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Emails on Alves' Employment and Payment

Editor's Note: The following are excerpts of emails examined by reporters. To maintain privacy, we replaced email addresses with names.

From: Jacobs, Steve
Sent: Wednesday, March 10, 2010 9:26 AM
To: Melo, Luis; Gonzalez, Al
Subject: FW: Option 3

The latest ... including his cc to Betty.

I will let you know if this comes up in my conversation with Sheldon. Luis, engage who you need on a project basis and let’s talk about a replacement for outside counsel.

The transition will not be easy... and has a high probability of becoming messy… but it is the right thing to do for the business.


* * *

From: Jacobs, Steve
Sent: Thu 3/11/2010 1:25 AM
To: Leonel Alberto Alves
Cc: Yurcich, Betty
Subject: RE: Option 3


I will return the week of March 15 and we should discuss. I fully understand your perspective and concerns regarding opportunity costs and the difficulty of staffing up for project based work.

Given we are not able to conclude an arrangement at this point in time, I have no choice but to engage other Macau firms in the interim to address outstanding items that you were working on when you terminated the contract. This includes but is not limited to the four seasons apartments, financing ...

I look forward to our next meeting and hope we can find common ground.


* * *

From: Jacobs, Steve
Sent: Thursday, March 11, 2010 5:07 PM
To: Gonzalez, Al
Subject: RE:


Leonel's bill was paid in two part. The first part was paid only for the hours billed at normal rates. This lead to the "discussions" with the chairman regarding replacing Luis with LA's firm (which LA offered at "no costs"). I infomred LA that we could not pay the remaining balances as he ahd not provided us with the required billing infomration and we were worried that there could be FCPA issues related to this. Approximately three weeks later we received the "supporting documentation" and I was instructed by SGA and MAL to pay and close out the matter. I am sorry that this was not communicated to you but I am glad that FCPA outside counsel did not highlight any substantial issue with the payment.

What we have before us, is Leonel reaching out to SGA seeking to become full time counsel. He has intimated he will drop his fees and that he is uniquely situated both as counsel and as a legeslator to "help" us in Macau. As you knnow from my last corresponsance, SCL is not moving forward with LA. I suspect however, the issue is far from dead.

On another note, anything I need to be aware of with regards to your meeting on Wednesday. Luis forwarded me your email stating that you would not be meeting with

* * *

From: Al Gonzalez
Sent: Thursday, March 11, 2010 8:30 PM
To: Jacobs, Steve
Subject: RE:

Steve, thanks for your message.

Unfortunately, FCPA counsel did highlight a problem with paying LA anything more for the IPO work than his normal "1x" fees plus a commercially reasonable premium. They did not believe it would be appropriate to pay a "3x". That was what our call last week was about.

* * *

From: Gonzalez, Al
Sent: Fri 3/12/2010 8:43 AM
To: Jacobs, Steve
Subject: RE:

Steve, I wasn't aware that payment of the disputed LA invoices was made, I thought you may have said as much at the end of our call last week on this issue but wasn't sure I understood you correctly. Consequently, I emailed Luis after the call and asked him to follow up and let me know what's been paid. I haven't heard back from him yet. In the interim, I received the message below which seemingly states that full payment was made to LA.

You know from various conversations we've had an emails we’ve exchanged that I did not believe it appropriate to pay LA three times his normal rates for the SCL IPO related work. Which I can appreciate that you received instructions to make the payment, I wish you would have advised me so I could have intervened. We need to improve our communications to minimize the likelihood that something like this could happen again.

I don't see there's much more to do on LA's IPO bills and, accordingly, we will close our file related to this matter and cease any further work.

Please let me know if I've misunderstood your message or [if you] believe the above version of events is inaccurate.

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