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Justice Dept. told investigators to halt probe into Caterpillar, a former private-sector client of Barr, one week after he was named AG

Department of Justice investigators were told to take “no further action” in an active criminal probe of Caterpillar, a former private-sector client of William Barr, one week after Barr was nominated to be Attorney General, Reuters reports.

Caterpillar was in the middle of a battle with the Internal Revenue Service about an alleged back-tax bill of $2.3 billion.  The Department of Justice was looking into other alleged tax-avoidance schemes by the company, including running profits for parts sales through a Swiss subsidiary.

Upon Barr’s nomination, however, Justice’s Tax Division and from then-deputy attorney general, Rod Rosenstein, instructed via email the investigators from the U.S. Attorney’s Office for the Central District of Illinois to cease the investigation.

“I was instructed on December 13, 2018,” wrote Jason LeBeau, a DoJ investigator at the time, “that the Tax Division and the Office of the Deputy Attorney General jointly came to the decision that no further action was to be taken on the matter until further notice.” LeBeau is now an agent for the Federal Deposit Insurance Company.

The investigation has been at a standstill ever since.

A Caterpillar representative told the U.S. Senate Permanent Subcommittee on Investigations that its tax strategy was completely legal during a 2014 hearing.  However, a federal grand jury launched an investigation into the company’s tax avoidance scheme shortly thereafter.

Barr was hired by Caterpillar as company counsel two weeks after an FBI raid on three company offices in May 2017.  A report written by an outside tax consultant for the Department of Justice called Caterpillar’s tax avoidance scheme “fraudulent rather than negligent.”

On December 8, 2018, Barr was nominated by President Trump to be the next Attorney General.  Investigators were told to stop the Caterpillar investigation less than a week later.

While conflicts of interest are not uncommon for people entering the federal government, such issues are typically resolved by the individual involved recusing him/herself from decisions regarding the target.  Obama’s Attorney General Eric Holder recused himself from an investigation into Swiss Bank UBS because the bank was a former client of his.  Barr never stated that he recused himself from the Caterpillar case, and the investigation remains incomplete.

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