It was a high-powered gathering, a GOP consultant says, of some of the "best and the brightest" conservative voices talking about the terrorism threats posed by radical Islam and Iran.
Last October, two dozen prominent analysts and activists on the right convened at a Washington hotel for an invitation-only conference sponsored by Freedom's Watch. Several weeks earlier, the deep-pocketed conservative group had burst on the scene with a $15 million advertising drive in support of President Bush's Iraq "surge" strategy and declared its plans to play a big role in the 2008 elections through issue ads and other tactics.
Among the notables at the parley were David Horowitz of the David Horowitz Freedom Center in California; Michael Ledeen, a scholar at the American Enterprise Institute; Clifford May, president of the Foundation for Defense of Democracies; and Daniel Pipes, founder and director of the Philadelphia-based Middle East Forum.
Yet the real star of the show was not a writer or an analyst but the sugar daddy of Freedom's Watch, Sheldon Adelson, a Las Vegas casino mogul with a net worth estimated by Forbes magazine at $26 billion, making him America's third-richest man behind Warren Buffet and Bill Gates.
Adelson has long been a huge--and mostly behind-the-scenes--financial angel for Republican, pro-business, and pro-Israel causes; several participants at the meeting represent groups that have benefited from his largesse. But in the last few years, as his personal fortune soared, Adelson upped the ante significantly. He plowed tens of millions of dollars into Freedom's Watch and other groups ranging from the U.S. Chamber of Commerce, to the American Israel Public Affairs Committee, to Newt Gingrich's American Solutions for Winning the Future.
Adelson has clearly become a rival of another multibillionaire, liberal mega-donor George Soros, who revels in the public spotlight while Adelson shuns the press. "I think [Adelson] was sick and tired and fed up with the message being delivered by Soros without any response or counter on the right," says a GOP consultant and activist familiar with Freedom's Watch. "Sheldon said, 'Enough is enough.' "
At the October conference, which was partly aimed at laying a foundation to push for tougher U.S. policies toward Iran, Adelson had a message for the assembled experts hoping to get additional financial grants from Freedom's Watch. Groups should collaborate more to achieve better results, Adelson announced. According to one participant, some listeners were disappointed later because "a lot of people who put in proposals [to Freedom's Watch] either never got answers or heard they were turned down."
Freedom's Watch has hit some bumps in the road in defining its mission. Originally touted as a conservative counterpart to MoveOn.org, it seemed primed to spend tens of millions of dollars in the run-up to the November elections on ads emphasizing national security and promoting free-market causes.
But the group has run few expensive ad drives since last fall and has lost some top staffers, including former President Brad Blakeman, who had been a White House scheduler for President Bush. Given the problems, some GOP consultants on K Street have grumbled about whether the group will live up to its ambitious promises.
"When you have a single-source donor, you're hostage to their whims and wants," a Republican strategist familiar with Freedom's Watch says. "When the economy is doing well, [Adelson] tends to be more generous."
William Weidner, the president of Adelson's company, the Las Vegas Sands, and also Adelson's point man on the Freedom's Watch board, doesn't seem worried. "I assume that Freedom's Watch will play a role in the elections," Weidner told National Journal. "Freedom's Watch will straighten [itself] out and will be very effective and active. With any launch there are always a few glitches."
Blakeman, whose resignation in March followed grousing about his management style, adds that Adelson is a "creature of success. He doesn't fund failures. Failure is not an option for him. To date he's been very generous."
Indeed, the 74-year-old casino titan, who is Jewish, appears to have set his sights on projects in Washington, China, and Israel that meet his ideological and political litmus tests, and that sometimes intersect tightly with his business interests. Adelson has also been a leading patron to medical and humanitarian organizations.
Well known for his staunchly anti-union views and his close links to the Israeli Right, including Likud Party leader Benjamin Netanyahu, Adelson is, by many accounts, a hard-charging dynamo. He likes to immerse himself in the details of the many causes he champions while assiduously avoiding the limelight.
Adelson's philanthropic and business projects are far-reaching, Weidner says, and they keep both men plenty busy. Weidner often pinch-hits for Adelson on big projects. But Adelson "likes to be engaged," Weidner says. "His vision is a global vision. Sheldon has dozens and dozens of things [going on]. We have a tag team in certain aspects."
Over the past three years, for instance, Weidner has served on the board of the U.S. Chamber of Commerce at the same time that the Las Vegas Sands has financially backed major China projects for the chamber. A key project has been a 16-city grassroots tour of the United States featuring American business leaders and Chinese officials looking to boost trade between the two countries. Myron Brilliant, the chamber executive who oversees the organization's China trade work, says that the Sands "has been very involved" in the tour since 2006. Weidner conveys the message, Brilliant adds, that the Las Vegas Sands has a "commitment to the U.S.-China relationship."
