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Bloomberg: “Romney Persona Non Grata in Italy for Bain’s Deal Skirting Taxes”
Bloomberg: “Romney Persona Non Grata in Italy for Bain’s Deal Skirting Taxes”
by bobswern
I just couldn't resist doing a post on this story which is running as a lead over at Bloomberg this morning...let's call it: "Mitt's Italian Job."
This story’s rather lengthy but well worth the read this morning. I’m not going to provide a rewrite of it, but here are just a few more of the many key points in it…
-- Most in Italy are unaware of the connection between Romney and the investor group as far as this business deal was/is concerned, but it “symbolizes Italy’s economic woes and government futility as the nation struggles to convince investors that it can repay Europe’s second-largest debt without a bailout.”
-- The Italian directory sale of Seat Pagine Gialle SpA “probably earned (him, alone) more than $50 million, and possibly as much as $60 million,” and it “turned into one of the biggest windfalls of his tenure” there. He was personally involved in the deal, which is interesting, because those profits were made in 2000, which runs well into the period during which “Romney has contended that he gave up management control of Bain in February 1999 to run the (Olympic) games.”
-- Italian Senator Elio Lannutti is extensively quoted in the article, citing Bain’s flipping of the yellow pages business as “an example of Italian capitalism, whereby those with little capital are able to cheat the system and enrich themselves…It’s a mistake Italians hope won’t be repeated again now.”
-- Carlo Alberto Carnevale-Maffè, a professor of strategy at Bocconi University’s School of Management in Milan, comments in the Bloomberg piece about how this could adversely impact upon Romney’s image there: “There is always this underlying sentiment in Italian public opinion that when you are in politics you don’t serve the public good, you serve your personal interest…Many will see Romney’s role in this as confirmation and it will be interpreted in a very cynical way.”
-- Giovanni Pons, a journalist for la Repubblica and co-author of “L’Affare Telecom” (2002), which recounts details of the Bain deal, tells us in the article: “Mitt Romney and Bain played the role of successful financial speculators at the peril of the Italian government and the small stock-market investors who were burned by the sharp decline in Seat (PG) shares.”
And, next-to-last-but-not-least, what happened to all of those Bain profits in Italy?
Naturally, Mitt’s campaign is clueless, as is self-evident from the quote from Romney campaign spokeswoman Michele Davis in this morning’s Bloomberg article: “With this investment, Mitt Romney and Bain Capital, with its consortium partners, partnered with a new management team to transform this company, and grow it into a tremendous success…Mitt Romney is running for President to put that experience to work.”
Come to think of it, per Ms. Davis, while Romney’s “running for President” this morning, I’m sure a few of his campaign workers will be running to their national campaign offices in Boston’s predominantly Italian North End, too.
http://www.dailykos.com/story/2012/08/06/1117173/-Mitt-s-Italian-Job-Romney-Persona-Non-Grata-in-Italy-for-Bain-s-Deal-Skirting-Taxes
by bobswern
I just couldn't resist doing a post on this story which is running as a lead over at Bloomberg this morning...let's call it: "Mitt's Italian Job."
Romney Persona Non Grata in Italy for Bain’s Deal Skirting Taxes
By Jesse Drucker, Elisa Martinuzzi and Lorenzo Totaro
Bloomberg
Aug 6, 2012 12:01 AM ET
Mitt Romney skipped Italy on his swing through Europe. That was probably prudent.
That’s because Bain Capital, under Romney as chief executive officer, made about $1 billion in a leveraged buyout 12 years ago that remains controversial in Italy to this day. Bain was part of a group that bought a telephone-directory company from the Italian government and then sold it about two years later, at the peak of the technology bubble, for about 25 times what it paid.
Bain funneled profits through subsidiaries in Luxembourg, a common corporate strategy for avoiding income taxes in other European countries, according to documents reviewed by Bloomberg News. The buyer, Italy’s biggest telephone company, now has a total market value less than what it paid Bain and other investors for the directory business.
In Italy, the deals have spurred at least three books, separate legal and regulatory probes and newspaper columns alleging investors made a fortune at the expense of Italian taxpayers. Boston-based Bain wasn’t a subject of the inquiries, which didn’t result in any charges.
The sale of the government’s directory business is “a dark chapter in the country’s privatization history, one that has hurt Italians deeply,” said Bernardo Bortolotti, an economics professor at Turin University who advised the Italian Treasury on asset sales from 2002 through 2005. “It was a mistake from the start, damaged by a lack of transparency and the use of offshore funds…”
By Jesse Drucker, Elisa Martinuzzi and Lorenzo Totaro
Bloomberg
Aug 6, 2012 12:01 AM ET
Mitt Romney skipped Italy on his swing through Europe. That was probably prudent.
