gangster. At the same time, he insisted he had been right to fire Jacobs for trying to cut ties with the junkets. “He wanted to throw out 50 percent, 60 or 70 percent of the gross gaming income,” Adelson told the courtroom. “This was insanity. He purposely tried to kill the company.”

But while Adelson was defending the junkets’ importance in court, China was shutting them down. As part of a wide-ranging anti-corruption campaign, authorities raided Cheung’s Hong Kong apartment in March 2014 and later charged him with laundering $232 million. Since then, the junket industry has withered and LVSC has lost more than 58 percent of its value. Adelson, in turn, has lost some $16 billion, more than a third of his net worth.

Adelson’s wealth may have shrunk, but he’s still a high roller in politics, as was evident when he came to Washington last March to watch Netanyahu give a speech before Congress.

Sheldon Adelson, left, and his wife, Miriam, right, attend Israeli Prime Minister Benjamin Netanyahu’s March 2015 speech before a joint session of Congress. Chip Somodevilla/Getty Images.

In the days leading up to the event, Marco Rubio, said to be favored by Adelson in the 2016 election, dined with the casino magnate in a private room of the Charlie Palmer steak house, near the Capitol. The morning of the speech, Adelson, clad in a dark suit and an eye-catching fuchsia tie, claimed a prime seat. Nearby was Newt Gingrich, who, within weeks of receiving his first donation from Adelson in 2012, had declared Palestinians “an invented people.” James Hagee, the evangelist who created Christians United for Israel, came as a personal guest of Adelson. And there was Rabbi Shmuley Boteach of New Jersey, whom Adelson once supported in an unsuccessful bid for Congress. Days earlier, Boteach’s organization had run a full-page advertisement in the New York Times showing National Security Adviser Susan Rice flanked by photoshopped skulls, attacking her criticism of Netanyahu’s appearance as tantamount to supporting a “genocide” of the “Jewish people.” The ad promoted a Capitol Hill panel on Iran featuring Ted Cruz, said to be Miriam Adelson’s choice for president.

The other presidential hopefuls, too, have made sure to be on Sheldon Adelson’s radar, most notably in December, when they all appeared onstage at his Venetian resort for a prime-time debate. Last spring, Adelson sent word that if one of Jeb Bush’s campaign advisers went through with plans to address a dovish Israel policy organization, it would cost Bush “a lot of money.” Even Donald Trump, who swore off contributions from his fellow billionaires, sent Adelson a glossy booklet of photographs from a gala where he accepted an award for boosting US-Israel relations. “Sheldon,” the candidate scrawled across the cover, “no one will be a bigger friend to Israel than me!” (Adelson has promised to support whoever wins the nomination.)

The billionaire’s expanding power was underscored the morning after the debate, when the Review-Journal revealed that Adelson and his family were behind a shadowy holding company that had purchased the newspaper weeks earlier and kicked off a media frenzy. Adelson has promised not to meddle with editorial decisions at the Review-Journal, which by virtue of its location frequently covers his company, his industry, and his favorite politicians. But even if he honors that pledge, staffers have speculated that it doesn’t matter: There are any number of subordinates who will aim to please the boss.

As the sale was being finalized, publishing executives ordered a team of three reporters, over newsroom objections, to undertake a detailed investigation into the courtroom habits of three Las Vegas judges. One of the targets was Elizabeth Gonzalez, whom Adelson, just days before, had failed to get removed from the Jacobs case. In the run-up to the trial, Gonzalez had clashed with Adelson on the stand, ruled against the company’s attempts to move proceedings to Macau, and fined its lawyers for deception and withholding documents. “When the request was handed down, it seemed like little more than a waste of time and resources,” Michael Hengel, then the paper’s editor, recalled. “Now I wonder what really was behind it.”

The Review-Journal never published anything related to the investigation, but a mysterious article, highly critical of Gonzalez, appeared under a pseudonym in a Connecticut newspaper—owned by Adelson’s frontman in the Las Vegas acquisition.

That paper’s owner later took responsibility for the story and issued a mea culpa, but the episode spoke to the growing influence of a man who didn’t become one of the world’s wealthiest people for nothing. “I live on Vince Lombardi’s belief: ‘Winning isn’t everything, it’s the only thing,'” Adelson once said. “So I do whatever it takes, as long as it’s moral, ethical, principled, legal.”

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Sheldon Adelson Bets It All

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Bernie Sanders Attacks Hillary Clinton’s Ties to Big Banks

Mother Jones

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Bernie Sanders attacked Hillary Clinton’s ties to big banks, taking off the gloves on Sunday night in the last Democratic presidential debate before the Iowa caucuses.

Asked to lay out the difference between his and Clinton’s plans for dealing with big banks, Sanders responded with a personal jab.

“The first difference is, I don’t take money from big banks, I don’t get personal speaking fees from Goldman Sachs,” Sanders said, to boos and scattered applause from the audience.

Goldman Sachs paid Clinton $675,000 in speaking fees in 2015, according to public disclosures. Wall Street reform is a key plank in Sanders’ campaign platform.

“Can you really reform Wall Street when they are spending millions and millions of dollars on campaign contributions and when they are providing speaker fees to individuals?” Sanders asked. “So it’s easy to say, well, I’m going to do this and do that, but I have doubts when people receive huge amounts of money from Wall Street.”

Clinton responded by suggesting that Sanders had cast aspersions not only on her ties to financial corporations, but on President Barack Obama as well. “He’s criticized President Obama for taking donations from Wall Street, and President Obama has led our country out of the great recession…I’m going to defend President Obama for taking on Wall Street, taking on the financial industry and getting results,” Clinton said.

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Bernie Sanders Attacks Hillary Clinton’s Ties to Big Banks

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Watchdog Groups Ask Justice Department to Investigate Pro-Rubio Nonprofit

Mother Jones

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More than $5 million has been spent on television ads backing Marco Rubio’s presidential run—but none of it has come from the Florida senator’s campaign, or even the super-PAC formed to help elect him. Instead, all the spending has come from a dark money group that does not disclose its donors.

On Thursday, two campaign finance watchdog groups asked the Department of Justice to investigate whether the Conservative Solutions Project’s work on Rubio’s behalf is legal. In a letter to the tax division of DOJ, the Campaign Legal Center and Democracy 21 allege that the group exists solely to support Rubio’s candidacy, in violation of its 501(c)(4) nonprofit tax status. That tax status allows the group to raise unlimited sums—it has raised over $18 million thus far—while keeping its donors secret.

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Watchdog Groups Ask Justice Department to Investigate Pro-Rubio Nonprofit

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