Richard Blumenthal - Attorney General Career - Stanley Works

Stanley Works

On May 10, 2002 then Attorney General Blumenthal and Connecticut State Treasurer Denise L. Nappier helped to stop the hostile takeover of New Britain-based Stanley Works, a major Connecticut employer, by filing a lawsuit alleging that the move to reincorporate in Bermuda based on a shareholder's vote of May 9 was "rife with voting irregularities." The agreement to temporarily halt the move was signed by New Britain Superior Court Judge Marshall Berger. On June 3 Blumenthal referred the matter to the U.S. Securities and Exchange Commission (SEC) for further investigation and on June 25 he testified before the U.S. House Committee on Ways and Means that "Long-time American corporations with operations in other countries can dodge tens of millions of dollars in federal taxes by the device of reincorporating in another country" by "simply incorporation papers in a country with friendly tax laws, open a post-office box and hold an annual meeting there" and that Stanley Works, along with "Cooper Industries, Seagate Technologies, Ingersoll-Rand and PricewaterhouseCoopers Consulting, to name but a few, have also become pseudo-foreign corporations for the sole purpose of saving tax dollars." Blumenthal stated that "Corporations proposing to reincorporate to Bermuda, such as Stanley, often tell shareholders that there is no material difference in the law" but said that this was not the case and was misleading to their shareholders. In order to rectify this situation he championed the Corporate Patriot Enforcement Act to close tax loopholes.