Caterpillar avoided $2.4 billion in taxes thanks to a reorganization that housed its most profitable business in Switzerland, according to a Senate report.

While the report, from the Senate Permanent subcommittee on Investigations, said Caterpillar had done nothing illegal, it criticized the manufacturing giant for trying to avoid paying U.S. taxes.

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“Caterpillar is an American success story that produces tremendous industrial machines,” Sen. Carl Levin Carl Milton LevinMichigan to pay 0M to victims of Flint water crisis Unintended consequences of killing the filibuster Inspector general independence must be a bipartisan priority in 2020 MORE (D-Mich.), the head of the investigatory panel, said Monday.

“But it’s also a member of the corporate profit-shifting club that has shifted billions of dollars in profits offshore to avoid paying U.S. taxes,” Levin said. “This is a prime example of a tax avoidance strategy that has cost the U.S. Treasury billions of dollars.”

In response to the report, Caterpillar said it was just one part of the company’s business, and that it is not trying to skirt U.S. tax laws. The company noted that its effective income tax rate averages about 29 percent, one of the highest for a U.S. multinational manufacturing company.

“Caterpillar takes very seriously its obligations to follow tax law and pay what it owes,” said Julie Lagacy, the company’s vice president overseeing the financial services division. “Caterpillar’s philosophy is that our business structure drives our tax structure. We comply with tax laws enacted by Congress, by the states and by all of the many jurisdictions in which we conduct business.”

The report found that in 1999, Caterpillar paid $55 million to develop a tax strategy that allowed it to report most of its profits for the sale of equipment parts under a wholly owned Swiss subsidiary, where it would be hit by just a 4 to 6 percent tax rate.

The vast bulk of the company’s work researching, manufacturing and storing parts continued to happen on U.S. soil, but 85 percent of the profits from that work were found in Switzerland.

The arrangement remains in place, according to the Senate report, and the company reaps roughly $300 million in tax savings a year from it.

Before the 1999 restructuring, the company reported at least 85 percent of its parts profits in the United States.

Monday’s report marks the latest in a long-running campaign by Levin to place heat on large corporations looking to minimize their tax bill, and the financial institutions that make it possible.

Levin has previously dissected the offshore tax maneuverings of Apple and Microsoft, and has pressured a number of large Swiss banks that entice companies with secrecy and lower tax bills.

Levin billed the latest report as evidence of how widespread the practice is.

Arizona Sen. John McCain John Sidney McCainMomentum growing among Republicans for Supreme Court vote before Election Day McConnell urges GOP senators to 'keep your powder dry' on Supreme Court vacancy McSally says current Senate should vote on Trump nominee MORE, the top Republican on Levin’s panel, has co-signed on to many of Levin’s past findings, but he did not endorse the Caterpillar report.

Levin said the two senators differed on its conclusions.

Levin said staff for both members worked on the investigation; a McCain spokesman declined to detail the senator’s specific concerns with the document.

Top executives for Caterpillar and PricewaterhouseCoopers, which structured the tax arrangement, are slated to testifyTuesday before Levin’s panel, the latest in a series of corporate grillings.

McCain will attend Tuesday’s hearing.

The report emphasized how little parts work was actually done by Caterpillar in Switzerland, even though the lion’s share of profits were reported in that country.

For example, of the 8,300 company employees working on parts, 4,900 are based in the United States. Just 65 parts employees work in Switzerland, and less than 0.5 percent of the company’s workforce is based there.

The U.S. is also home to 54 manufacturing facilities and 10 warehouses for parts. Switzerland does not have any.

The company was able to report the bulk of its parts profits in Switzerland thanks to the 1999 restructuring. Under the new arrangement, Caterpillar agreed to transfer the rights to most of its parts profit to the Swiss subsidiary. The Swiss subsidiary would handle the sales of parts to Caterpillar’s non-U.S. dealers, and pay Caterpillar a royalty equal to 15 percent of the profits as part of the arrangement.

In the process, the company agreed to continue to perform the “core business functions” of that parts division in the U.S. in exchange for a small service fee.

In essence, Levin’s report argues that Caterpillar’s restructuring did almost nothing to alter the company’s operations, except for the fact that its most profitable division would now see those profits taxed at a much lower rate.

“Did anything change in the real world? Did anything change in its operations?” he asked. “The answer is no.”

The report called on the IRS to cast a closer look on such arrangements, and to question whether there is actual economic substance to the moves beyond lowering a tax bill — as required by law. Levin was critical of the IRS’s handling of this, and the ongoing arrangement could still be audited by the tax agency.

“In general, I’d say they’ve not been effective,” he said.

— This story was updated at 5:37 p.m. with a response from Caterpillar.