Obama says McCain went to Bermuda and "pledged to protect tax breaks for American corporations that hide their profits offshore."

Barack Obama on Tuesday, September 23rd, 2008 in in a television ad

Mostly True

Yes, McCain said he would oppose some changes

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 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.

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.

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. We rate Obama's statement Mostly True.