Exclusive: U.S. investigators were told to take ‘no further action’ on Caterpillar, ex-client of Barr

WASHINGTON (Reuters) – The option of President Donald Trump to…

WASHINGTON (Reuters) – The option of President Donald Trump to rule the U.S. until William Barr became President Department of Justice, in a federal criminal inquiry by the department, he represented Caterpillar Inc, a Fortune 100 company.

Much was at risk for Caterpillar: Since 2018, $2.3 billion in business fees have been requested by the Internal Revenue Service in conjunction with tax issues under criminal inquiry. The organisation is contesting the conclusion.

According to an email written by one of the agents and checked by Reuters, a week after Barr was named for the role of attorney general, justice officials in Washington told the investigation team in the ongoing criminal inquiry of Caterpillar to take’ no more steps’ in the matter.

The decision, the email said, originated from the Tax Section of the Justice Department and the office of Rod Rosenstein, the deputy attorney general.

On December 13, 2018,” wrote the agent, Jason LeBeau, “I was told that the  Division and the Deputy Attorney General’s Office collectively agreed that no more action could be taken on the matter before further notice.” LeBeau, a U.S. inspector general agent.” The Federal Deposit Insurance Company rejected calls from Reuters for interviews.

Since then the inquiry has “stalled,” a source close to the case reports. The decision to freeze the Caterpillar investigation has not been publicly stated.

Reuters was unable to ascertain whether the “no further action” order was provided by Justice. As it came before he was confirmed, it was not released by Barr. A Justice Department spokesperson said that after he became attorney general, Barr recused himself from all Caterpillar talks, but refused to comment. During his confirmation hearings, Barr, in testimony, claimed legal protection laws prohibited him from disclosing his job with the organization.

In May 2019, Rosenstein, who quit the government, did not respond to a telephone message or emails requesting clarification. The IRS refused to elaborate on the event.

For its part, Caterpillar has confirmed to investors that the inquiry by the grand jury is continuing. The firm told Reuters the report is being investigated by the DOJ’s Tax Division. For years, Caterpillar has said it did nothing wrong.

“I was told that the  Division and the Deputy Attorney General’s Office collectively agreed that no more action could be taken on the matter before further notice.”

LeBeau, a U.S. inspector general agent

When high-powered attorneys turn between private practice and govermment service, possible conflicts of interest, whether actual or obvious, sometimes occur. Bruce A. Green, a retired federal prosecutor who lectures at Fordham Law School, said finding customers who had company before the DOJ is not unheard of for attorney generals. He noticed that the attorney general of President Barack Obama, Eric Holder, recused himself from a lawsuit concerning Swiss Bank UBS, a prior customer, in 2009.

But Green said he did not remember a situation where, without any kind of clarification, agents were ordered to pursue no further action on a matter concerning the previous client of an incoming attorney general. Why will you just quit doing that? “Asked him.

A person acquainted with the success of the inquiry that is being carried out outside the United States The Illinois Central District Attorney’s Office has said that since December 2018, “it’s slowed down, it’s stalled, it’s languishing.” Not a lot of action is being taken.” But the source stressed that the probe is not technically closed and that “missing” could not be called.”


The government’s concerns regarding the tax system of Caterpillar began in 2009 with a whistleblower complaint that pointed forth what it alleged was a sophisticated “tax dodge” to route Caterpillar revenues via a business in Switzerland on parts sales. Then, the U.S. in 2014 The Senate Permanent Inquiry Subcommittee dug into the issue, arguing that the corporation pursued a distribution policy that “shifted billions of dollars in profits away from the United States and into Switzerland, where Caterpillar had negotiated an effective 4% to 6% corporate tax rate.” The Senate investigators cited insiders of the company who claimed the scheme was designed for “tax.”

Caterpillar stated at the time that the deals, and the tax policy, were absolutely legitimate. A Caterpillar vice president testified to the committee that it was nothing more than the standard business operations and tax planning that any prudent multinational business would employ to have an offshore subsidiary collect profits and pay taxes.”

A criminal probe was initiated before a federal grand jury in Illinois the same year. Three Caterpillar offices were seized by federal agents in March 2017, wheeling out proof in huge black cardboard cases. A researcher for the investigators, Leslie Robinson, named the tax plan’ deceptive rather than incompetent’ in a study prepared for the government.

Jim Umpleby, Chief Executive of Caterpillar, confirmed the appointment of Barr as business attorney two weeks after the raid. Barr will “take a fresh look at the disputes between Caterpillar and the government, get all the facts, and then help us to correctly resolve these issues based on the merits.”

Robinson, the investigation analyst who challenged the strategies of Caterpillar, told Reuters that in May 2017 she visited Barr, advising him about why she believed the tax policy was unconstitutional, and to learn why the firm thought it was not. Robinson said she would not clarify in the government’s study the meeting information or the basis for her conclusion.

In November 2018, Barr’s name was among those floated when the White House scanned possible lawyers to assume the position of attorney general. The White House declared his appointment on December 7. “From day one, he was my first choice,” Trump added. Barr has emerged as one of the most militant advisors to Trump, most notably authorizing federal authorities to probe the counting of votes that Trump lost to Democrat Joe Biden in the presidential election this month.

“Robinson, a professor at the Tuck School of Business at Dartmouth College, sent a note to FDIC agent LeBeau in January 2019 asking if the case was “dead or moving.” Robinson wrote, “From a personal point of view, it is a little strange to have invested too much of my time and energies on something and yet to have no idea whether it would amount to something meaningful.

“Quite frankly, I’m also kind of in the dark,” responded LeBeau. He said he believed the Caterpillar was in talks with a new U.S. solicitor, but he knew nothing else. “I know that the process goes incredibly slowly.”

Robinson communicated again with the prosecutors this October. She questioned what happened to the case in emails checked by Reuters, adding that a Reuters writer had inquired. That’s when LeBeau clarified that they had been ordered to pursue no more steps a week after Barr’s appointment 20 months earlier, copying other agents and a lawyer on the email.

“No additional explanation was given to us,” he wrote.

Leave a Reply

Your email address will not be published. Required fields are marked *