Thanks to friend of blog Jerry: 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 - Bloomberg

LP - It turns out Romney is an equally opportunity draft dodger, Who is able to use the clunky apparatus of the nation states to fly under the radar.



Mitt Romney skipped Italy on his swing through Europe. That was probably prudent.

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Mitt Romney

Al Bello/Getty Images

Mitt Romney, seen here attending the London 2012 Olympic Games, skipped Italy on his trip to Europe.

Mitt Romney, seen here attending the London 2012 Olympic Games, skipped Italy on his trip to Europe. Photographer: Al Bello/Getty Images

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.”

Personally Involved

While few ordinary Italians realize the link between Romney and the investor group, the deal 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 economy is in its fourth recession since 2001 and unemployment is at a 13-year high.

Romney himself probably earned more than $50 million, and possibly as much as $60 million from the Italian directory sale of Seat Pagine Gialle SpA, according to a person familiar with the matter. The deal turned into one of the biggest windfalls of his tenure.

“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,”said Michele Davis, a spokeswoman for Romney’s presidential campaign. “Mitt Romney is running for President to put that experience to work.”

full story: http://www.bloomberg.com/news/2012-08-06/romney-persona-non-grata-in-italy-for-bain-s-deal-skirting-taxes.html