Audit Notes: The FT’s prospects, another victimized billionaire, Bain & Co.

Michael Wolff writes in The Guardian about the Financial Times’s prospects now that Pearson CEO Marjorie Scardino, a booster of the paper, is on the way out.

He reports that Bloomberg and Thomson Reuters have gone “hat in hand” to Pearson expressing their interest in buying the FT, and he says Rupert Murdoch “has obsessed” over what might happen to The Journal if Bloomberg gets hold of the FT or NYT.

But then he tosses this off (emphasis mine):

Why do rich men love the FT? Perhaps because its salmon color so distinctly identifies men of common interests and aspirations; or because its Britishness suggests a further class consciousness and, too, because among all business publications, it really is the liveliest read. At any rate, they like it so much that even though it is a newspaper - as doomed as any other - there is an intense competition among the super rich to own it. (What’s more, the FT Group comes with a 50% interest in the Economist, the next most favorite publication of would-be mandarins and the wealthy.)

Sorry, but no. The FT’s circulation has been increasing, not falling. More than half of the FT’s 600,000 subscriptions are now digital and they charge a lot of money for each of them. The FT Group as a whole now brings in as much money from its digital operations as it does from print. It also has a super-rich audience, the kind that brings big ad dollars to 0.1 percent porn like “How to Spend It.”

If any newspaper is going to make it, it’s the FT.

— Gawker’s Hamilton Nolan reports on the CEO featured in that “Queen of Versailles” documentary. David Siegel recently sent out this (partially plagiarized) email to his employees all but telling them to vote for Mitt Romney:

As most of you know our company, Westgate Resorts, has continued to succeed in spite of a very dismal economy. There is no question that the economy has changed for the worse and we have not seen any improvement over the past four years. In spite of all of the challenges we have faced, the good news is this: The economy doesn’t currently pose a threat to your job. What does threaten your job however, is another 4 years of the same Presidential administration. Of course, as your employer, I can’t tell you whom to vote for, and I certainly wouldn’t interfere with your right to vote for whomever you choose. In fact, I encourage you to vote for whomever you think will serve your interests the best…

Yes, business ownership has its benefits, but the price I’ve paid is steep and not without wounds. Unfortunately, the costs of running a business have gotten out of control, and let me tell you why: We are being taxed to death and the government thinks we don’t pay enough. We pay state taxes, federal taxes, property taxes, sales and use taxes, payroll taxes, workers compensation taxes and unemployment taxes. I even have to hire an entire department to manage all these taxes. The question I have is this: Who is really stimulating the economy? Is it the Government that wants to take money from those who have earned it and give it to those who have not, or is it people like me who built a company out of his garage and directly employs over 7000 people and hosts over 3 million people per year with a great vacation?

Obviously, our present government believes that taking my money is the right economic stimulus for this country. The fact is, if I deducted 50% of your paycheck you’d quit and you wouldn’t work here. I mean, why should you? Who wants to get rewarded only 50% of their hard work? Well, that’s what happens to me.

The poor guy is currently building a $100 million, 90,000 square foot house after a pause for lack of liquidity. And there’s no way Siegel is paying 50 percent taxes, by the way.

If you haven’t yet, make sure to read Chrystia Freeland’s excellent New Yorker article on why billionaires feel victimized by Obama.

— The Huffington Post reports that Bain & Company, while Mitt Romney was there, made lots of money helping bring Big Tobacco to post-Soviet Russia. As HuffPost notes, lots has been written about Romney’s tenure at Bain Capital, but little has been written about his time at Bain & Company.

Bain’s Russian business wasn’t about family-friendly products. Those deals were about cigarettes. And that work sent Bain into the shadows of the post-Soviet economy — including helping to orchestrate anonymous, convoluted cash transactions to keep major deals hidden from regulators and competitors. It was part of a free-for-all that involved wholesale looting of major industries, as Western technocrats helped facilitate the transfer of Russia’s wealth into the hands of a few oligarchs. That set in motion a populist backlash that helped sweep Vladimir Putin into power, giving the Kremlin dominance over a country Romney has lately called our “number one geopolitical enemy.”

Bain was in the middle of all of this, putting to work the same skills it had sharpened in the U.S. — using taxpayer money to help it gain footholds in Russia. In March 1993, the American government gave Bain & Co. a $3.9 million contract to advise Boris Yeltsin’s administration on the privatization of the Russian economy, according records detailing the arrangement uncovered by The Huffington Post. Romney’s consultants helped foreign firms and aspiring oligarchs decide how to corral Russia’s riches — including writing an official manual that outlined how best to navigate the process. At the same time, Bain leveraged its contacts with senior Russian officials to arrange sweetheart deals for its tobacco clients.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.