Heller: Adelson did not violate any law

Monday, March 29, 1999 | 11:04 a.m.

CARSON CITY -- Secretary of State Dean Heller today cleared Las Vegas hotel owner Sheldon Adelson of allegations that he illegally laundered $80,000 in campaign contributions given to a county commission candidate.

The money, which was filtered through 16 corporations connected to Adelson and given to unsuccessful commission candidate Mark Smith last year, was not covered by the current state law, Heller said.

Heller, chief election officer for the state, also said Adelson did not violate any law when he spent hundreds of thousands of dollars on television advertisements last year criticizing three incumbent county commissioners.

The secretary of state released the results of his investigation in a letter to Common Cause, which last October asked for the investigation.

Heller said he has consulted with the state Attorney General's Office and with Adelson. "I believe that no further action is justified in this matter."

Jim Hulse, president of Common Cause, said he has not yet seen the letter but added "On the surface, it appears there's nothing we can do. I can understand the secretary of state. He's locked in.

"So there's a loophole in the existing law that we will have to remedy," Hulse said.

"It may be tough," because the Legislature is nearly half over, and no new bills may be introduced.

"We will have to watch for the opportunity," Hulse said, referring to getting an amendment to an existing bill.

Adelson could not be reached today for comment.

The complaint filed Oct. 14 last year said an investigation by Common Cause, a watchdog of government, found that 16 corporations associated with Adelson had each contributed $5,000 to the Smith campaign.

The organization suggested many were shell corporations in which Adelson filtered through $80,000 in contributions.

Nevada law limits a donor to $5,000. The investigation, by the group, found only three corporations had business licenses in Las Vegas, and Common Cause said it appears the other corporations didn't have sources of incomes or $5,000 to contribute.

The group said this laundering of campaign funds is contrary to law restricting the donation to $5,000 from a single source, Adelson.

Heller said a 1994 legal opinion by the Attorney General's Office holds that each business may give the maximum amount allowable by law ($5,000) "irrespective of its relationship to other business organizations."

Heller said Adelson, through his lawyer, said each of the 16 corporations were legitimate business interests that were pursuing development of the $1.5 billion Venetian hotel-casino, scheduled to open next month.

Heller said he was informed Adelson was not the only one involved in these 16 corporations.

"It also appears that most of these entities were in existence from varying lengths of time before the complained-about acts were committed," Heller said.

"Under the 1994 Attorney Genera's opinion, I find no factual basis for aggregating the contributions of these business entities."

Common Cause also alleged that Adelson bought several hundred thousand dollars of television time to run ads against the three incumbent county commission, also a violation. Adelson, according to his spokesman earlier, felt the county commission was working with organized labor against him.

"The U.S. Supreme Court has held that campaign contributions are an exercise of free speech, and it established the distinction between 'express advocacy' and 'issue advocacy,' " Heller said.

Unless the advertisement expressly said "vote for" or "vote against," they are political free speech and limits cannot be placed on spending, Heller said.

"Thus, unless the ads specifically advocated the election or defeat of a candidate, they are issue advocacy under Buckley v. Valleo (the Supreme Court case) ... and are entitled to protection as political speech under the U.S. Constitution," Heller said.

Hulse said the Buckley decision was the "same kind of cul-de-sac" Common Cause has run into in trying to put limits on campaign spending in other areas. "It's the same unfortunate Buckley amendment."

Common Cause, in its October letter, noted the anti-laundering law was enacted in 1997.

The group said in the 1996 election Adelson gave $96,000 to County Commission candidate Lance Malone through personal funds and nine corporations.

Heller sent copies of his letter to Sen. Ann O'Connell, R-Las Vegas, who heads the Government Affairs Committee and to Assemblywoman Chris Giunchigliani, D-Las Vegas, chairwoman of the Elections, Procedures and Ethics Committee. These committees handle campaign issues.

Heller said he wanted to make them aware of what has happened and to give them a chance, if they want, to change the law to stop the bundling of contributions.

He said, however, that even if the Legislature "plugged this loophole," there would still be no limit on what a person could spend on "issue advocacy" campaigns.