Call to Limit Caterpillar’s EU Lobby Access After Inquiry No-Show

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By Joe Kirwin

Leading members of the European Parliament’s Panama Papers investigative committee are calling for U.S. multinational company Caterpillar Inc. to be restricted from lobbying at the institution after it refused to participate in a Sept. 26 hearing on corporate tax planning.

Members of Parliament such as European Green Party member Sven Giegold and Socialist and Democrat Hugues Bayet insist Parliament rules adopted after the LuxLeaks tax ruling scandal, calling for restrictions on any company refusing to testify, should be enforced.

Giegold said Caterpillar has engaged in “alleged illegal” profit shifting, about which he and other committee members wanted to inquire at the hearing.

In a Sept. 27 formal request to European Parliament President Antonio Tajani and Secretary General Klaus Welle, Giegold asked that Caterpillar lose its lobby access rights.

The letter noted that Caterpillar had been issued an invitation in July 2017 but the company declined by insisting the recipient of the letter was the wrong person to answer questions, and it never provided information about the right person to contact.

“The U.S.-based machine engineering company is alleged to have illegally used a Swiss subsidiary to record profits from its international spare parts business to minimize its tax burden,” Giegold said Sept. 26 in a statement.

Caterpillar’s Response

Caterpillar insisted in a statement that its lobby representatives accredited to the European Parliament “strictly adhere” to the rules of the EU Transparency Register. As a result, the company said it fully expects “a fair treatment as well as a level playing field between stakeholders in the European Parliament.”

A Caterpillar official also told Bloomberg BNA in a statement Sept. 27 that the company wasn’t involved in the LuxLeaks or Panama Papers scandals and doesn’t have any legal problems with any EU member state tax authorities.

In the company’s letter to the Panama Papers panel—a copy of which was obtained by Bloomberg BNA—the company said “erroneous or misinformed statements” have been made against the company by some members of the parliament.

The 2016 Panama Papers involved leaked documents from a Panamanian bank sthat et up shell corporations to help clients avoid taxes. LuxLeaks outlined specialized tax deals the Luxembourg government forged secretly with some multinational companies.

Layoffs

In March Caterpillar announced it was shutting down its Belgian-based factory in the town of Gosselies, which meant the loss of more than 2,000 jobs. Along with his job as a member of the European Parliament, Bayet is also the mayor of Gossilies.

Rules allowing the European Parliament to restrict lobby access to companies stems from 2015, when a number of multinational companies refused to testify before a committee investigating the LuxLeaks scandal.

To contact the reporter on this story: Joe Kirwin in Brussels at correspondents@bna.com

To contact the editor responsible for this story: Penny Sukhraj at psukhraj@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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