That commitment is firmly rooted in the company's business investments. In August, the Sands opened the world's largest casino in Macau, an island located off Hong Kong that is a former Portuguese colony--and the only place in China where gambling is legal. Weidner says that the Sands so far has invested $6 billion in the project and plans to put in another $6 billion to add convention facilities.
As China hosts the Olympics in August, the Sands will launch a nonprofit and complementary organization, the Adelson Center for U.S.-China Enterprise, in Beijing.
Occupying two floors of a high-rise, the center will advise and assist small and midsize U.S. companies seeking to enter the China market. The center, which Weidner says will cost about $100 million, will offer rental apartments for visiting executives who come to meet their Chinese counterparts, and it will work closely with a parallel Chinese entity.
"The goal is to help companies locate appropriate partners in the marketplace," according to Brilliant, who is serving as an outside adviser to the project, separate from his chamber role. He says, "The Sands is placing a big bet on China's economic future," and the center is a way of "giving back." Brilliant adds that "the more they drive state and local enterprises to use the center, the more they might use their convention business in Macau."
Weidner says, "We want to demonstrate to the mainland Chinese that we're more than an entertainment company. Our rationale for the center is to improve the U.S.-China trade relationship." The Adelson Center will invite prominent American and Chinese political leaders attending the Olympics to its own opening ceremony.
Adelson's opulent Venetian Macao, which is named after one of his big properties in Las Vegas, is his second casino complex on the booming island. Next year he is set to open a $4 billion casino in Singapore, and he is also eyeing new markets in Japan, the Philippines, South Korea, and Taiwan. Some of those countries permit casino gambling, but some don't.
Those who know Adelson's business well attest to the Macau project's importance to his financial empire and his political interests. "They believe they have developed a model that will be key as the Asian market expands," says Frank Fahrenkopf, the president of the American Gaming Association, speaking of the Las Vegas Sands strategy.
The Sands left the association several years ago, but Fahrenkopf says that serious talks are under way about the company's rejoining this year. The talks seem to have been spurred by Adelson and Fahrenkopf's mutual interest in the Asian markets. In June, the AGA will host an Asian trade show at the Venetian Macao.
Given Adelson's vast wealth and wide-ranging interests, it's not surprising that he's a rising star in Republican circles in Washington, evidenced by the attention lavished on him at the White House Hanukkah party last year. "People were falling all over themselves to meet Sheldon," says one person who attended. "There were two receiving lines--one for Sheldon and the other for the president."
The Bush administration has recognized Adelson in other ways, too. In January, he was appointed to a four-year term on a major panel--the Advisory Committee for Trade Policy and Negotiations--which makes recommendations to the president on trade initiatives.
One thing that Adelson doesn't seem to crave is attention from the media. He declined to be interviewed for this story, but Weidner spoke to National Journal in two long phone interviews.
Adelson's doings in Washington have also attracted the attention of Karl Rove, the former White House deputy chief of staff, who has offered strategic advice to Freedom's Watch and to Adelson personally. "He's very generous with his time and ideas," Weidner says of Rove. "He's an invaluable asset. He gives up his time for those things he believes in."
Rags to Riches
Adelson's roots and his Horatio Alger-like rise to the top of the business world help explain the passion behind his political and economic views. He was born in Boston in 1933 to Jewish immigrant parents; his father came from Lithuania and his mother from Ukraine. As a teenager, Adelson sold newspapers and did odd jobs in the neighborhood. He attended the City College of New York but dropped out. He dabbled as a mortgage broker and a court reporter, and tried other jobs before he hit on his first success. In 1979, he founded Comdex, which grew into the computer industry's largest U.S. trade show. In 1995 he sold Comdex in a package deal valued at $862 million.
Several years earlier, in 1989, Adelson made his first foray into the gambling business with the purchase of the Sands Hotel and Casino, long renowned as the haunt of Frank Sinatra, Dean Martin, and other celebrities. Eventually the old landmark was torn down. In its place Adelson built the Venetian Resort Hotel Casino and the nearby Sands Expo and Convention Center.
A key to Adelson's phenomenal success with his casino enterprises was his effort to attract business conventions to Vegas, an innovation that he helped pioneer. While most casinos focused on filling their hotel rooms on the weekends, Adelson saw big opportunities during the weekdays. He cashed in handsomely.
As his fortune grew, Adelson earned a reputation for being fervently anti-union. That put him at odds with most of the other casinos on the Strip, all heavily unionized.
Adelson's "anti-union views are of a piece with a much broader extremist ideology that he employs for his own financial benefit," says John Wilhelm, one of two presidents of UNITE HERE, the key union of casino and hotel workers in Las Vegas. "The economic growth in Vegas has been made possible by a very positive relationship between the unions and all the other major gaming companies except his."
