Finance Minister Eugene Cox yesterday lashed back at critics of Government's approach to the negative publicity hitting the Island over "corporate inversions" and said Government was doing everything "prudent and possible" to protect Bermuda.

Government has come in for increasing criticism over its actions in regards to companies that set up shell companies on the Island, a process now dubbed "corporate inversion", in order to cut millions of dollars off their US tax bills. The controversy has led to moves to enact legislation, by both the US House and Senate, that could go so far as to ban the moves and deny federal contracts to offshore companies.

Yesterday Mr. Cox said: "Government has done, and continues to do, everything prudent and possible to protect Bermuda's interests." Mr. Cox's statement was issued one day after ACE CEO Brian Duperreault was critical of Government letting in companies that set up nominal headquarters here for the purpose of trimming tax bills. Mr. Duperreault said the Island had "sold its name short" by allowing such companies to move to Bermuda. Indeed, the insurance chief said the Island had "lowered the bar" by letting in such companies and called for a policy change. He said he had made his opinion known, in person and ahead of his public statement, to Government.

And yesterday David Ezekiel, head of the Association of Bermuda International Companies (ABIC), agreed with Mr. Duperreault.

He said Mr. Duperreault had been "very much on target" in his comments.

"Much of what Brian said was along the lines of what has been said before - although not quite so strongly.

"Corporate inversions are not our bread and butter and the benefit (to Bermuda) has always been minimal.

"And the adverse publicity has cast a pall over the rest of the business we do."

Mr. Ezekiel added: "We, for ages, have been saying we have to use our name and resources carefully going forward and that companies should bring with them direct benefits for the economy, especially in the area of employment."

And on Monday Opposition Leader Grant Gibbons slammed Government for doing too little to combat the negative publicity and sentiment against the Island in Washington and across the US.

Ultimately Dr. Gibbons said the fall out could be "serious consequences" for the Island's international business sector.

The matter, which has been at the forefront of political and media debate since early in the year, has put the spotlight on Bermuda after a number of companies, including Ingersoll-Rand, Stanley Works and Cooper Industries, said they would move to the Island to slash their American taxes on income earned on foreign revenue.

In the end the political and media backlash was too much for at least one company, with Stanley Works pulling the plug on its planned move after intense pressure from politicians and the media continuously branded it and other such companies as "unpatriotic".

Without stating what Government's policy was on the matter and if that policy was under consideration, Mr. Cox (pictured) cited Bermuda as having been caught up in the debate indirectly: "Attention continues to be given, in political and media circles both in the US and here in Bermuda, to the phenomenon of US publicly listed corporations that have restructured via the establishment of a company in Bermuda.

"On the one hand the selection of Bermuda by such companies is a compliment to the quality of our island as an international business jurisdiction.

"On the other hand, Government is keenly aware of the negative publicity that such companies have attracted in the US and that, indirectly, Bermuda has been caught up in the politically charged debate that has developed around this issue in advance of the mid-term elections to be held in the US in November."

Mr. Cox also made the assertion, as he had in past months, that Government felt it would be counter-productive to say too much on the matter in the media but that should not be confused with inaction: "I have stated before that because of the political maelstrom that surrounds the issue it would be irresponsible, indeed counter-productive, for Government to attempt to address this matter via frequent official comment in the media. Government's decided abstention from such public comment should not, however, be confused with a lack of considered action.

"In fact, Government's efforts in this matter have rightly been focussed on economic diplomacy.

"Government has, both directly and indirectly, made timely and appropriate representation in appropriate places to safeguard Bermuda's interests and this effort continues.

"The meetings that I personally had in Washington D.C. in May are but one example of this approach."

Mr. Cox has, in months past, refused to name whom he met with on Capitol Hill in May or who might be lobbying on Bermuda's behalf in Washington.

Regardless of possible ramifications on the Island's businesses, the Minister asserted that the matter was ultimately one for the US authorities and not Bermuda: "The Government of Bermuda has always stated that if the process of corporate inversion is, from the perspective of the US, a problem created by the US tax code and not by Bermuda."

Mr. Cox added, and he quoted figures in the USA Today newspaper, that corporate inversions were only a minimal part of the Island's international business: "The very high profile that has been given to the process of US corporations inverting to Bermuda would suggest that the numbers of companies involved is very large and forms a significant proportion of Bermuda's international business.

"This is not the case. The numbers, in fact, are very small and this business represents a very small component of all business conducted in and from Bermuda by international companies.

"USA Today recently reported that a total of only twenty-four US companies had "expatriated" since 1993, and only some of these have relocated to Bermuda."

He concluded: "This is not to say that the issue is not being treated seriously.

"Rather, Government has attached high priority to the matter and will continue to do so in order to preserve our jurisdiction's good reputation and to safeguard the interests of Bermuda and its people."