Nevada Court | Adelson may have to answer Jacobs’ firing claims

Sheldon Adelson

Sheldon Adelson will be confronted in court for the first time with allegations of wrongdoing by a man he fired five years ago as the head of his Macau casinos.
Adelson, the 81-year-old billionaire founder and chairman of Las Vegas Sands Corp., is among the casino operator’s top executives listed as witnesses for a hearing starting Monday in a lawsuit brought by Steven Jacobs, the former chief executive officer of the company’s Macau unit.
Jacobs hasn’t had a chance during the 4 1/2-year-old Nevada case to put his ex-boss on the witness stand. He claims he was fired for balking at what he says were illegal demands, including to dig up information about high-ranking Macau government officials that, according to a court filing, could be used to “exert leverage.”
“There’s going to be mudslinging,” said Greg Doll, a lawyer at Doll Amir & Eley LLP in Los Angeles who isn’t involved in the case. “You can bet your bottom dollar that Jacobs is going to bring up stuff that is uncomfortable for Sands China and for Adelson in particular.”
Adelson denies allegations he ordered secret investigations into the business and financial affairs of government officials, as well as Jacobs’s claim that he personally approved a strategy condoning prostitution at the Macau casinos. Sands has said in court filings that Jacobs was dismissed for working on unauthorized deals and violating company policy.
Adelson called Jacobs’s allegations “outright lies and fabrications” in a statement reported by the Wall Street Journal, spurring Jacobs to add a defamation claim against him in the Nevada lawsuit. Las Vegas Sands said in a January court filing that Jacobs is using the lawsuit as a “platform to denigrate and defame” the company and its chairman. Ron Reese, a Sands spokesman, declined to comment before the hearing.
Adelson has said in court filings that the investigation of Macau officials, which Jacobs alleges Adelson requested, was actually commissioned by Jacobs and that he didn’t learn about it until after Jacobs had been fired.
“I never asked or authorized Jacobs to conduct a private investigation of or ‘create a dossier’ on Macanese officials,” Adelson said in a March 2013 declaration. “We believe unequivocally that Jacobs initiated the investigation on his own for his own purposes.”
Adelson, the world’s 25th richest person, has testified about his aversion to out-of-court settlements.
Jacobs won court permission to cite as evidence the work of a Hong Kong-based risk consultant who looked at alleged ties between Sands China business associates and organized crime. According to court filings, one report, commissioned by the company, involved an alleged organized crime figure who was operating VIP rooms in casinos on the island. The second, also commissioned by the company, concerned a Hong Kong movie producer with alleged ties to a triad. The report on Macau officials was the third one, with Jacobs and Adelson disputing who commissioned it.
Jacobs said in court filings, without disclosing the consultant’s findings, that the reports will expose the company to “serious political and legal problems.” He is seeking to enter them as evidence at the hearing.
The company has said Jacobs stole the reports and that they contain “extremely sensitive, highly confidential information.” In January, J. Randall Jones, a lawyer for Sands China, criticized Jacobs’s use of them in the lawsuit. “In some cases, they would call this blackmail,” Jones said.
Todd Bice, a lawyer for Jacobs, told the judge Sands wants to keep them out of the case because they are embarrassing and contradict Adelson’s public statements. Jacobs has said in court filings that he took the reports from the company when he left and returned the originals after Sands’ lawyers requested them.
Bice didn’t respond to phone and e-mail messages seeking comment before Monday’s hearing.
Adelson sued Jacob for defamation in Florida, where Jacobs lives. Jacobs won dismissal of that case and Sands told the court last year it would appeal the ruling. Jacobs also defeated Sands’ attempt to remove Nevada District Court Judge Elizabeth Gonzalez from the case over claims she’s biased against the company.
Sands China sought the judge’s removal after she ruled the company won’t be allowed to call any witnesses at the hearing. She imposed that sanction in March over what she saw as its foot-dragging on sharing evidence with Jacobs. The Nevada Supreme Court rejected efforts to disqualify the judge.
Formally, the hearing will address the narrow legal question of whether Sands China, which is incorporated in the Cayman Islands and listed on the Hong Kong exchange, can be sued in Nevada. Jacobs says the reports, along with other evidence, will show Adelson and Las Vegas Sands controlled the Macau operations, including ordering the investigations there.
Sands China contends Jacobs shouldn’t be allowed to sue it in Nevada because the Macau unit doesn’t do business there. MDT/Bloomberg