But incurring organized labor's wrath hasn't slowed Adelson's empire-building or his lavish lifestyle. He has five private jets (plus at least six owned by the Sands Corp.), and he owns homes in Las Vegas; Malibu, Calif.; Boston; and Tel Aviv. Adelson's biggest payoff came in 2004 when he took his company public: In a single day his net worth jumped by $6 billion.
His great wealth has allowed him to place larger bets in business and politics. But well before he amassed his fortune, Adelson was involved in philanthropic and political activities. Much of his early focus was on Jewish and Israeli causes, a passion that has remained constant. Adelson's wife, Miriam, a physician, is a native Israeli. Not long ago, they established a family foundation that has pledged to donate $200 million annually to Jewish causes and projects. The Adelsons have donated about $60 million to Taglit-Birthright Israel, which sponsors trips to Israel for young Americans, and at least $25 million to the Yad Vashem Holocaust memorial in Israel.
Separately, Adelson was the primary investor in a conservative-oriented free Israeli daily paper Yisrael-Hayom that debuted about a year ago. This year he reportedly offered $50 million to buy Israel's second largest paper, Maariv, but the deal has fallen through, according to an Adelson spokesperson.
Steve Grossman, former chairman of the Democratic National Committee and an old friend of Adelson's from Boston, recalls that when he was on the board of the American Israel Public Affairs Committee in the late 1980s, and later was AIPAC's president, he encouraged Adelson to get involved with the powerful lobby group. Several years later, Adelson and some of his early business partners became the principal underwriters of trips to Israel sponsored by an AIPAC educational affiliate, an effort that has taken scores of lawmakers to see Israel up close. AIPAC officials--and sometimes Adelson--have accompanied lawmakers on these trips, some of which used Adelson's planes. Sources say that Adelson also made a very sizable contribution to help build the group's new Washington headquarters, slated to have a gala opening ceremony next month.
Similarly, Adelson has been an active and generous board member of the Republican Jewish Coalition, another pro-Israel group that boasts strong ties to the Bush administration. Among other prominent board members of the RJC are Ari Fleischer, the former White House press secretary; Ken Mehlman, the former chairman of the Republican National Committee; and Mel Sembler, a Florida real estate magnate who was ambassador to Italy for the Bush administration.
Adelson's contributions to the coalition go beyond money. A few years ago, the RJC used one of Adelson's jets for an Israel trip that included Mehlman and several others. In February, the group traveled to Adelson's Venetian facilities in Las Vegas for its winter get-together. Clifford May of the Foundation for Defense of Democracies, who moderated a panel on energy security at the meeting, recalled being impressed. "Adelson sat there for the whole thing and seemed to be listening. It's a hugely important issue but sometimes a dry issue." (Adelson recently gave an affiliate of May's foundation about $2 million to run an ad drive centering on the Foreign Intelligence Surveillance Act.)
"Sheldon's got a huge heart and a checkbook to match," says Fred Zeidman, an RJC board member who is helping to spearhead fundraising in the Jewish community for presumptive Republican presidential nominee John McCain.
Adelson's ties to the RJC were instrumental in the birth of Freedom's Watch. The idea of creating a group that could take on MoveOn.org was kicked around at a winter meeting of the RJC in Florida in early 2007, a gathering that featured a speech from Vice President Cheney. As it was conceived, Freedom's Watch would go beyond countering MoveOn.org. It would also provide funding for many like-minded conservative groups, a strategy that Blakeman likened to serving as the "Johnny Appleseed" of conservative causes.
The original five-member board of Freedom's Watch overlapped closely with the RJC's and boasted tight ties to the Bush White House. Besides Blakeman and Weidner, the board's members were Sembler, Fleischer, and Matt Brooks, the executive director of the RJC.
Freedom's Watch was set up as a nonprofit 501(c)(4) tax-exempt organization, enabling donors to give without having their names or contributions disclosed. Under the tax code, such a group is legally obligated to spend more than half of its money on nonpolitical activities. To date, the group has spent slightly more than $30 million on ads and other projects. Housed in the former offices of the Washington Capitals hockey franchise in D.C.'s Chinatown, Freedom's Watch has about two dozen employees who do research and focus on issues ranging from terrorism and national security, to unions and free markets--some of which the group plans to spotlight in issue ad buys in the coming months.
Originally, Freedom's Watch tried to downplay Adelson's big bucks, boasting that it had several wealthy donors--citing Adelson, Sembler, conservative philanthropist John Templeton, and others--and its leaders talked about spending as much as $200 million during the campaign season. But several sources have confirmed that Adelson has furnished the vast majority of Freedom's Watch funding. The group is still hunting for a new president, a job that is said to pay between $500,000 and $1 million annually.
