Caterpillar Inc.’s top executive believes the U.S. government’s debt is one of the nation’s most pressing problems – and he’s vowed to campaign to push Washington to confront the issue.
The federal debt is a concern for the Illinois-headquartered heavy equipment manufacturer, CEO Doug Oberhelman told Bloomberg Television’s “Street Smart” recently, because it’s a concern for companies that buy construction and mining machinery.
“It’s starting to hold us back,” Oberhelman said. “For the contractor base and customers in this country, it’s worrisome. It has a chill in the air.”
A Caterpillar spokesman told Bloomberg News that Oberhelman is a member of the Campaign to Fix the Debt, a group led by ex-lawmakers, corporate leaders and budget experts. Bloomberg noted, too, that Oberhelman donated $2,500 this spring to Republican presidential nominee Mitt Romney.
One thing Oberhelman didn’t mention in his remarks: a former Caterpillar executive’s claims that the company had contributed to the federal government’s debt by using offshore tax havens to dodge U.S. taxes.
The exec’s allegations first emerged publicly last year via an in-depth report by Bloomberg’s Peter S. Green:
“Caterpillar Inc. used offshore subsidiaries in Switzerland and Bermuda to avoid about $2 billion in U.S. taxes from 2000 to 2009, boosting its earnings through a “tax and financial statement fraud,” according to a Caterpillar executive’s lawsuit.
The company, the world’s largest construction-equipment maker, sold and shipped spare parts globally from an Illinois warehouse while improperly attributing at least $5.6 billion of profits from those sales to a unit in Geneva, according to the suit filed by Daniel J. Schlicksup. He was a global tax strategy manager for Caterpillar from 2005 to 2008.
Schlicksup, 49, sued in U.S. District Court in Peoria, Illinois, in 2009, claiming he was moved to a job that limits his career opportunities because he complained to superiors that the “Swiss Structure” ran afoul of U.S. tax rules.”
For its part, Caterpillar asserted Schlicksup was in error and that the company had broken no laws.
“Caterpillar spokesman Jim Dugan said the company has engaged in no wrongdoing, and its attorneys said in a court filing that Schlicksup’s transfer wasn’t a demotion. Dugan declined to comment on the suit’s specific allegations, saying Caterpillar “complies with applicable tax laws and regulations.”
What a judge or jury would have said about Schlicksup’s lawsuit will never be known. Schlicksup and Caterpillar resolved the case earlier this year on undisclosed terms.
When contacted by Peoria (Ill.) Star Journal about the apparent settlement in the case, Caterpillar spokesman Dugan had no comment.