Massachusetts Senator John Kerry, the front-runner for the Democratic presidential nomination in the US, has been Bermuda bashing his way along the campaign trail with his frequently naming companies and chief executives 'Benedict Arnolds' if they move jobs and operations overseas ? including to the Island ? to avoid paying US taxes.

But a Washington Post article last week revealed that Sen. Kerry has directly benefited from campaign donations and fundraising assistance, with his taking funding from top executives at companies that fit his own description of Arnold, the notorious traitor of the American Revolution.

One of those executives contributing to Sen. Kerry's efforts to get to the White House was a Tom Steyer, who works with an investment firm that helped Arch set up its operations in Bermuda. The Washington Post report cited Arch as saying in a 2000 regulatory filing that it was moving to the Island to cut its US tax bill. The heat is on Sen. Kerry for taking money from these executives after repeated vows that he would crack down and deny contracts to companies that move their place of incorporation offshore for tax reasons.

Sen. Kerry has taken aim at the so-called 'Benedict Arnold' companies as part of a much broader political and policy debate over stemming the flow of well-paying US jobs overseas, a chief cause of unemployment, especially in the hardest-hit manufacturing sector.

The Washington Post said that executives and employees at such companies have contributed more than $140,000 to Sen. Kerry's presidential campaign, a review of his donor records shows.

In addition, two of Sen. Kerry's biggest fundraisers, who together have raised more than $400,000 for the candidate, are top executives at investment firms that helped set up companies in what was described in the report as the best-known offshore tax havens, federal records show.

Sen. Kerry has raised nearly $30 million overall for his White House run.

Sen. Kerry's solution, detailed in a speech this week in Toledo, is to enforce trade agreements, track and slow the outsourcing of US jobs, and stop government contracts and tax incentives from going to companies that move operations or jobs offshore.

Sen. Kerry has come under attack from President George W. Bush, as well as some Democrats, for criticising laws he voted for and lambasting special interests after accepting more money from paid lobbyists than any other senator over the past 15 years. Some Democrats worry that Kerry is leaving himself open to similar attacks on this latest issue.

President Bush has himself taken what was reported as "exponentially" more from these companies than Kerry, though Mr. Bush has not made a major campaign issue out of clamping down on them.

On Monday, Sen. Kerry was asked why two of his biggest fundraisers were involved with 'Benedict Arnold' companies. "If they have done that, it's not to my knowledge and I would oppose it," Kerry told a New York television station. "I think it's wrong to do [it solely to avoid taxes."

Then he sought to clarify his position: "What I've said is not that people don't have the right to go overseas and form a company if they want to avoid the tax. I don't believe the American taxpayer ought to be giving them a benefit. That's what I object to. I don't object to global commerce. I don't object to companies deciding they want to compete somewhere else.''

The Washington Post reported that David Roux, a Seagate Technology Inc. co-founder, had raised more than $250,000 for Kerry since 2002. Seagate reincorporated in the Cayman Islands several years ago. Mr. Roux has described himself, in a media interview last year, as the "anchor tenant in John Kerry's fundraising mall".

The report also named Stephen Luczo, chief executive of Seagate, as contributing $4,000 to Sen. Kerry, the maximum allowed under law, and $2,000 to the candidate's legal defence fund. Thomas Steyer, a partner at a California investment firm called Hellman & Friedman LLC that helped set up an insurance company in Bermuda, was said to have raised around $200,000 for Sen. Kerry.

Citing the Island as a "popular tax haven", the Washington Post reported that Mr. Steyer had helped Arch Capital Group Ltd. set up in Bermuda, with the company reportedly stating in a 2000 Securities and Exchange Commission filing that it was sinking roots in Bermuda to reduce its US tax bill.

Mr. Steyer reportedly said that it "wasn't my decision" to set up the company in Bermuda and that he now spends less than 10 percent of his time at Hellman & Friedman. "I believe American citizens should pay their American taxes," Steyer said. He said he "absolutely" does not consider himself part of a "Benedict Arnold" enterprise.

When asked for the definition of a 'Benedict Arnold' company or CEO, Stephanie Cutter, Sen. Kerry's spokeswoman, said: "Companies that take advantage of tax loopholes to set up bank accounts or move jobs abroad simply to avoid taxes." She pointed to a list compiled by Citizen Works, a tax-exempt non-profit group that monitors corporate influence, as a source on the companies that fit the candidate's definition.

According to federal election records, Sen. Kerry has received $119,285 from donors employed at what Citizen Works describes as the "25 Fortune 500 Corporations With the Most Offshore Tax-Haven Subsidiaries". The list does not include nearly all of the companies that shave their tax bill by moving jobs and operations overseas, so Kerry has actually raised substantially more from firms qualifying as "Benedict Arnolds."

Sen. Kerry has also received $20,100 in donations directly from individuals at companies with mailing addresses offshore to avoid paying US taxes, records show.

"Senator Kerry has made it crystal clear that he's going to close these loopholes, forever," said Chad Clanton, a Kerry spokesman. "Nothing will stop him. Period."

Sen. John Edwards, whose campaign gets most of its money from trial lawyers, has not described these companies in such harsh terms and has received less from them, Federal Election Commission records show. Edwards took in $500 from a Tyco International Ltd. employee and $75,000 from the 25 Fortune 500 companies with the most offshore-tax-haven subsidiaries.

The Illinois House this week voted to ban state contracts to companies that use so-called 'tax havens' to cut down their US tax bills.

In a news report, Illinois representatives were said to also have voted 113 to zero on Wednesday to end the exemption from state income taxes for companies using overseas addresses for tax reasons. It must now move to the state senate.

The report said that international companies often qualify for exemptions from Illinois taxes, pushing some companies to claim international status and to reincorporate overseas.

The legislation was put forward by comptroller Dan Hynes and said that companies incorporated in Bermuda, as one of about 40 countries on the list included with the bill, could be barred from state business and tax exemptions.