Mitt Romney’s European excursion didn’t go especially well, but it could have been worse – he could have gone to Italy.
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.
Romney had a direct role in the deal – he can’t point to this as a Bain activity that occurred after his “retroactive” resignation – and “probably earned more than $50 million, and possibly as much as $60 million.”
Italy was less fortunate – Bernardo Bortolotti, an economics professor at Turin University who advised the Italian Treasury on asset sales from 2002 through 2005, told Bloomberg News the sale is considered “a dark chapter in the country’s privatization history, one that has hurt Italians deeply.”
Josh Marshall added, “On the tax avoidance and destructive business practices front this seems pretty germane. Especially on the use of offshore accounts.”
In the meantime, it looks like we can add Italy to the list of U.S. allies that would not welcome Romney with open arms.