Caterpillar, the industrial giant, enlisted the services of William Barr and a team of lawyers to navigate a federal criminal investigation probing accusations of engaging in tax avoidance strategies.
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In December 2018, the Justice Department abruptly canceled a federal law enforcement team’s planned interview with a crucial witness in the Caterpillar tax evasion investigation.
This investigation into Caterpillar had begun in 2009, stemming from a whistleblower claim that the company had evaded billions in U.S. taxes by diverting profits to a Swiss subsidiary. As the case progressed, Caterpillar enlisted a powerful legal team led by William P. Barr, the former attorney general in the George H.W. Bush administration.
President Donald Trump nominated William Barr to return as attorney general a week before the scheduled witness interview in Amsterdam.
Subsequently, the Justice Department, under the directive of Richard Zuckerman, ordered the meeting canceled without consulting the prosecutor overseeing the Caterpillar case, triggering internal concerns and calls for an investigation.
Caterpillar’s legal team, including Barr, criticized the investigation’s legitimacy and questioned the conduct of one of the agents involved. The pressure mounted, but the investigation persisted until Barr escalated the matter in May 2018, sending a letter arguing that the inquiry violated procedural requirements for criminal tax investigations.
Barr and his colleague, James Cole, met with Zuckerman multiple times, attempting to influence the course of the investigation. However, the inquiry continued, leading to a surprising turn of events in December 2018. Barr’s nomination for attorney general prompted the Justice Department to halt the investigation abruptly, without briefing key officials or the lead prosecutor.
Despite objections and inquiries from the prosecutor, Eugene Miller, the directive to cancel the witness interview in the Netherlands came just hours before it was scheduled. Caterpillar, with Barr’s assistance, successfully navigated the legal landscape.
The investigation concluded in 2022 with a settlement, with the IRS demanding $490 million in taxes over ten years, significantly less than the initially claimed $2.3 billion.
The settlement also highlighted the irregularity of the investigation’s handling. Agents were never allowed to review most seized records, a situation deemed “completely unprecedented” by one of the investigators.
The case raised concerns about potential political interference, highlighting the influence wielded by well-connected individuals in high-stakes legal matters.
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