Four-term Massachusetts Senator Kerry scored a decisive upset victory against former Vermont Governor Howard Dean in the Iowa caucuses on Monday.

Sen. Kerry, who now leads the Democratic pack in polls leading up to Tuesday's New Hampshire primary, has made the Bermuda loophole in the US tax code a centrepiece of his resurgent election campaign.

In October, Sen. Kerry ? whose campaign treasurer is Bob Farmer, US Consul General in Bermuda between 1994 and 1999 ? unveiled his legislative plan to crack down on "unpatriotic corporate tax evaders" in front of the scandal-plagued conglomerate Tyco's headquarters in Exeter, New Hampshire.

Although most of its business affairs are run out of New York and New Hampshire, Tyco was incorporated in Bermuda in 1997. Former Tyco CEO Dennis Kozlowski and the firm's former chief financial officer Mark Swartz are currently on trial in Manhattan Supreme Court accused of looting the Bermuda-based conglomerate of $600 million through unauthorised pay and illicit stock sales.

Both deny any wrongdoing. If convicted, they face up to 30 years in prison.

Sen. Kerry is the only one of the remaining seven Democratic Presidential candidates to have specifically targeted Bermuda in his campaign and issued comprehensive economic policy position papers in which he pledges to revoke loopholes allowing for "corporate inversions" ? the relocation of already incorporated US firms ? to the island.

"We need the courage to stand up to unpatriotic companies that incorporate overseas to avoid taxes here at home," said Sen. Kerry during his campaign rally in front of the New Hampshire Tyco headquarters. "My friends, we need a President who understands what's happening in our country. This President lives out a creed of greed for he and his friends.

"I'm tired of seeing chief executives permitted to take their millions or billions to Bermuda and leave the average American here at home stuck with the tax bill. You know what I call that? Unpatriotic.

". . . When I finish with the tax code, when we finish with the tax code. there's not going to be one tax credit left for any company to encourage them to take jobs overseas and forget about their tax bills and their responsibility in America."

"Middle-class Americans are having a harder time in this economy. And I say it's long since time that powerful corporations paid their fair share.

"Under the Bush Administration, middle-class Americans have been forgotten ? their main street interests ignored, their mainstream values scorned by an Administration that puts favours for special interests and tax breaks for the wealthy first.

"If I am elected President, I will close the loopholes that let these corporate Benedict Arnolds turn their back on America in order to make a fast buck.

"And I will be introducing new laws to stop companies that mistreat their workers from getting government contracts. I say to these companies: When I am President you'll only get a government contract in this country if you are good to your workers.

"We need to send a clear message to the American people that we favour those who are doing the right thing over those who are doing wrong to their employees, their companies, and their country.

"The Bush Administration has looked the other way as US companies have skirted paying billions of dollars taxes. The Bush Administration has diluted new laws and appointed former industry representatives as so called 'watchdogs'."

On the campaign trail Sen. Kerry has repeatedly promised that if elected he will be a President who will provide middle-class payroll tax relief to get money in the pockets of American worker ? not one who will provide more "tax giveaways for those at the top to stimulate the economy in Bermuda".

Sen. Kerry said it should be illegal for corporations to use the Bermuda loophole and other "gimmicks" to avoid paying their share of Federal US taxes.

The Senator has repeatedly invoked Bermuda-based Tyco during his campaign appearances in Iowa and New Hampshire, where the company was once incorporated before decamping for Bermuda.

"If you can afford an army of lawyers and lobbyists you get special treatment; and everyone in New Hampshire now knows what that means," he said in remarks delivered in that state on December 27.

"Tyco used to be based right here in Exeter. Almost overnight, it was suddenly based in Bermuda. No one had to move, but in a flash $400 million a year in tax dollars disappeared into the Bermuda Triangle.

"And 11,000 jobs vanished at the same time. And it's wrong that the Bush Administration then rewarded this corporate Benedict Arnold with $331 million in federal contracts."

And just last week, Sen. Kerry savaged a recent decision by the Tyco board of directors not to relocate the conglomerate from Bermuda back to the US, a move favoured by its shareholders.

"Democratic presidential hopeful John Kerry on Wednesday criticised a recent decision by Tyco International directors to keep the troubled conglomerate in Bermuda," reported New Hampshire's .

"The board of directors promised to study relocating the company's headquarters to Delaware last March after 26 per cent of its shareholders voted in favour of the move. But it ultimately decided that shareholders would be served best by the company remaining in Bermuda, according to a company news release issued last Friday.

"Tyco executives are based in Portsmouth and New York, but the diversified manufacturing company has been incorporated in Bermuda since 1997.