That’s because Bain Capital, under Romney as chief executive officer, made about $1 billion in a leveraged buyout 12 years ago that remains controversial in Italy to this day. Bain was part of a group that bought a telephone-directory company from the Italian government and then sold it about two years later, at the peak of the technology bubble, for about 25 times what it paid.
Bain funneled profits through subsidiaries in Luxembourg, a common corporate strategy for avoiding income taxes in other European countries, according to documents reviewed by Bloomberg News. The buyer, Italy’s biggest telephone company, now has a total market value less than what it paid Bain and other investors for the directory business.
In Italy, the deals have spurred at least three books, separate legal and regulatory probes and newspaper columns alleging investors made a fortune at the expense of Italian taxpayers. Boston-based Bain wasn’t a subject of the inquiries, which didn’t result in any charges.
The sale of the government’s directory business is “a dark chapter in the country’s privatization history, one that has hurt Italians deeply,” said Bernardo Bortolotti, an economics professor at Turin University who advised the Italian Treasury on asset sales from 2002 through 2005. “It was a mistake from the start, damaged by a lack of transparency and the use of offshore funds…”
This story’s rather lengthy but well worth the read this morning. I’m not going to provide a rewrite of it, but here are just a few more of the many key points in it…
-- Most in Italy are unaware of the connection between Romney and the investor group as far as this business deal was/is concerned, but it “symbolizes Italy’s economic woes and government futility as the nation struggles to convince investors that it can repay Europe’s second-largest debt without a bailout.”
-- The Italian directory sale of Seat Pagine Gialle SpA “probably earned (him, alone) more than $50 million, and possibly as much as $60 million,” and it “turned into one of the biggest windfalls of his tenure” there. He was personally involved in the deal, which is interesting, because those profits were made in 2000, which runs well into the period during which “Romney has contended that he gave up management control of Bain in February 1999 to run the (Olympic) games.”
-- Italian Senator Elio Lannutti is extensively quoted in the article, citing Bain’s flipping of the yellow pages business as “an example of Italian capitalism, whereby those with little capital are able to cheat the system and enrich themselves…It’s a mistake Italians hope won’t be repeated again now.”
-- Carlo Alberto Carnevale-Maffè, a professor of strategy at Bocconi University’s School of Management in Milan, comments in the Bloomberg piece about how this could adversely impact upon Romney’s image there: “There is always this underlying sentiment in Italian public opinion that when you are in politics you don’t serve the public good, you serve your personal interest…Many will see Romney’s role in this as confirmation and it will be interpreted in a very cynical way.”
-- Giovanni Pons, a journalist for la Repubblica and co-author of “L’Affare Telecom” (2002), which recounts details of the Bain deal, tells us in the article: “Mitt Romney and Bain played the role of successful financial speculators at the peril of the Italian government and the small stock-market investors who were burned by the sharp decline in Seat (PG) shares.”
And, next-to-last-but-not-least, what happened to all of those Bain profits in Italy?
Bain moved profits through a series of subsidiaries in Luxembourg, a country that makes it easy to get cash out without paying taxes, according to corporate filings. Corporate records in Luxembourg show Bain carried out technical steps for a tax- free repatriation of profits to the U.S.
Naturally, Mitt’s campaign is clueless, as is self-evident from the quote from Romney campaign spokeswoman Michele Davis in this morning’s Bloomberg article: “With this investment, Mitt Romney and Bain Capital, with its consortium partners, partnered with a new management team to transform this company, and grow it into a tremendous success…Mitt Romney is running for President to put that experience to work.”
Come to think of it, per Ms. Davis, while Romney’s “running for President” this morning, I’m sure a few of his campaign workers will be running to their national campaign offices in Boston’s predominantly Italian North End, too.
http://www.dailykos.com/story/2012/08/06/1117173/-Mitt-s-Italian-Job-Romney-Persona-Non-Grata-in-Italy-for-Bain-s-Deal-Skirting-Taxes
"You people," he's running for President, for Pete's sake.
[font color="black" size="12" face="arial"]What is Mitt hiding?[/font]
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10 replies
= new reply since forum marked as read
= new reply since forum marked as read
I just won't answer the door.
What a fuck.
Let's see, Italy, well, what will his people say about this?
K/R
Italians are famous for letting things go. Turning the other cheek. Letting bygones be bygones. 
