Is Bill Barr Slow Walking a Caterpillar Tax Fraud Case In Favor of Another Client?

Reuters that DOJ directed the lead FDIC agent investigating an alleged $2 billion fraud by the farm machinery manufacturing giant “to take no further action a week after Bill Barr’s nomination to be the Attorney General some twenty months ago.”

Various inform that Caterpillar was a former client of Barr’s before he took on the position and stance of toadying to the only client that mattered as United States Attorney General. President Trump famously decried during one of his many political rallies. Apparently, Billyboy got the message.

DOJ Tax Division and the US Attorney’s office in the Central District of Illinois continue to sit on an apparent massive tax fraud case that involved a corporate whistleblower and enough probable cause to justify the execution of federal search warrants at three locations controlled by the corporate colossus. outline a case involving multiple offshore shell companies, a double set of books, the misrepresentation of repatriated income as tax-free ‘loans,’ and multiple incriminating emails circulating among corporate executives. But the order has gone out to those investigating and purportedly prosecuting — “take no further action!”

In contrast to the lack of DOJ action in this gargantuan tax fraud case, Bill Barr has recently authorized, according to an , scrutiny of allegations about ineligible voters in Nevada and backdated mail-in ballots in Pennsylvania without any evidence emerging to back them. Further, Barr issued a memo to all U.S. Attorneys around the country initiating a new policy with regard to investigating allegations of voter fraud by authorizing them to pursue substantial allegations of voting irregularities prior to the certification of elections in their respective jurisdictions.

Summing up — the Attorney General of the U.S. is animating Federal prosecutors around the country to vigorously pursue allegations of apparent phantom voter fraud for his main perceived client — the President — while sitting on, and rendering dormant, an investigation of alleged massive corporate tax fraud for an ex-client of his — Caterpillar.

When the Republican-dominated Senate rubber-stamped Trump’s selection of Bill Barr as Attorney General were they simply approving the appointment of the ‘big guy’s’ personal mouthpiece or were they also complicit in providing Corporate America protection from prosecution by government regulatory authorities for a price?

Consider for a moment the political contributions of the political action committee organized by and for Caterpillar according to OpenSecrets.org. During the period 2017–2018, a total of of all political contributions attributed to Caterpillar went to Republican candidates for Federal office.

One is reminded here of the Will Rogers aphorism — “I don’t think you can make a lawyer honest by an act of legislation. You’ve got to work on his conscience. And his lack of conscience is what makes him a lawyer.”

If Barr in fact has no conscience doesn’t he possess at the very least a duty to abide by his oath of office and commitment to the Constitution and country? Not just his client(s)? Doesn’t the government for the people and by the people deserve better from their chief law enforcement officer and office?

Consider that the Federal deficit is estimated to now be in the trillions and easily the largest in our history. Much of that deficit was generated by President Trump’s single biggest ballyhooed legislative accomplishment — a massive tax cut for corporations and wealthy individual taxpayers. This deficit will be further exacerbated by the trillions that have been justifiably spent on past and possibly future CARES ACT relief for the Covid inflicted.

Shouldn’t the entirety of the Federal government proceed now in haste to vigorously enforce the Tax laws as written and bring to justice those who willfully evade their tax responsibilities and thereby further burdening those who voluntarily comply with the law?

The answer to the above question likely lies with the incoming administration. There will be a new Attorney General to replace Barr and one can only hope that it will be someone in the spirit of Sally Yates — the holdover acting AG from the Obama era who was fired by Trump. One can hope whoever ascends to AG will reinvigorate thethat directed all U.S. Attorneys to seek out and prosecute individual corporate executives responsible for corporate fraud implementing prison terms and not just settling for Deferred Prosecution Agreements(DPAs) or Non-Prosecution Agreements(NPAs) on the companies with the assertion of massive civil fines/penalties. Sending culpable corporate executives to jail will send a clear signal to the corporate executive ranks of America that should make some greedy corporate officials shudder.

The new administration needs to address the purposeful neglect of employment attrition within the ranks of the IRS that prevents this key agency from fulfilling its duties to compel the citizens ‘to render unto Caesar what is Caesar’s’ in the voluntary compliance style that has made it the most effective tax enforcement agency in the world. Investment in the staffing of trained tax compliance specialists will provide a return on the investment of an increase of untold found revenue.

