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Neal confident of success for patriot bill

Richard E. Neal was in a quietly confident mood on Tuesday afternoon as he relaxed on the leather sofa of his Washington office.

The Massachusetts Congressman has an easy-going manner, but he is a bogey man to many in Bermuda's financial community who feel he is out to get them. Last year he tried to clamp down on Bermuda reinsurance companies who enjoy "unfair" advantages over those in the US, and this March he tabled legislation to stop American companies getting multi-million dollar tax breaks if they move to the Island.

He insists he is no enemy of Bermuda, but as he chatted with The Royal Gazette this week, he was sure his latest bill would win the support of three quarters of the Congressmen in the House of Representatives - if he could convince Bill Thomas, the Republican chair of the influential Ways and Means committee to allow it onto the House for a vote.

Neal, an Irish-American Democrat whose office is festooned with memorabilia from the old country, has tapped into the patriotic outrage which exploded in February when Connecticut-based tool company Stanley Works announced it was moving from Bermuda to slash $30 million from its tax bill.

In March, three weeks after the New York Times thrust the issue onto the political agenda with a front page story about the wave of companies relocating to offshore jurisdictions such as Bermuda, Neal and fellow Democrat James Maloney tabled legislation to ensure these companies would be treated as domestic corporations, and would not escape a hefty tax bill.

America was in a war against terrorism, and US companies who moved offshore to avoid their taxes were "corporate traitors" who deserted the Stars and Stripes, leaving ordinary Americans to foot the bill for the fighting, he said.

As Neal spoke exclusively to The Royal Gazette on Tuesday afternoon in the Rayburn building on Capitol Hill, he declared that so far, no elected Republican had dared speak out in support of those jumping ship to Bermuda to cut their taxes.

Less than 24 hours later, the Republican Majority leader in the House, Dick Armey, dropped a bomb on the bi-partisan consensus by blaming the US tax system for companies fleeing to Bermuda. Neal's bill could be in danger of dying in committee.

Neal is a popular Congressman who will be returned unopposed in mid-term elections in November. So the charge of milking post-September 11 patriotism for electoral gain cannot be fairly levelled against him, and he has a track record of trying to reform the tax system to prevent corporations dodging their fair share.

Accompanied by his Press officer William Tranghese and tax specialist Melissa Mueller, Neal told The Royal Gazette his latest bill, Corporate Patriot Enforcement Act, was still in the Ways and Means committee, but it "continues to generate a lot of favourable publicity".

He added: "I hope the chair of the committee, after the hearings will give it an up or down vote."