Romney Persona Non Grata In Italy For Bain’s Deal Skirting Taxes

Romney Persona Non Grata In Italy For Bain’s Deal Skirting Taxes
(bloomberg.com)

Mitt Romney avoided Italy during his insult tour across Europe - for a good reason. Italians aren't likely to forget Romney or Bain Capital and the disastrous privatization deal of Seat Pagine Gialle that burned investors and cost their government a lot of money (and should serve as a cautionary tale against privatization of state assets).

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.

Bain’s purchase and quick resale of the yellow pages business is “an example of Italian capitalism, whereby those with little capital are able to cheat the system and enrich themselves,” Lannutti said. “It’s a mistake Italians hope won’t be repeated again now.”

Twelve years later, Romney’s ties to the deal could hurt his image in Italy, said Carlo Alberto Carnevale-Maffè, a professor of strategy at Bocconi University’s School of Management in Milan.

“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,” Carnevale-Maffè said. “Many will see Romney’s role in this as confirmation and it will be interpreted in a very cynical way.”

“The government got ripped off,” said Alessandro Fogliati, who led a Stet shareholder group that voted against the sale of Seat. “It was the beginning of the destruction of Italian industry.”

yeah I can't wait
to see the F'ing
this country's gonna take
if they put this puppet in office...

ahhh the choice between
a Giant Douche or a Turd Sandwich yum

Is Romney running for office in Italy??

Italy has bigger problems they need to focus on at the moment.

IMHO the $50 billion bailout of GM with taxpayer money is far worse. I'm still waiting for my dividend check!! Consider the Italian "rules" that allowed that Bain deal to take place and then examine the problems that Italy is currently facing.

Were Italian taxpayers involved?

We're used to deals like that in the US....

ETA
How about using TARP funds to buyout a bank. PNC buys National City Bank. National City was denied TARP Funds. More on that deal. Plenty of people got screwed and MIttens was not involved.en.wikipedia.org...

reply to post by Blackmarketeer


F&S for the OP!

It is becoming more apparent every day that the real reason we, (the free world) are facing such looming debt problems is not due to some imaginary epidemic of lazy, lower and middle class, people committed to free-loading off the system.

It would appear to me that the common thread in all this is that the wealthy elite, operating under the umbrella of protections offered through corporatizing, pay virtually nothing into a system that they continually scheme to suck the life out of. With the help of numerous free trade agreements etc..., they have managed to spread their destructive practices across the free world and beyond, so it should come as no surprise that most all of the industrialized nations are now fighting to fend off total economic collapse.

It's Robin Hood in reverse! They are robbing the poor, the sick, the elderly and even our youths to further enrich the wealthiest among us and it's absolutely sickening.

"Trickle Down," my ass! "Trickle On" is the real name of their game.

reply to post by jibeho

ETA
How about using TARP funds to buyout a bank. PNC buys National City Bank. National City was denied TARP Funds. More on that deal. Plenty of people got screwed and MIttens was not involved.

No argument about that being a shady deal, one of the worst to come down the pike in a long time. That also happened under the leadership of the previous administration and the bank bailouts. Kucinich was all over that one, protesting and calling attention to the shady deal on Capital Hill. Look how far that got him. He got gerrymandered out of existence by the rival party. "MIttens was not involved" you say, but it should be noted neither was Obama. That was a Bush/Paulson arrangement through and through.



reply to post by Flatfish

It would appear to me that the common thread in all this is that the wealthy elite, operating under the umbrella of protections offered through corporatizing, pay virtually nothing into a system that they continually scheme to suck the life out of. With the help of numerous free trade agreements etc..., they have managed to spread their destructive practices across the free world and beyond, so it should come as no surprise that most all of the industrialized nations are now fighting to fend off total economic collapse.

The system is under the influence of the robber barons and has been for the last 30 years. The rules that were in place to prevent this sort of thing have been weakened or trashed, now we have leveraged buyouts of state assets for a quick flip and profit. Who got burned in this case (the sale of Seat Pagine Gialle)? The small investor and the tax payers, while the robber barons made nearly a billion dollars off the sale, and it was all done through a cozy tax hideout in Luxembourg to avoid even having to pay tax on their obscene profits. That's what these vultures do, they extract their wealth from small investors and tax payers, and contribute nothing back.

reply to post by Blackmarketeer

Dear Blackmarketeer,

As a thread showing the dangers when government and business make large financial deals with each other, this is quite good.

As a thread attacking Romney it's, forgive me, a little weak. Romney was not declared persona non grata. That as you know is a technical diplomatic term signifying the government will not allow him to come into their country. That didn't happen.

Romney's tour focused on the countries he wanted to reassure would become strong allies again, after the current administration's serious and multiple insults to those countries. He didn't skip Italy because of opinion polls.

Twelve years ago would be 2000, when there is serious question whether Romney was involved in those deals.

Italy, going through a disastrous economic period, is experiencing an uproar over wealth and power. Romney while not involved, and Bain, which wasn't even a subject of the investigation and against which had no charges filed, are seen as symbols, scapegoats if you will.

Certainly the headline, and perhaps the article as well, are at best misleading, and at worst naked campaigning for Obama.

With respect,
Charles1952

reply to post by charles1952


The first definition of Persona Non Grata is the more apt;
1. a person who is not welcome: He has become persona non grata in our club since his angry outburst.

It's Italian politicians that are bringing up their offense at the controversial billion-dollar tax-free deal Bain Capital got. While the second definition of "persona non grata" as per your post may not apply, the first certainly would seem to. It's clear that Romney avoided Italy for a reason, because it would have been brought up that he was the head of Bain Capital and a major part of the telephone-directory company deal that still has a lot of people upset over there, and it would have resulted in a lot of unfavorable press.

After the company’s value collapsed, the deal sparked widespread outrage and various probes in Italy, which has been slammed with economic woes in recent years.

Of course there's nothing they can do about it, technically no laws were broken. It's a question of ethics and just how warped government's and tax laws have become to cater to the wealthy at the detriment of every one else.

(New charge that Romney’s Bain Capital avoided Italian taxes emerges)