Facts in Bermuda vacation ad do the job

SUMMARY: Obama's latest attack: John McCain went to Bermuda, said nice things, received donations. Check, check, check.

An attack ad from Barack Obama looks at a trip John McCain made to Bermuda last year.

"Bermuda. It’s more than just a vacation destination for John McCain," the ad says over jaunty, Caribbean-style steel drum music. "McCain went to Bermuda, and while he was there pledged to protect tax breaks for American corporations that hide their profits offshore. And grateful insurance company executives and their lobbyists who benefit from the tax scheme gave McCain $50,000."

Bermuda, a British territory with significant autonomy, is home to many international companies seeking to avoid taxes. In 2006, there were 14,267 international companies registered in Bermuda, many of them American-owned, according to the U.S. State Department. A 2004 GAO report also listed Bermuda as a tax haven.

McCain visited Bermuda in August 2007, when he was still competing for the Republican nomination. The only account we could find about the trip appeared in a Bermuda newspaper called the Royal Gazette . The Obama ad shows a copy of the newspaper while it makes its claim that McCain pledged to protect overseas tax breaks for American companies.

You can read the entire Royal Gazette report online; here's the part where McCain talks about tax laws:

"The Arizona senator, who spent three days on the island this week meeting business and political leaders, said he understood the concerns of the insurance and reinsurance sectors about draft legislation proposing a clampdown on U.S. business operations in so-called tax havens. He told the Royal Gazette : 'The industry, the reinsurance that's had such phenomenal success has been good for both nations. I would oppose any measures that would upset that.'"

The Obama campaign phrases McCain's comments in a negative light, but gets the substance largely correct. McCain said he would oppose attempts to change current law in regards to Bermuda, though he singled out the insurance and reinsurance industries for protection rather than all types of industries. Insurance and reinsurance companies in Bermuda are a high-profile issue, with U.S.-based insurance companies seeking to reverse a treaty with Bermuda that they say puts them at a disadvantage compared with their Bermuda-based competitors. We rated Obama's statement Mostly True.

About the campaign contributions, the Obama campaign compiled a list of 30 people and one political action committee connected to insurance and reinsurance companies based in Bermuda and found their contributions totaled a little over $50,000. We obtained a copy of the list from the campaign and cross-checked with Federal Election Commission records and found it to be accurate.

It seems likely that the Obama campaign's numbers undercounted contributions from lobbyists connected to Bermuda-based insurance companies. We were able to independently document another $8,150 in contributions to McCain.

And finally, among the Bermuda-connected contributors, we found four donors also gave a combined total of $8,200 to Obama.

The timeline seems to be that McCain visited Bermuda in August 2007, a fundraiser for him was held in October (which he did not attend) and contributions were reported to the Federal Election Commission in November 2007 and afterward.

The ad states that McCain got $50,000 from people connected to Bermuda-based companies, and we find this accurately portrays the contributions received. We rated this statement True.

The ad stops short of saying there was a quid pro quo at work, though we get the feeling the Obama campaign wouldn't mind if you assumed there was. A story in the Royal Gazette's sister newspaper Mid Ocean News noted that McCain's 2007 comments were at odds with comments he made in 2002 deploring companies moving overseas. McCain said then, "More and more U.S. companies are using this highly profitable accounting scheme that allows a company to move its legal residence to offshore tax havens such as Bermuda, where there is no corporate income tax, and shield its profits from taxes. I applaud efforts to discourage this practice."

The McCain campaign responded to the Obama ad by pointing out that the Obama campaign rents office space from Accenture, which is based in Bermuda. The Chicago Sun-Times reported in 2007 that the Obama campaign was leasing the 11th floor of an office tower for its headquarters from Accenture. The company is based in Bermuda.