Last month, as Freedom's Watch revamped its top staff in the wake of Blakeman's departure, it recruited Carl Forti, a veteran campaign strategist who worked on independent expenditures and communications for the National Republican Congressional Committee for almost a decade. GOP consultants say that Forti's arrival as the top adviser on election issue advertising suggests that Freedom's Watch will focus heavily on a few dozen House races and may not produce many ads for Senate contests or the presidential campaign.
Immediately after Forti arrived, the group launched a $400,000 ad blitz in Louisiana aimed at helping GOP candidate Woody Jenkins by accusing his Democratic opponent, Don Cazayoux, of backing higher taxes. But the effort seems to have backfired. A CBS affiliate in Baton Rouge pulled one of the ads off the air after deeming it deceptive. On May 3, Jenkins lost the special election to fill the seat of Rep. Richard Baker, R-La., who retired in February.
The Democratic Congressional Campaign Committee, which has been worried about Adelson's deep pockets, filed two complaints with the Federal Election Commission charging that the group illegally coordinated its ads with the NRCC and that Freedom's Watch failed to disclose its donors. The DCCC has also filed a complaint with the IRS asking that the agency reclassify Freedom's Watch as a "527" organization, which would require it to publicly disclose its donors and their contributions. Spokesmen for Freedom's Watch rejected the DCCC accusations as frivolous, saying that their group has done nothing wrong and that it is following all campaign laws and IRS rules. An NRCC spokesman called the complaints "delusional."
In recent weeks, Freedom's Watch has also ratcheted up e-mails and press releases pummeling House Speaker Nancy Pelosi and other Democrats for their positions on gas prices, the mortgage crisis, and other issues.
Enough to Spread Around
The stakes are high. The NRCC, strapped for cash compared with its much flusher Democratic counterpart, has welcomed the efforts of Freedom's Watch. Some GOP operatives hope that the Adelson-funded group can help level the playing field for their underfunded candidates.
More broadly, Weidner points out, "Adelson is an entrepreneur and a free-market kind of guy. The activities of Freedom's Watch relate to his beliefs and activities." The group will focus its resources partly on "freedom in the workplace and free trade," Weidner says, adding that the group is looking to help people "who support international trade. It's the political meets the business."
Likewise, Weidner stresses that the group will work hard to fight union-backed "card-check" legislation that passed the House once and is expected to be introduced again in 2009. It would make it easier for unions to conduct workplace organizing campaigns by collecting signatures on union representation cards.
Yet, while Freedom's Watch has trumpeted its interest in the issue, business lobbyists so far see no evidence of any spending. Last month, Freedom's Watch hosted a meeting with about a dozen individuals, including a few business lobbyists and Rove, who is an informal adviser to the group. "We met with him to talk about the card-check issue very broadly," one participant recalls. "We talked about what business is doing." Another attendee adds that Rove "is interested in the issue as one we can fight as part of the conservative agenda." That was not the only time that Rove met with the group. Not long after he left the White House, he dropped by during a discussion of the ad blitz that the group ran late last summer backing the surge strategy and Army Gen. David Petraeus.
One GOP consultant who has met with Rove a few times this year says that Adelson and Rove have chatted about Freedom's Watch. No longer constrained by his role as President Bush's top political adviser, Rove has been talking to Republican donors, including Adelson, and strategists about options for setting up independent groups this election cycle that could spend millions of dollars on issue ads in the presidential contest and congressional races. This consultant adds that Rove is now involved "up to his eyeballs" in discussions about "who is going to do the presidential, who is going to do the Senate, and who is going to do the House."
The consultant says he expects that Adelson will help to fund other outside groups in addition to Freedom's Watch. Adelson's "got enough to spread around," he adds. "He wants to make a difference." But Adelson's vast wealth creates some risks when it comes to dealing with other big donors, the consultant cautions. "The danger of Sheldon's wealth is not giving others the ability to play. There are other wealthy Americans who want to play important roles, and they should be given the opportunities to be equal partners."
But others who have known Adelson for years suggest that his go-it-alone modus operandi is deeply ingrained. "Sheldon is a hard-charging, hard-driving, pre-eminently successful entrepreneur," says Grossman (who jokes that Adelson has called him "my favorite Democrat"). Adelson, he says, "sweats the details."
In Weidner's view, the hullabaloo concerning Freedom's Watch and Adelson's style is tiresome and overblown. "It's like watching a soap opera," he says. "Is [Freedom's Watch] effective? We think it will be. The proof of the pudding is in the tasting." The bottom line, according to Weidner: "Our business interests are primary. We're free-market guys."
In an interview with Bloomberg in 2006 Adelson said, "I've already figured out when I am going to be No. 2 and No. 1" on the list of wealthiest Americans. That's what many conservatives and GOP stalwarts are banking on.
This article appears in the May 10, 2008 edition of National Journal Magazine.
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