Pilot Flying J

Pilot whitewash? No mention of fraud scandal in WSJ’s Jimmy Haslam feature

Wall Street Journal feature on Pilot Flying J CEO Jimmy Haslam is titled “How America’s Largest Truck Stop Owner Stays on the Right Path.” If you assumed the article would mention how Pilot recently fell off that path in a big way, you’d be mistaken.

Federal agents raided Pilot’s Knoxville headquarters in 2013 in an investigation into diesel rebate fraud. Secretly recorded conversations revealed members of the sales team deriding trucking company clients as unsophisticated and lazy. The company’s former president and more than a dozen members of the sales team were convicted of federal charges and Pilot paid $85 million to settle with most of the defrauded customers along with a  a $92 million penalty to the government.

Jimmy Haslam, who owns the NFL’s Cleveland Browns, wasn’t charged in the case and claimed he didn’t know about the wrongdoing. In the aftermath of the fraud scandal, the Haslam family sold a major share in the privately held company to Warren Buffett’s Berkshire Hathaway (which will grow to an 80% stake in 2023).

In the Wall Street Journal “Personal Board of Directors” feature about executives’ closest advisers, Haslam lists:

— Former U.S. Sen. Bob Corker (R-Chattanooga) a former college fraternity brother.

— Former Saks Inc. CEO R. Brad Martin, a member of the Pilot board since 1988.

— Former Walmart CEO Lee Scott, a Pilot board member since 2010.

— Steve Diggs, president and CEO of the Emerald Youth Foundation, a Christian nonprofit in Knoxville.

Haslam taps short-lived Pilot CEO for UT board

John Compton. (Photo credit: Gov. Haslam’s office)

Republican Gov. Bill Haslam has tapped a former CEO of the family-owned Pilot Flying J truck stop chain to the reconstituted board of the University of Tennessee.

Haslam nominated John Compton and nine others as nominees to the UT board on Monday. Compton ran Pilot for less than six months after Jimmy Haslam, the governor’s brother, stepped aside following his 2012 purchase of the NFL’s Cleveland Browns.

Less than six months later, Jimmy Haslam decided to come back to run the company. Compton, a former president of PepsiCo Inc., was shifted into a consulting role. In April 2013, federal agents descended on Pilot’s Knoxville headquarters amid widespread fraud perpetrated by the company’s sales department.

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Jury finds former Pilot Flying J president guilty of fraud, conspiracy and witness tampering

A federal jury Thursday convicted the former president Pilot Flying J, the nation’s largest diesel fuel retailer, in a plot to rip off truckers to boost both his own bottom line and that of the company, reports the News Sentinel.

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Warren Buffett’s company buying Pilot Flying J

Berkshire Hathaway Inc., better known as billionaire businessman Warren Buffett’s company, has struck a deal to buy a 38.6 percent equity stake in Pilot Flying J, the truck stop/gas station company owned by Tennessee’s Haslam family.

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TNDP chair: If Haslam runs for Senate, Pilot Flying J will be an issue

News release from Tennessee Democratic Party

Nashville, Tenn. (September 29, 2017) – Mary Mancini, chair of the Tennessee Democratic Party, released the following statement on Gov. Haslam considering running for the US Senate:

“Gov. Haslam’s family company, Pilot Flying J, has been embroiled in a fraud scandal since 2013 that has resulted in 10 indictments and $170 million in fines. To this day, Gov. Haslam has not had to answer for these crimes, but he has likely profited from them as he still holds an undisclosed stake in the company.

Nobody knows how much he owns or has profited because his very first executive order eliminated requirements for the governor and top aides to disclose how much they earn in outside income.
If the Governor decides to run for US Senate, we expect there will be considerably more scrutiny of his finances and his family’s business practices.”

Jimmy Haslam deposition kept under wraps

Pilot Flying J President Jimmy Haslam emerged Tuesday evening from a daylong deposition in a civil lawsuit over the firm’s alleged diesel fuel rebate scam with another denial of any role or knowledge of the fraud to which several subordinates have confessed.

Further from the News Sentinel:

Haslam, who also owns the NFL’s Cleveland Browns, was ordered by an Ohio judge to submit to questioning by attorneys representing three trucking

that Pilot struck with dozens of other such companies after a high-profile raid in April 2013 of the company’s headquarters in Knoxville and the resulting indictment of more than a dozen executives and employees, including former Pilot president Mark Hazelwood.

The deposition spanned eight hours and took place at a Pilot conference center in Alcoa. It was not public. Attorney Chip Cooper, who represents two of the trucking companies, said Haslam is shielding a transcript of the deposition from the public.

“Regrettably, we can’t discuss the substance of Mr. Haslam’s testimony today,” Cooper said. “We can’t discuss it because Mr. Haslam insisted that his testimony be sealed and therefore shielded from public view. We plan to address this with the court in Ohio, and we encourage the press to do the same.”

Both Haslam and his attorney A.B. Culvahouse issued a statement Tuesday evening lambasting the three trucking firms and vowing Haslam’s innocence. They did not address the shield request.

“Our client openly and truthfully answered their questions,” Culvahouse said. “This entire exercise today was nothing more than an effort by the plaintiffs to harass the company into a windfall settlement.”


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