"The company has become a frequent target of Presidential candidates promising to eliminate corporate loopholes that allow off-shore companies to reap huge tax advantages. 'They continue to avoid corporate responsibility'," said Kerry, citing a US Securities & Exchange Commission filing in which the company said moving to the United States 'could have substantial adverse tax consequences for certain company shareholders', namely, those whose shares are worth more than $50,000.

"Kerry told New Hampshire reporters: 'Isn't that too bad that somebody might have to pay little more burden at the upper end, while the average worker gets screwed by these particular moves'."

The Senator has also announced that a Kerry Administration would unveil new legislation that would prohibit any US Federal government contracts from being awarded to corporations that have moved offshore to jurisdictions like Bermuda simply to avoid taxes.

"Too many corporations are avoiding responsibility," reads a Kerry position paper on the Bermuda off-shore issue. "Corporations are avoiding paying billions of dollars in taxes.

"In a growing trend, major US corporations have been trading in their US citizenship to set up offshore tax havens in Bermuda and other jurisdictions. Last year, the General Accounting Office estimated annual revenue loss from various offshore tax entities at $40 billion.

"These corporations are still getting lucrative government contracts. These companies are often getting government contracts despite the fact that they are avoiding taxes.

"For example, Tyco, is now centrally located in Bermuda, avoids paying $400 million a year in US taxes through its shell headquarters off-shore, but was awarded $331 million in Federal contracts in 2002.

"Accenture (formerly a division of the now bankrupt accounting firm Arthur Andersen), which incorporated in Bermuda in 2001, received $449 million in Federal contracts in 2002.

"It is becoming all too common for corporations to profit by renouncing their US citizenship and setting up shell headquarters in foreign countries to avoid paying US taxes. These companies otherwise continue to operate in the US but shirk their responsibilities as corporate citizens.

"Just four companies alone estimate tax savings of $525 million a year merely by incorporating in Bermuda. It is estimated that corporate expatriates will drain our federal treasury of an estimated $4 billion over the next decade.

"Kerry has already supported legislation (in the Senate) to close the loopholes which corporations have unfairly exploited to avoid paying US taxes. Kerry believes that we should treat expatriating US companies as US corporations if former shareholders retain more than 80 percent ownership of the new nominally foreign corporation.

"What could $525 million from the four Bermuda companies buy? After-school programmes for tens of thousands of kids, for instance, and wounded soldiers would no longer have to pay for their own meals in hospitals."

Sen. Kerry's now ubiquitous anti-Bermuda stump speech stance is hitting a resonant note with Americans. This week a national poll conducted by the Associated Press / Ipsos Public Affairs shows a stagnant US economy is the top issue among voters with 33 per cent of respondents naming economic issues as their top concern. Just 21 per cent of those polled identified terrorism and only five percent selected the US war in Iraq.

In a profile of Sen. Kerry by Tom Oliphant that appeared on the eve of the Iowa vote, the reporter noted that his standard attacks on the Bermuda tax loophole invariably brought supporters to their feet at campaign rallies in the Mid-West state.

"Kerry spent the weekend drawing cheers that indicate real connections with supporters as he inveighed against a 'Republican recovery' that expands production and corporate profits while barely affecting jobs and wages, and he reminded audiences that he is the only candidate with a proposal to lower the cost of health insurance," said Oliphant.

"Voters love it when he rails against corporations that pay a few thousand dollars for the mailing addresses on Bermuda that allow the avoidance of US taxes, and they love it even more when he nails the 'evil lobbyists' who block progressive change in Washington."

Sen. Kerry's economic proposals ? including shutting down the Bermuda tax loophole ? are outlined in another position paper that chastises the Bush Administration for "pandering" to the wealthy and being "afraid" to go after US companies that incorporate on the island.

"George W. Bush has chosen tax cuts for the wealthy and special favours for the special interests over our economic future," reads the policy statement. "John Kerry's priority will be middle-class families who are working hard to cover the mortgage, pay the high cost of health care, child care and tuition, or just trying to get ahead.

"The first thing John Kerry will do is fight his heart out to bring back the three million jobs that have been lost under George W. Bush.

"He will fight to restore the jobs lost under Bush in the first 500 days of his administration . . . John Kerry has a plan to secure America's economic future and ensure that workers can achieve the American dream in our changing economy. John Kerry has the courage to roll back Bush's tax cuts for the wealthiest Americans so we can invest in education and healthcare.

"He isn't afraid to crack down on corporations that are hiding their money in Bermuda to avoid paying their fair share and will end special tax giveaways to companies that ship jobs abroad.

"He will restore investor confidence with strong enforcement by the Securities & Exchange Commission and he will stop corporations from keeping bank accounts in countries like Bermuda to avoid paying taxes."

A poll conducted by market research firm Zogby International this week showed George W. Bush losing 41 to 45 per cent in a match-up with a generic Democratic candidate if the Presidential election was held now.