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Gaming Guru

Tim O'Reiley
 

Expert witnesses in Sands trial debate influence, relationships

8 May 2013

LAS VEGAS -- An expert on business and politics in China testifying for Richard Suen on Tuesday appeared to come away with a subtle but visible advantage over one for onetime client Las Vegas Sands Corp.

According to UCLA professor James Tong, who sat on the witness stand on Monday, an adage chiseled in the stone wall in the Clark County Regional Justice Center atrium embodies a fundamental premise of guanxi, the Chinese concept of mutually trusting relationships. The adage, within easy view of the jurors during their breaks, is attributed to Confucius: “Recompense injury with justice and recompense kindness with kindness.”

Suen has built his breach-of-contract claim that Sands owes him $328 million for helping the company gain its entry into the lucrative Macau market on a foundation of guanxi that he says he helped the company accumulate with top Chinese government officials. Even when the Sands bid stumbled on a couple of occasions, supportive Chinese officials helped put it back on track, according to Suen.

In particular, Tong said, Sands Chairman and CEO Sheldon Adelson’s phone call to former House majority whip Tom Delay to try to squelch a congressional resolution opposing China’s then-pending bid for the 2008 Olympics was the sort of gesture that built a reservoir of guanxi. What was important, he said, was that Adelson asked for nothing in return to assist China with a high national priority.

“It is consistent with the principles and practices of guanxi that Adelson’s timely ‘Olympics favor’ would engender and obligation of reciprocity on the part of China,” Tong said.

But on Tuesday, a former U.S. diplomat who did a pair of tours in the Beijing embassy and currently works in China, discounted the importance of guanxi.

“It is among the most common words in Chinese,” said William McCahill, now a managing director for the boutique investment firm Religare Capital Markets. “It is nothing mysterious or mystical. It is just the Chinese word for relationships.”

McCahill, in describing his background, drew an audible “wow” from one juror when he said his diplomatic commission had been signed by both former President Gerald Ford and Secretary of State Henry Kissinger.

Likewise, Tong and McCahill took opposing positions of how the Chinese government ruled Macau after Portugal relinquished its long-time colony in late 1999.

While the Basic Law, akin to a constitution, promises to preserve Macau’s capitalist economy and grant it broad internal autonomy, Tong testified that it comes with limits. The starting point is that Macau’s chief executive, then Edmond Ho, is appointed by and answers to a vice premier in Beijing.

McCahill, who spent a quarter century in the U.S. Foreign Service before retiring in 2000, said the government has enshrined autonomy for Macau and Hong Kong as a pillar of its policy for three decades under the banner of “one country, two systems.” The ultimate target, he said, was the give credibility to a framework for ultimately regaining control of Taiwan.

At the end of the day, however, the case took an unusual twist. Adelson told his attorneys he wanted to take Tuesday night to think about a return trip to the witness stand Wednesday. He testified at the beginning of the case, now a month old, but after being called by Suen.

“I characterize (this) as nothing less than a stunt by somebody who has already been found by the court to have acted improperly in a willful fashion on the first day of the case,” said Suen attorney John O’Malley, after the jury had left for the day. “Now, in day 30, Mr. Adelson is pulling another stunt."

While on the stand, Adelson improperly showed printed material to the jury that had not been admitted as evidence.

For several days, Sands attorneys had raised the possibility of Adelson returning to the stand. But O’Malley said the delay request showed “he had been calling the shots in this case” when it came to presenting a defense.

Sands attorney Lawrence Robbins countered that Adelson had not controlled litigation strategy any more than any other client.

“We are not here as marionettes,” he said. “We are here as officers of the court.”

He also said it was not a “stunt” to ask for more time, given the high stakes for both him and his company.

To strike a balance, Clark County District Judge Rob Bare gave Adelson until 8 p.m. Tuesday to make up his mind. This gave him an opportunity to consult with his attorneys but not severely compress the time that O’Malley has to prepare both a cross-examination and closing arguments scheduled for Thursday.

At the same time, it would allow a court deputy to call all the jurors to appear Wednesday, now slated as an off day for them.

Currently, all the attorneys and Bare expect to turn the case over to the jury on Friday.