NASHVILLE, Tenn.: Browns owner Jimmy Haslam on Monday acknowledged a massive hit to the credibility of the family-owned Pilot Flying J truck stop chain following FBI allegations of widespread fraud affecting customers at the country’s largest diesel retailer.
Haslam announced at the company’s Knoxville headquarters that he has suspended several members of the sales team after an affidavit filed in federal court disclosed secretly recorded conversations in which Pilot staff boasted about taking advantage of less-sophisticated trucking company customers.
“I, more than anybody, understand the damage that’s been done to our reputation, our brand and our relationships in the trucking community,” Haslam said. “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.”
Privately held Pilot Flying J posted $29 billion in revenues in 2012. Haslam, who bought the Browns last year, is the brother of Tennessee Gov. Bill Haslam, who maintains an undisclosed stake in the company founded by their father with a single gas station in 1958.
Jimmy Haslam didn’t name the people placed on administrative leave, specify how many have been suspended or whether they are still being paid. He gave a statement to reporters but refused to take questions.
Haslam has denied wrongdoing and dismissed suggestions he step aside from running the company or the Browns while the investigation is under way.
The recordings made for the FBI investigation show that leaders of the Pilot sales team derided some clients as unsophisticated, lazy and undeserving of rebates they had negotiated when signing a deal to buy fuel from Pilot. The affidavit indicates millions of dollars were unfairly withheld.
Haslam said while the company isn’t judging the guilt or innocence of the employees placed on leave, “We cannot ignore the content of the federal affidavit released last Thursday evening.”
Haslam said internal auditors are converging at company headquarters to review all 3,300 contracts with trucking customers and to “proactively address any miscalculations.” He said he also planned to travel to meet with officials at trucking companies who were specifically mentioned in the FBI transcripts.
The company will also create the position of chief compliance officer, convert all payments to electronic billing and create and hire an independent special investigator to handle all inquiries related to the federal investigation.
Haslam said the company faces a tough path toward rebuilding its relationships with customers.