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Adelson’s Nevada Spending Illustrates Dangers Of Campaign Finance Wild West

Why would the world’s richest casino owner spend so much on a state attorney general race?

March 6, 2017

Cross-posted at The Huffington Post.

Last month, The Nevada Independent reported that the chair of the Nevada Gaming Control Board secretly recorded a meeting last April with Nevada Attorney General Adam Laxalt. According to the story, Laxalt suggested the board intervene in a lawsuit on the side of the attorney general’s biggest donor, Las Vegas Sands CEO Sheldon Adelson. Laxalt’s 2014 campaign took $55,000 from Adelson, his family, and Sands, and his political action committee took another $50,000.

That $105,000 is certainly enough to give cause for concern whether Laxalt’s actions were motivated more by gratitude for campaign cash than his duty to serve the people of Nevada.

Yet a closer look at the 2014 race shows that Adelson likely spent far more — 14 times more — to elect Laxalt. That spending was only possible because of the Supreme Court’s Citizens United decision. And Laxalt’s actions on Adelson’ s behalf may be a textbook example of how dramatically the Court misread the potential of unlimited political spending to corrupt government action.

In addition to his contributions to Laxalt, Adelson also gave an astonishing $1.5 million to the Republican Attorneys General Association (“RAGA”) in 2014, making him the group’s second-biggest donor. RAGA is active in several states, and there’s no indication that Adelson’s money was earmarked for Nevada, but consider the circumstances.

Laxalt was locked in a tight race and one of his top campaign advisers was an Adelson lobbyist. The casino magnate had never given to RAGA or its parent organization before, according to the Center for Responsive Politics. But RAGA went on to pour an estimated $1.8 million in “independent expenditures” into Laxalt’s race, spending far more on TV than the candidate himself. It was RAGA’s top contest that year.

Why would the world’s richest casino owner spend so much on a state attorney general race? Adelson has long sought tougher restrictions on online gambling, a business that competes with his brick-and-mortar casinos. Law enforcement officials like attorneys general can be powerful allies in a push for a crack down. Indeed, a group of attorneys general, including Laxalt, sent a letter to Congress late last year supporting legislation that would prohibit states from legalizing online gambling.

Plying attorneys general with campaign cash and invitations to lavish conferences where officials rub elbows with corporate lobbyists has become a routine part of the influence industry. Adelson’s company was a “platinum sponsor” of RAGA’s summer conference at a luxury resort in San Diego in 2014, and a reporter in attendance overheard a top lobbyist for Sands set up a meeting with Florida’s attorney general.

Adelson is also active in federal races, of course. In 2016, he and his wife gave $20 million to the Senate Leadership Fund, a super PAC connected to Majority Leader Mitch McConnell that was the biggest spender in last year’s Senate elections. The day after those donations were made public, GOP senators introduced the online gambling bill Adelson has been pushing for.

But state and local elections often pose the greatest risk of corruption through political spending. These contests are relatively inexpensive, making it affordable for special interests to influence races where the elected official might regulate their industry. Or ask the state to intervene on their behalf in a private lawsuit.

Adelson bet big on Laxalt. He was constrained by contribution limits in how much he could give directly to the candidate. But there are no contribution limits on outside groups like RAGA, so the great majority of Adelson’s money went through the association. A little more than a year after those contributions, Laxalt announced his support for the online gambling ban.

Then last March, Adelson asked for Laxalt’s help. Adelson had been sued for wrongful termination by a former high-ranking executive, and he wanted the state Gaming Control Board to intervene in the case and declare certain documents confidential. It was that request that caused Laxalt to ask for an urgent meeting with the gaming board’s chair, prompting him to reach for his tape recorder. In the end, the board refused Adelson’s request, and the suit was settled for a reported $75 million last June.

Do Laxalt’s actions have the appearance of corruption?

According to the Supreme Court’s Citizens United decision, which has led to a an explosion of spending by unlimited-contribution groups like RAGA, Adelson’s outside money can’t possibly have corrupted Laxalt because the candidate never controlled the money. All that largesse was spent on Laxalt’s behalf, but not at his direction.

Of course, it makes intuitive sense that it’s easier to bribe a candidate with money put directly in their hands than money given to a third party who will spend it advocating for the candidate. But it’s also intuitively obvious that the fundamental assumption of Citizens United — that it’s impossible for money given to someone else to have a corrupting influence on a candidate — is misguided, especially when the amounts are so large.

We must acknowledge the potential for unlimited outside money to create actual corruption or the appearance of it. Both erode the public’s faith in government. The Supreme Court should fix its mistake and allow legislatures to enact sensible campaign finance regulation.