Cleveland Browns owner and Pilot Flying J president Jimmy Haslam addressed an FBI investigation looking into his company's business practices Thursday. Haslam accepted responsibility and told media at a press conference that he and Pilot would investigate the fraud allegations they are facing.
Haslam said he and fellow Pilot board members agreed to hire an outside investigator to look into the company. The investigator will report directly to the Pilot board of directors, and not Haslam. He wouldn't name the investigator, saying they requested anonymity for the time being due to "a couple of other projects they're involved in." He did offer a resounding endorsement of their qualifications.
"This will be somebody of national reputation," Haslam said, "who has experience in the Justice Department and who is well known in legal service circles and whose credibility is beyond reproach."
Haslam said he hopes to make an announcement by the end of the week, and that the outside investigation would begin next week.
The tone of the press conference was in stark contrast to Haslam's comments last Friday, when he responded to inquiries on whether or not he would step down from Pilot by saying, "I thought to myself, 'Why would I do that?' Candidly, I haven't done anything wrong.'' On Monday, he showed much more humility.
"I, more than anybody, understand the damage that's been done to our reputation, our brand and our reputation in the trucking community," said Haslam. "Eight days ago, I think we had the best relationships, the best trust, in the trucking industry, and we now have the worst. I understand that. I accept responsibility for it, and we're going to work -- we went to work Saturday, I guess you could say, starting to rebuild those relationships -- and I understand we have a long way to go."
In addition to bringing in the outside investigator, Haslam announced a four-point plan to get to the bottom of the allegations. He said Pilot's internal audit team would look into the allegations against the company, examining the "entire direct bill process," and he is placing "several members of our direct sales team" on administrative leave until the investigation is completed. Pilot will also "do away with manual transactions" when working with customers, hoping to complete the process by June 30, and Haslam said the company will hire a chief compliance officer within the next 30 days.
Pilot Flying J is a national truck stop chain based in Knoxville, Tenn. FBI and IRS agents raided the company's corporate headquarters last week, confiscating personal computers, network servers and documents.
Pilot is being investigated by the FBI and IRS for withholding rebates and discounts on diesel fuel previously promised to customers. Pilot enters agreements with commercial trucking customers for fuel purchases, and to boost business, and the company provides special offers on said fuel in the form of the rebates and discounts. Pilot bills customers and extends them lines of credit, and the discounts are given in the form of rebate checks. Pilot has allegedly been billing customers, but failing to provide the rebate checks, boosting national profits and increasing sales commissions.
On Monday, Atlantic Coastal Carriers, a trucking company based out of Hazlehurst, Ga., filed a class-action lawsuit against Haslam, alleging the Browns' owner and his company of racketeering.
When Haslam was approved as new owner of the Browns last October, he explained how he ran Pilot, describing a decidedly hands-off approach:
"I had five people that reported to me at Pilot Flying J," Haslam said. "They're all smarter than I am, and they're all better at their role than I am, and we let them do their jobs. On the other hand, we question them, we push them, we challenge them, we hold them accountable."