Further, special expertise is needed to address the murky world of offshore financial secrecy that is facilitated by an untold number of attorneys, bankers, accountants, and financial consultants. Check out the provided by ICIJ and the Paradise Papers with regard to Caterpillar’s offshore entities and the integral Intermediary role played by Appleby Services located in Bermuda.

That graphic is pretty daunting but still very telling. If one further explores that graphic and clicks on the name (Caterpillar tax manager) one would note a host of well over a dozen offshore shell companies linked to Caterpillar. Note the addresses on the link which includes Peoria, Illinois — home to Caterpillar and middle America.

Fortune 100 corporations don’t just make use of the services of big law firms when dallying in offshore maneuvers. They frequently make use of large accounting firms. Various have pointed out PriceWaterhouseCoopers as having facilitated the shady Caterpillar tax maneuvers in question here. One can explore this connection by clicking on the ICIJ graphic connecting Caterpillar and PriceWaterhouse .

Additionally, the presence of FDIC investigators in the Caterpillar investigation suggests the likelihood of shady bank dealings in facilitating the large-scale overseas Tax fraud outlined earlier in addition to the questionable accounting services provided by Price Waterhouse. That bank needs to be identified, investigated, and prosecuted should the evidence be dispositive. Justice demands that the investigation of this bank not go the way of the Deutsche Bank dormancy or the alleged Executive Office interference of the Halkbank money laundering imbroglio. But for now, the identity of the involved bank is unknown so let us highlight the known.

Does anyone really think that Caterpillar is alone among Fortune 100 corporations in making use of offshore intermediary companies, banks, law firms, and giant accounting firms to facilitate their corporate tax shenanigans? What about PriceWaterhouse? Was Caterpillar a one-off for the Accounting behemoth? The ICIJ database suggests otherwise when it over 800 corporations to PriceWaterhouse Bermuda.

When the government recognizes criminal conduct by one of the country’s largest corporations but does not do anything about it, isn’t the government complicit in enabling fraudulent behavior for the entitled few and eroding the very law that it is responsible for enforcing for all?

If Caterpillar and its executives are not prosecuted for perpetrating a substantial tax fraud, is the government guilty of providing a sense of entitlement to corporate America — and sending a subliminal message that it is shielded from wrongdoing by the protection of the powerful and all that contribute to them?

Roger Ferguson that he is stepping down as CEO of one of the largest financial companies in the US — TIAA. He was under consideration for nomination to be the Secretary of Treasury in the new Biden administration. Ferguson has enjoyed a long career as one of the very few minority CEOs in corporate America. Ferguson has long espoused concerns about the social and economic inequities in the U.S. and has made it his life’s mission to address them in some meaningful fashion.

One recommended way to address these issues which were emphasized in the run-up to the Democratic primaries this past summer would be to correct the tax law via legislation to make it more equitable. Even more meaningful would be for leadership to direct the tax law already on the books to be enforced in a more compelling fashion than what has been witnessed in the Caterpillar affair.

Updated anti-money laundering legislation has beenin a bipartisan fashion(when does that ever happen?) with regard to requiring that all ultimate beneficial owners of offshore shell companies are identified to the authorities. But sources report that this legislation proposed in June 2019, is being and quietly sabotaged by elements of the American Bar Association that find the provision of offshore legal advice to their clients to be quite lucrative. Profits over people. Clients over country.

Where have we heard this before?

We could finish by quoting Shakespeare “Kill all the lawyers,” but one finds Lenny Bruce to be a tad more on target at least with regard to Caterpillar and the Department of Justice — “In the Halls of Justice the only justice is in the halls.”

Let's pray that Lenny Bruce is wrong and Roger Ferguson is right when it comes to enforcing and perhaps changing the tax laws to the greater benefit of the all and not just the few.

We will see…

Martin J. Sheil

Proton email address: martinsheil@protonmail.com

Photo by Adrien-Delfor — Unsplash

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Martin Sheil

Martin Sheil

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Retired Special Agent IRS Criminal Investigation; Federal Contractor Deloitte & DOJ OCDETF; Letters of Commendation from Directors FBI Louis Freeh & Comey