Schock blasts Levin's Caterpillar probe

Rep. Aaron SchockAaron Jon SchockSchock's lawyers to press Supreme Court to take up his case Appeals court rejects Schock's effort to dismiss indictment Ethics Committee to expand campaign finance investigation of Tennessee Republican MORE (R-Ill.) is blasting Sen. Carl Levin (D-Mich.) for going after the tax practices of Caterpillar, the machinery company based in his district.

In a statement Tuesday, Schock accused Levin of pursuing an “inquisition” into the company’s tax practices that besmirched not the reputation of the company, but the reputation of Levin.

“The demonization of a great American company that … remains in full compliance with U.S. tax law is beneath the dignity of the United States Congress,” he said. “I am thankful that Chairman Levin’s efforts do little to undermine American confidence in Caterpillar’s reputation or its more than 118,000 employees worldwide. The lasting reputation of Chairman Levin and his committee, on the other hand, may be another story.”


On Monday, the Permanent Subcommittee on Investigations released a report finding that Caterpillar based a profitable branch of its company in low-tax Switzerland, and avoided paying $2.4 billion in U.S. taxes in the process.

The report was the latest in a series of probes by Levin’s panel on how companies maneuver offshore to shrink their U.S. tax bill. The subcommittee was pressing Caterpillar executives Tuesday on the arrangement. Company executives defended their approach to U.S. taxation, saying the company paid an effective rate of 29 percent and was fully compliant with U.S. tax law.

Sen. John McCain (R-Ariz.), the ranking member on the subcommittee, did not endorse the Caterpillar report, after backing similar efforts targeting other companies. Rather, McCain said the nation’s high corporate tax rate was pushing companies to seek offshore solace.

But Schock, whose district includes Caterpillar’s Peoria headquarters, took a more aggressive tone, saying Levin was demonizing the company with partisan attacks.

In defending the company in his backyard, Schock took a jab at Levin’s home state industries. Schock said that while Caterpillar paid an effective tax rate of 29 percent, General Motors paid an effective rate of zero, and wondered why Levin did not go after the flagship company in his home state.

“Serious questions arise about the motive and methodology behind Chairman Levin’s one-sided investigation,” Schock said.

Levin defended his probe as wholly legitimate Tuesday, saying it was critical for Congress to closely examine how American companies avoid American taxes, no matter what they do.

"Caterpillar is a very, very fine manufacturing company," he said. "I'm all for manufacturing, but I'm not for people avoiding paying taxes."

Caterpillar was a significant donor to Schock during the 2012 election cycle, as the fourth-largest donor to his reelection campaign, according to data from OpenSecrets.

During the 2014 cycle, the machinery giant was not among Schock’s top 20 donors. But replacing Caterpillar in the fourth spot was PricewaterhouseCoopers. According to Levin’s report, that accounting firm was paid $55 million in 1999 to come up with the tax strategy that allowed Caterpillar to send most of the profits from its most profitable branch to Switzerland.

This post updated at 3:24pm. Bernie Becker contributed to this post.