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Gingrich Donor Adelson Scared Israeli TV Station Into Humiliating Apology

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The billionaire Sheldon Adelson's $5 million donation to Republican Newt Gingrich's presidential campaign, coupled with another $5 million from Adelson's wife Miriam, has been called "among the largest known political donations in U.S. History." But the Boston-native Adelson also puts his mighty wealth and influence to work in his adopted home of Israel. His recent successful press for a retraction of an unpleasant news story nearly resulted in the closing of one of the country's only two independent commercial TV news stations, after a fawning on-air apology sparked staff resignations from a "60 Minutes"-type show and a debate over what one journalist termed "one of the biggest crises in Israeli media."

The year-long controversy came to a temporary halt last Tuesday. Israel's private, financially-troubled Channel 10 narrowly escaped forced closure when a member of Prime Minister Benjamin Netanyahu's cabinet granted it a one-year extension to repay almost $16 million in back government taxes and royalties and reapply for a broadcast license. This came despite Netanyahu's earlier opposition to a reprieve for Channel 10 and his own lawsuit against the station over uncomplimentary stories it aired about him. The government turned down Channel 10's license application on Jan. 1.

Adelson's upset started last January, when an unfavorable story about his political sway and connections in Israel and the United States appeared on the independent news station's "This Week" show. The 20-minute investigative segment on him prompted the 78-year-old American billionaire -- whose free daily newspaper Israel Hayom is a staunch supporter of Netanyahu and right-wing politics there -- to demand the station issue a clarification and full apology to clear his name.

The "This Week" story dared suggest that Adelson, a billionaire 20 times over and current owner of the Venetian Resort Casino in Las Vegas and other large gambling halls in the Far East, obtained a Nevada casino gaming license back in the late 1980s thanks to political influence. (The writer of this article, a former daily news reporter in Las Vegas who once covered Adelson there, was interviewed for the story. I told the Channel 10 reporter that Adelson "was given extra consideration" by Nevada licensing authorities back then. I stand by that viewpoint.) The show also reported that a construction contractor alleged Adelson still owed him $400,000. Adelson insisted through a spokesman that his issue was that the program contained "defamatory allegations," and that he had no intentions to stifle press freedoms in his quest for an apology, despite the hardball way he went about it. Channel 10 defended the story's accuracy and said it passed muster with the station's lawyers.

After the January 2011 broadcast, Adelson contacted his American friend, Ronald Lauder, the Estee-Lauder cosmetics executive who owns 25 percent of Channel 10, to convince the station to air an apology. Lauder then apparently pressured Channel 10 executives, who feared that the station, already in poor financial shape and with a multimillion-dollar debt to the Israeli government headed by Adelson's friend Netanyahu, might have to cease operations if it didn't apologize. One unidentified staff member was quoted saying that the station was made to believe "the channel would shut down" without backtracking on the Adelson story.

Channel 10, which with Channel 2 is one of Israel's two commercial, non-government news stations, relented last September. The message it broadcast on "This Week" came off as if written by Adelson himself, or a representative. In fact, it was written by his attorney.

Here is how the Israeli publication, The Forward described it:

The apology claimed that after the broadcast, Channel 10 conducted checks, and "it transpired that the allegations were entirely false." Adelson received his gambling license, the apology continued, "after a meticulous [background] check that revealed a flawless business record." He "didn't benefit from any kind of preferential treatment and received the license according to the law and without resort to any kind of improper political connections or any other inappropriate means." The alleged debt "has no basis in reality."

The statement concluded: "In summary, there was no flaw whatsoever in Mr. Adelson's conduct. We are very sorry that we hadn't checked these allegations before we broadcast them and seek to apologize to Mr. Adelson and his family over the report."

The drama continued after the on-air apology. The station's journalists, who stood by the story, felt they had been forced to do it, and humiliated. "This Week" anchor Guy Zohar turned to the camera and read his own statement, stressing in part the importance of "stand[ing] up for professional and ethical issues," and announced his resignation. The program's editor and Channel 10's news director both resigned earlier in the day.

As reported by The Forward:

The only reason we did it was because of the power of the money," a Channel 10 employee told the Forward, on condition of anonymity. He said that executives at the financially troubled station feared its collapse if Adelson's demand was not met. An official spokesman for Channel 10 told the Forward: "Channel 10 refuses to comment on the story." Lauder did not respond to a request for comment.

The other Channel 10 employee who spoke to the Forward described the wording of the apology as "humiliating, to say the least." After watching the saga unfold from the inside, he believes Adelson has made himself untouchable in Israel. "Nothing about Sheldon Adelson that is not flattering will ever be published again in Israel -- I can promise you that," the employee said.