Acting Attorney General Matthew Whitaker said on Friday that nothing “corrupt” occurred when the Department of Justice suddenly changed an eight-year-old legal interpretation in a way that clearly benefited President Donald Trump’s biggest political donor, casino oligarch Sheldon Adelson.
During a House Judiciary Committee hearing, Rep. Jamie Raskin (D-Md.) asked Whitaker whether he was involved in the January decision of the DOJ’s Office of Legal Counsel to alter an established legal interpretation of the Federal Wire Act in order to further limit online gambling and whether he had any communications with Adelson or any of the billionaire’s lobbyists. The new opinion reversed a 2011 OLC interpretation of the act that had applied a prohibition on online gambling strictly to online betting on sports. State officials fear that the expanded ban could imperil their online gaming industries and even negatively impact the administration of state lotteries.
Whitaker said that he was not involved in the decision and that he has never personally met with or spoken to Adelson.
“Your inference that somehow that process was corrupted or corrupt is absolutely wrong and the premise of your question I reject,” the acting attorney general said.
Raskin was not satisfied with Whitaker’s answers. The congressman and constitutional law professor told HuffPost that he would submit more questions to Whitaker about the OLC interpretation after Friday’s hearing.
“This definitely bears further investigation,” Raskin said. “When and where and by whom remains to be seen.”
The investigation may come from officials in states with legalized online gaming, Raskin said. The OLC’s sudden change of heart caused some of them to wonder whether any improper influence from Adelson, the biggest political benefactor of the president and the Republican Party, had affected that new take on the law.
Sheldon Adelson and his wife, Miriam, pumped at least $205 million into campaign and party committees and super PACs to support Republican politicians over the last two election cycles, according to Federal Election Commission records. The biggest contributions from the Adelsons went to super PACs that helped elect Trump and congressional Republicans. The couple donated $85 million to a super PAC supporting Senate Republicans, $70 million to a super PAC helping elect House Republicans and $30 million to two pro-Trump super PACs. Sheldon Adelson was also a major funder of a dark money nonprofit group that helped Trump win the 2016 election, according to The New York Times.
More recently, the Adelsons contributed $500,000 to a legal defense fund set up for Trump and his associates who are being investigated by special counsel Robert Mueller. They were the only donors to the fund.
The revised legal interpretation, issued during the partial federal government shutdown, relied on materials submitted to the Justice Department’s lawyers by lobbyists for a group set up by Adelson, according to The Washington Post.
Now some of the affected states are fighting back. The Justice Department should “withdraw its opinion” because it rests on faulty legal grounding and could undermine state laws regulating online gaming and lotteries, argued a Feb. 5 letter to the DOJ from New Jersey Attorney General Gurbir Grewal and Pennsylvania Attorney General Josh Shapiro. Grewal and Shapiro also issued a Freedom of Information Act request for any communications between the department and Adelson and his lobbyists.
Besides the new interpretation itself, questions are being raised about its timing. Whitaker and others from the DOJ met with White House officials during the government shutdown to tell them of the plan to issue the new interpretation, according to The Intercept. This meeting came ahead of the Senate’s confirmation hearing for William Barr, Trump’s choice for a permanent attorney general. Barr had previously stated that he had no interest in reversing the 2011 OLC opinion.
Since 2014, Adelson, the owner of the Las Vegas Sands Corporation ― which runs casinos in Las Vegas, Macau and Singapore ― has led an effort to persuade politicians in Washington to ban all online gambling. The 85-year-old billionaire argues that the legalization of online gaming will hurt the bottom line for casinos. Banning or restricting online gaming, on the other hand, would hurt his competitors like MGM that invested in the new industry after the 2011 ruling.
So Adelson launched the Coalition to Stop Internet Gambling and hired a bevy of revolving-door lobbyists, including former Democratic Sen. Blanche Lincoln of Arkansas and former Republican Gov. George Pataki of New York. Social conservatives like Ralph Reed were encouraged to rally the grassroots. The lobbying group doesn’t campaign on the grounds that Adelson’s hefty pocketbook may suffer from online gaming. Instead, the coalition argues that online gaming is bad for the children.
The Coalition to Stop Internet Gambling initially sought to pass federal legislation to achieve its goal. But bills introduced by Sen. Lindsey Graham (R-S.C.) and then-Rep. Jason Chaffetz (R-Utah) floundered in Congress amid opposition from both parties and lobbying from those casino companies that had invested in online gaming. Adelson’s lobbying group then focused on convincing the Justice Department to simply issue a new legal opinion overturning the old one.
Charles Cooper, a Washington lawyer working for Adelson, lobbied the Justice Department, sending a memo in 2017 that made the legal argument for upending the 2011 opinion, according to reports by The Wall Street Journal and The Washington Post.
January’s reversal wasn’t the first big victory for Adelson under the Trump administration. Adelson is a longtime supporter of right-wing political parties in Israel and the idea of locating the U.S. Embassy in Jerusalem. In May 2018, he was a guest of honor at the opening of the new U.S. Embassy in Jerusalem after Trump decided to move it from Tel Aviv.
The Trump administration’s decision to withdraw from the Iran nuclear deal was also sought by Adelson, who had previously suggested the U.S. use its own nuclear weapons to destroy Iran’s nascent nuclear program. Trump lobbied Japanese Prime Minister Shinzo Abe on behalf of Adelson’s efforts to liberalize Japan’s gaming laws and allow him to expand his Asian casino operations. And last year Trump awarded Miriam Adelson the Presidential Medal of Freedom, the nation’s highest civilian honor, just one month after she contributed to his legal defense fund.