Facebook co-founder renounces U.S. citizenship, draws heat

(CBS News) When Facebook begins selling its stock, several people who own part of the company will become billionaires.

One of them is getting a lot of flack, because he's giving up his U.S. citizenship right before Facebook goes public. That will save Eduardo Saverin a fortune in taxes.

You might recall Saverin as the guy we all felt sorry for in the movie about Facebook called "The Social Network." As the film tells it, Saverin was Facebook's fall guy, losing millions because of the cold-hearted corporate machinations of mastermind Mark Zuckerberg.

But it's a good bet few are feeling sorry for the 30-year old Saverin today.

The Brazilian-born entrepreneur, who many say owes his good fortune to his very American Harvard education and the California-fueled Internet boom, has renounced his U.S. citizenship, allegedly to avoid paying millions to Uncle Sam when Facebook goes public.

Facebook co-founder Saverin renounces U.S. citizenship ahead of IPO

"The openness of our economy," says Edward Kleinbard, a professor at the USC Gould School of Law, "the willingness to encourage and incubate start-up businesses, made Facebook worth what it is today and made him the extraordinarily wealthy man he is today."

The news sparked outrage across social networks. Billionaire businessman Mark Cuban tweeted, "This pisses me off." Journalist James Fallows tweets, "New candidate for most unlikable Facebook founder."

Saverin is being hailed in some quarters for drawing attention to high taxes. He plans to continue living the high life, in Singapore, where there are no capital gains taxes.

"For Eduardo Saverin to expatriate struck me as perfectly lawful and, at the same time, profoundly ungrateful," Kleinbard says.

Despite what critics call his unpatriotic expatriation, Saverin's actions will likely have little effect on Facebook's future.

Zuckerberg has been making the rounds of investment houses, and his company's upcoming initial public offering is expected to be a blockbuster.

Click on the video in the player above to see Bill Whitaker's report, as well as an interview by "CBS This Morning" co-hosts Erica Hill and Charlie Rose of tech journalist David Kirkpatrick, who says Saverin has been more opportunist than tech pioneer.

  • Bill Whitaker

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