The patriot tax issue continued to smoulder last week with House Democratic Leader Richard Gephardt adding his voice to those in support of legislation that would adversely affect companies that move overseas - including US firms that reincorporate in Bermuda.

Last Wednesday Mr. Gephardt told the House: "We're here today to address a problem that has got a lot worse in the last few years. There is a gaping hole in the tax code that allows clever opportunists to go offshore to escape paying taxes at the expense of our nation's well-being."

He continued: "To shed one's tax obligation today, all a company has to do is go to Bermuda, open a mail drop and pay a modest fee.

According to reports, four companies estimate tax savings of $525 million per year by incorporating in Bermuda.

"It is an unpatriotic act that has no place in a country that demands responsibility from all while seeking to promote opportunity for all." Mr. Gephardt was adding his voice to the mounting debate from Capitol Hill and the US media in recent months. And although proposed legislative changes could affect any American company that moves out of the US, the focus of the debate has been on corporations that have stated their intention to, or already have, completed an "inverse" incorporation to Bermuda. These companies include Tyco, Global Crossing, Ingersoll-Rand, Stanley Works, Nabors and Cooper Industries.

Speaking of legislation before the House, so far from Rep. Richard Neal and Rep. Scott McInnis, and legislation slated to come in the US Senate as well, Mr. Gephardt said: "Today, Democrats are promoting legislation that will correct some of these flaws. The bill we are introducing will prevent corporations from reincorporating in offshore tax havens to escape paying taxes. It is a specific and urgent change to the tax code to stem the tide of this anti-American profiteering," he said.

Hitting out at the furore however was the former consulting arm of Arthur Andersen, Bermuda-based Accenture Ltd., who claimed their name had incorrectly been caught up in the debate. Following Gephardt's statement in the house, Accenture issued a statement that said: "Contrary to information Accenture did not reincorporate from the US to Bermuda."

Accenture has never been a US-based or operated organisation and has never operated under a US parent corporation.

"Despite these facts, Accenture was included in materials distributed and has been incorrectly included in recent reports regarding US-based companies that have reincorporated in Bermuda to avoid paying US taxes," the firm said.

It added that it paid US taxes on US operations and that its operations outside of the US account for more than half its revenue, and taxes are paid in accordance with the countries in which it operates.

Speaking of its incorporation in Bermuda, Accenture said: "Accenture's parents chose to incorporate the parent company in Bermuda. It was chosen as a neutral location for Accenture's diverse and global business and employee base."

Mr. Gephardt's comments also came under fire from a leading US free-market organisation, the Center for Freedom and Prosperity. Center president Andrew Quinlan said: "The Capitol Hill demagoguery regarding corporate expatriations has sunk to a new low. Democratic House Leader Richard Gephardt claims that these companies - which will continue to employ American workers and continue to pay tax to the US government on all income earned in America - are unpatriotic."

Mr. Quinlan added: "Blocking this protectionist legislation will be a major project for the centre, and we have started strong. Already, more than 20 of the country's largest and most influential free-market groups have signed a joint letter asking the chairmen and ranking members of the House and Senate tax writing committees to reject legislation to restrict expatriations."