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Senators Launch Inquiry Into 'Stalled' Caterpillar Tax Probe

Peoria Public Radio File Photo
Federal agents load documents into a car taken from Caterpillar's then-world headquarters on Adams Street in downtown Peoria on March 2, 2017.

Two U.S. senators are investigating whether former U.S. Attorney General Bill Barr improperly interfered with a federal probe into Caterpillar's tax practices.

In March 2017, federal agents raided Caterpillar's now-former world headquarters in Peoria, as well as facilities in Morton and East Peoria, as part of an investigation into the company's alleged funneling of cash through a Swiss subsidiary to dodge paying billions of dollars in U.S. taxes.

The company was subpoenaed by a federal grand jury in connection with the case as early as January 2015.

Barr, then a private attorney,was retained by Caterpillar to "take a fresh look" at and resolve the company's issues with the U.S. government.

But as Reuters reported last year, an order was issued to "take no further action" on the Caterpillar case just days after Barr was nominated to the office of Attorney General in December 2018.

U.S. Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, and Sen. Sheldon Whitehouse (D-R.I.), who leads a Senate subcommittee overseeing federal courts and agencies, penned letters on Wednesday to Attorney General Merrick Garland, Internal Revenue Service Commissioner Charles Rettig, and National Archivist David Ferriero seeking assurance that investigation wasn't halted due to "conflicts of interest or improper political interference."

"The investigation has reportedly been ‘stalled’ since this order was issued and many questions remain unanswered about the decision and what ethics guidance was provided to Mr. Barr regarding the matter," wrote the senators in the letter to Garland and Rettig.

The letter specifically asks if the U.S. Attorney's Office for the Central District of Illinois or the IRS issued any written recommendations to the DOJ's tax division regarding prosecution, and if the Central District office submitted a written request for reconsideration if the tax division declined to take up the Caterpillar tax case.

Caterpillar owed the federal government about $2.3 billion in unpaid taxes and fees linked the the case, as of 2018.

Caterpillar did not immediately return a request for comment for this story.

The letters also request documents related to a tax enforcement action involving Renaissance, a politically-connected hedge fund. The senators say the hedge fund's former CEO, Robert Mercer, gave $22.5 million in disclosed contributions to Republican candidates and PACs in 2016, including $15.5 million to a pro-Trump PAC which employed the future senior Trump staffers Kellyanne Conway and Stephen Bannon.

The senators requested documents be returned by the DOJ, IRS, and National Archives no later than May 18.

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Tim is the News Director at WCBU Peoria Public Radio.