Romney's Italian JobST
This might be the first case in history where a man who may become a sitting President of the United States has already declared war on a country (an ally, no less) as a private citizen. At least that's how many Italians see it.
That’s because, under Romney as chief executive officer, made about $1 billion in a 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 paid for the directory business.
What happened was this: Bain (under Romney) bought a 16% stake in the Italian yellow pages, making them the second-largest shareholder behind the state-run Italian phone company itself. Two years later they sold the stake for 25 times what they paid for it when the phone company (again, state-run) bought out all the partners. It's estimated that Romney personally profited $50-60 million on the deal.
If that weren't enough, then Bain funneled the profits through Luxembourg to beat the taxes. Certainly not illegal, but definitely kinda shady, and you can see where the Italian people might feel like they got hosed. Especially considering the entire phone company is now worth less that what Bain paid for just the yellow pages in the late 90's.
“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,” said Giovanni Pons, a journalist for la Repubblica and co-author of “L’Affare Telecom” (2002), which recounts details of the Bain deal.
Here's a video that goes into more detail:
So, if Romney gets elected, can we expect some pushback from Italy? Or are they so used to getting hosed by wealthy industrialists (ahem, Berlusconi) that they don't even notice it anymore?