He jumped to Caterpillar’s tax staff in 1992, and his new bosses urged him to travel overseas and learn international tax law.
“I don’t think that the shareholders of Enron would think it would have been such a bad deal if somebody would have caught that before it bankrupted the company and they lost everything they had.” The corporate whistleblower is at once a celebrated and tortured figure in American culture.
Think of Jeffrey Wigand, bane of the tobacco industry, and Enron scold Sherron Watkins, both portrayed in books and movies as people who told truth to power and paid a personal price. Five years ago, the IRS awarded $104 million to Bradley Birkenfeld, a former banker at UBS Group AG, for telling investigators how the bank had helped thousands of Americans dodge taxes—the biggest IRS whistleblower award ever.
As that network expanded, the Geneva office oversaw distribution of replacement parts around the world—a fabulously lucrative business.
Caterpillar doesn’t disclose how much replacement parts contribute to its $38.5 billion in annual revenue, but customers often spend two to three times as much on parts as on machines, according to the 2013 book The parts are distributed from a vast warehouse in Morton, Ill., near Peoria.
For years, Caterpillar accountants credited the Geneva office with 15 percent of the profits on parts sales, while the other 85 percent was allocated as earnings in the U. The company paid an effective tax rate of a little less than 30 percent on those U. With the encouragement of Pw C, where he’d once worked, and the law firm Mc Dermott Will & Emery LLP, Beran reorganized the Geneva operation as Caterpillar Société à Responsabilité Limitée LLC, or CSARL.