BERMUDA'S tax laws have come under blistering attack from the Attorney General of Connecticut as "opaque" and "lacking any meaningful limitations on insider transactions".

Attorney General of Connecticut Richard Blumenthal said this when he gave testimony before the Sub-committee on Select Revenue Measures of the US House of Representatives Committee on Ways and Means - in support of the Corporate Patriots Act now before Congress which seeks to close "tax haven" loopholes.

The Congressional push to close loopholes in the US tax codes came in the aftermath of a series of major corporate scandals, including Enron.

Mr. Blumenthal has spoken vehemently against Bermuda because Connecticut is a major on-shore financial centre and has much to lose from off-shore business centres. He said Connecticut had "learned the hard way" from companies such as Stanley Works attempting to move to Bermuda.

He said Stanley Works was the most recent and "notorious" company to attempt tax avoidance by relocating to Bermuda. The Attorney General said the manufacturing company was located in Connecticut for 150 years, but had so much manufacturing done overseas that it was in danger of its products losing the "Made In America" label.

"Now this same time, corporate executives and other holders of thousands of shares of the corporation will receive huge windfalls from stock options as their stock price rises because of increased profits," he said.

"Stanley Works estimates that its stock may rise by 11.5 per cent after reincorporations in Bermuda."

Much of his testimony was directed against Bermuda tax laws, which he perceives to be inferior to those in Connecticut. Bermuda was the only jurisdiction named by him.

He said incorporating in another country would restrict shareholders rights because "foreign laws are weaker than ours".

"First there is the single problem of the opacity of Bermuda law," he said. "Even sophisticated shareholders may have extreme difficulty in obtaining information about Bermuda law and evaluating the impairment of their rights under Bermuda law.

"Bermuda does not even maintain an official reporter of its court decisions. We have learned from the Enron scandal the danger for shareholders, employees and regulators of shielding important corporate information from the public scrutiny.

"The movement of corporations to a place where the legal rights of shareholders are severely constrained and confused - at best unclear is a matter of grave concern."

Despite his claim that Bermuda law was difficult to research, he still felt confident enough to state: "Bermuda law lacks any meaningful limitations on insider transactions. Like most states, Connecticut imposes restrictions on corporate dealings with interested directors of corporation the kind of restrictions that appear to have been violated in the Enron debacle.

"Those protections appear to be absent under Bermuda law."

And he went on: "Bermuda law also fails to provide shareholders with decision-making authority or fundamental changes in the corporation. Connecticut law, like statutes of most states, requires that shareholder approval be obtained before the corporation may sell or dispose of a substantial portion of the assets of the corporation. Bermuda law contains no such requirement."

Mr. Blumenthal also said there were "serious questions" about the enforceability of US judgments in Bermuda.

"There is presently no treaty with Bermuda that ensures the reciprocity of judgments," he said.

Neither the Bermuda Ministry of Finance nor the Connecticut Attorney General's office had returned phone calls by press time last night.