Sheldon Adelson’s Top Editor Reveals Why He Quit

Mike Hengel accepted a buyout offer and resigned from the Las Vegas Review-Journal after spearheading the paper’s determined reporting on its new billionaire owner.

With the $140 million purchase of Nevada’s biggest and most influential newspaper by the family of billionaire casino magnate Sheldon Adelson—a transaction that the litigation-prone Republican mega-donor had tried to keep secret—the collateral damage has begun.

“I don’t think I did anything that most other editors wouldn’t have done in the same circumstances,” Mike Hengel told The Daily Beast on Wednesday.

Hengel was speaking the day after he accepted a buyout offer—hours after it was presented to him on Tuesday—and resigned as the top editor of the Las Vegas Review-Journal, which had been working overtime to unmask the mystery buyer when the change in ownership first came to light less than two weeks ago.

“I don’t fully understand it all myself,” Hengel said about the series of events that led to his abrupt departure after five years at the helm of a newspaper that Adelson had often complained about and occasionally sued for its investigative coverage of his global gambling empire, the Las Vegas Sands Corporation. “I probably ought to reserve comment until I’ve had time to reflect on it,” Hengel added.

“It’s been an interesting few days,” he said. “We’ve been covering one of the best stories of my 40-year career right now, so I’m glad that I feel like the team pursued it in a way that they pursued it. And I hope they continue to do so in my absence.”

That, many fear, is unlikely—given what they call the R-J upper-management’s heavy-handed and inappropriate attempts to control the story about the purchase, such as publisher Jason Taylor’s decision last week to remove an incendiary quote that put the new owners in a bad light.

The original version of an R-J article last Thursday reported an exchange between Hengel and Michael Schroeder, a manager for News + Media Capital Group LLC, a privately held Delaware company which was fronting for the then-unknown buyers.

During a meeting on Thursday with Hengel and other editors, as speculation began to focus on Adelson, Schroeder refused to disclose the company’s investors.

“They want you to focus on your jobs… don’t worry about who they are,” Schroeder said—the quote that publisher Taylor ordered deleted after it appeared in the paper’s early editions.

R-J columnist John L. Smith, who has been sued by Adelson, said that this incident alone casts doubt on the new owners’ respect for the importance of independent journalism.

“If they expected the R-J staff to be a bunch of whipped dogs, what happened was those dogs bit ’em,” said Smith, who wrote a weekend column arguing that Adelson has no business owning any newspaper, let alone this one.

“That’s a good question,” said Smith, who has written about Adelson for The Daily Beast, when asked what will happen to him. “I don’t know, but it’s hard to imagine this was designed to increase my comfort level.”

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Smith described the newsroom reaction to Hengel’s resignation as “shock and disappointment,” but praised the top editor for “going out with his boots on.”

Hengel said that in the past two weeks “we pursued this with all the vigor you would have with any other story. We didn’t back off of this just because it involved us.”

He added: “Transparency is important. There is no problem with anybody owning a newspaper, Sheldon Adelson or anybody else, but we’ve got to be transparent about whatever conflicts exist. And that is not going to be easy, going forward.”

Hengel reportedly had ordered up a thorough accounting of the new owner’s potential conflicts of interest, but insisted that didn’t put him in an uncomfortable position.

“I was not uncomfortable at all,” he said. “We were pursuing the story and a lot different subjects, just as we always have.”

It is likely that other newsroom staffers will follow the 63-year-old Hengel out the door.

James DeHaven, whose byline was prominent on the paper’s aggressive stories about the R-J’s sale, has—as he told CNN’s Reliable Sources last Sunday—already accepted a new job in Montana and was thus protected from any possible retribution.

An Adelson family statement released Wednesday, and apparently meant to reassure skeptical R-J journalists of their honorable intentions, noted that Hengel “accepted a voluntary buyout offer from the R-J’s prior owners… [and] other R-J employees also accepted the voluntary buyout offer from the previous owners”—namely GateHouse Media, which had bought the paper only nine months ago for $38 million less than the Adelson family paid.

The new owners’ statement, which struck some as having been written by a public relations expert, was greeted dubiously by R-J journalists who had regularly been stonewalled by Adelson’s secretive minions—not only in their attempts to report on his wide-ranging business enterprises from Nevada to Singapore to Macau, but also on his most recent acquisition.

“[W]e pledge to publish a newspaper that is fair, unbiased and accurate,” the new owners stated, while promising to invest in new features and other “components” to serve readers.

“We decided to buy the Review-Journal to help create a better newspaper—a forward-thinking newspaper that is worthy of our Las Vegas community. This journalism will be supported by new investments in services such as enhanced fact checking and a Reader Advocate or Ombudsperson to respond to reader concerns.”

While others suggested that 82-year-old Adelson, with an estimated $28 billion net worth, paid the substantial premium in the purchase in order to neutralize a newspaper that has been a painful thorn in his side, Hengel took the high road during a phone interview Wednesday.

Despite the owner statement’s between-the-lines implication that the paper under his leadership had been unworthy and fact-challenged—certainty Adelson’s attitude over the years—Hengel said he’s “hopeful,” if not entirely sanguine, about the R-J’s future.

“I remain hopeful,” Hengel said. The Adelson family in Wednesday’s statement “essentially pledged to be responsible, honorable stewards of the Review-Journal, and I’m going to take them at their word on that.”

Concerning Adelson, who spent an estimated $100 million on behalf of Republicans in the 2012 election cycle and typically bankrolls presidential candidates who share his staunch support of Israel, Hengel said: “He had the money to buy it. He wanted it. I don’t know exactly what he wants to do with it. But why wouldn’t he want it? If you could own the newspaper in your town, why wouldn’t you be thinking about buying it?

“Let’s see where he takes this. It could be a great newspaper. I wish him the best of luck.”