PREMIER Alex Scott said yesterday that US Presidential candidate John Kerry's campaign attacks on Bermuda might not become reality should he take office.

And new Finance Minister Paula Cox joined the Premier in vowing to strengthen their lobbying efforts in Washington to minimise the threat posed to the island's economy.

Asked if he was concerned by Sen. Kerry's remarks about the island, Premier Scott said: "Remember now, he's campaigning. I think he's raising the issue of the off-shore jurisdictions and the impact they have on the tax position of the US.

"We have satisfied the criteria that both the European financial sector and the US about the legitimacy of Bermuda operations.

"Yes, we are not surprised it has turned up in the US campaigning and they are saying, we are going to bring these tax dollars home.

"But see what happens when these individuals get into office, then they turn to their advisers and they say, 'Look, Bermuda's not a problem, they regulate their affairs as well, if not better than, we do'. So I think we'll always be able to satisfy the criteria that good governance requires."

And the Premier said he would himself travel to Washington to push Bermuda's case, if necessary.

"It just means that we have to make sure that we and the other decision-makers in Washington know as much as possible about Bermuda. And to have the Finance Minister and myself to get closer ties with Washington.

"It's suggested by Sir John Swan that we should do so, it's suggested by the Opposition that we should do so, and I feel we should do so. It makes good sense to make sure our trading partners know what we do and how we do it.

"It's something that we do continually through our consultants both here and there but I would like to sit down with my new Finance Minister and see how she feels about this before committing an initiative that really comes under the financial sector."

Moments after taking over from her late father as Finance Minister, Ms Cox expressed similar sentiments.

"I don't particularise it to the Kerry manoeuvre, but I do think that in the issue of economic diplomacy we have to present a united front with those who are representing our interests abroad," Ms Cox said.

"The late Minister allocated funds in the Budget for that. And we will be continuing that. And while I don't envisage that I will be travelling an insuperable amount, at the same time, where needs must.

"I think we have a very good set of strategic partnerships within the local community and the international community here in terms of the business sectors.

"And they have in the past been very helpful in making available some of their legal resources and others as we have sought to represent Bermuda's interests aggressively abroad. And I don't envisage there's going to be any diminution in that, especially when there is a target focused on Bermuda."

When it came to Americans making their own laws, there was only a limited amount Bermuda could do, she added.

"The US legislators have a remit on US legislation and that is not something that we can be naive about and expect to exert tremendous influence," Ms Cox said.

"What I think we've got to rely on are the special relationships we have with people in the US, the international business sector and also making use of lobbyists.

"While I don't think it would be prudent of me to lay out the Cox prescription on this five minutes after becoming Finance Minister, I can tell you there will be a continued and directed effort to defend Bermuda's economic interests."

Dr. Grant Gibbons, Opposition Leader and Shadow Finance Minister, responded to Senator Kerry's wide-ranging attack on Bermuda in a calm and businesslike manner.

"It is pretty clear that the Democrats, Senator Kerry included, in this very political year, are looking for something to blame on President Bush and the Republicans. The whole business of corporate excess is one of those issues, and we have to recognise that this is pure politics,and that Senator Kerry is looking for an attractive villain to attack."

"Part of the problem (for Bermuda) is that it is the US tax law, and its taxation of companies on world-wide earnings, which has produced this incentive for companies like Tyco to domicile in Bermuda. Another point which has to be made here, when we are seeing lawsuits and issues of corruption being alleged, is that a lot of these companies are U.S stock exchange-listed companies, SEC-regulated companies as well, so to a large degree this is not so much a Bermuda problem, this is a U.S. problem in terms of their regulations, and what their tax code motivates companies to do.

"The challenge, of course, for us, is that Bermuda is being made the proverbial poster child for corporate excess, which is not only simplistic, but also extremely unfair. I think that what we need to be doing here, particularly those of us making decisions that will affect Bermuda in Washington, is provide a counter-balance, a good lobbying effort so that US legislators and others understand, in a rational way, that Bermuda has made enormous contributions to the United States in terms of the services we provide here through many of our reinsurers, in terms of providing risk cover for both property casualty and terrorism, which was very difficult to get in the United States after 9/11"

"There needs to be not only a lobbying effort, which needs to be comprehensive and consistent to maintain good relations with those who are making decisions on the banking and finance committees, but we have to recognise that this is an election year.

"The last time we saw a lot of discussion about corporate inversions was in the lead-up to some of the races last November, when a number of Democratic politicians seeking re-election felt they could get mileage out of blaming an off-shore jurisdiction and blaming companies for being un-American and for corporate greed."

"The fault lies in the US tax system, in the fact they tax on world-wide earnings, which is not something that a lot of other jurisdictions do. A lot of these larger corporations are competing on a world-wide basis, and a lot of the corporations they are competing against in Europe or other countries don't have to bear taxation on world-wide earnings.

"These US companies are being driven, by virtue of having to be competitive, to seek a different tax structure. They have made the case that, by virtue of saving taxes, they are able to be competitive and maintain jobs in the United States, where a lot of the manufacturing and service is actually done for Tyco and other companies. I don't particularly want to defend Tyco, but this is an opportunistic attack by Senator Kerry.

"However, we have lost a lot of our strong relationships with Washington which were built up over a number of years, and given the degree to which Bermuda does business with the United States both in the international sector and tourism, it is exceedingly important that those who are making decisions that might affect Bermuda are clearly knowledgeable, and that comes down to effective lobbying on our part.

"The Bermuda Government has really dropped the ball in this area, and I think it is something that is very important for our economic success."

Deborah Middleton, CEO of the Bermuda International Business Association, said: "For Senator Kerry to attack US corporations that have moved to Bermuda may be good politics and provide catchy sound-bites on the campaign trail.

"However, the issues he is highlighting relate to the US tax code and global competitiveness. Those are issues for the voters in the US to consider and it is not appropriate for us to comment on them.

"What I will say is this. We make no apologies for our tax system. It was designed for Bermudians and works for our island. We have a sound regulatory environment, political and economic stability and an incredibly talented and sophisticated workforce.

"We are proud of the international business environment here. All of us can walk around the world with our heads held high, carrying this message. It is what has made Bermuda successful to this point and what will make us successful in the future."

David Ezekiel, chairman of the Association of Bermuda International Companies, said facts were conspicuous by their absence from Senator Kerry's withering critique of the island.

"It is difficult to respond to this sort of rhetoric, which is usually short on facts and very long on politics," he said. "There is undoubtedly some connection between the attacks on Bermuda and the separate Kerry attacks on (rival) Governor Howard Dean and his role in captive industry in Vermont ? and once again we appear to be involved simply due to someone else's political agenda.

"This is a rerun of the noise over the corporate inversions issue early last year and all we can do is stress that we have had our own tax structure in place for over 100 years and have never made any attempt to solicit this business.

"These are, however, law-abiding companies making moves which they believe will allow them to compete with foreign competition who, unlike the US, do not tax domestic companies on foreign source income. The US is one of only three major countries that have this tax structure which is clearly having an adverse affect on major companies in the US with substantial foreign-sourced income."