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CEO Jimmy Haslam: Pilot Flying J will emerge an 'even better company'

KNOXVILLE, Tenn. — Pilot Flying J CEO Jimmy Haslam said Monday he was confident that the company would emerge from the current investigation of alleged fraud by its sales staff “an even better company, a company made up of people committed to providing the best service in our industry to America’s professional drivers and the motoring public.”

Haslam made the comment at company headquarters during a press briefing designed to provide an update on actions the company has taken since the April 15 raid on company headquarters by federal agents and the subsequent release of an FBI affidavit with transcripts of secretly recorded conversations among the sales staff, who have been accused of shorting customers on rebates.

Indeed, a company investigation revealed that action did occur and customers have been sent rebates owed them, plus interest, Haslam, who did not take questions, said.

“Since April 15, we have done our best to investigate the allegations made against some members of our diesel fuel sales team to identify any wrongdoing and to assure our customers that we will not tolerate that kind of behavior anywhere in our company and we will make right 100 percent any errors we discover,” he told reporters.

Although he said he could not be specific, but could generalize that “we are finding discrepancies in a relatively small number of our almost 7,000 diesel fuel sales customer accounts audited, and that the amount we’ve paid to correct those discrepancies represents a very small percentage of our overall diesel fuel sales.”

He said the company’s field audit team, which was brought to headquarters April 22 to investigate the federal allegations, had completed the review of all manual rebate accounts, notified almost every customer in whose account they found a discrepancy and sent those customers checks for the amount of the discrepancy plus interest.

“We are now finalizing our audit of all of our other diesel fuel accounts with any type of direct discount agreement from 2005 to date and expect to complete this process by the end of the year,” Haslam said.

“Additionally, lawyers for some of our customers have worked with our lawyers to propose to a federal court in Arkansas a class action remedy to guarantee every one of our rebate and direct discount customers will receive 100 percent recovery plus interest on any shortfall in their accounts without any legal or other costs to the customer, if they so choose to participate in the class,” he added. “That agreement received preliminary approval from the federal judge in mid-July. We hope it will receive final approval in November.”

Haslam pointed out, however, the individual customers could choose whether or not to participate in the settlement,

“We believe it is a fair and just settlement and allows our customers to be made whole sooner rather than later,” Haslam said.

Several individual companies have filed suit against Pilot Flying J.

In other action, Haslam said:

The company was rebuilding its sales team, which now includes David Hughes, Steve Vanderink and Mike Hill, all senior members of the company’s staff. The company has placed almost every customer contract in writing and will continue to do so going forward with the goal to make certain every customer is intricately involved with what their individual contract says so that parties always know the exact expectation of each contract. Special Counsel Reid Weingarten and his team have a full investigation of the allegations under way and will make their report directly to the board upon its completion. Haslam said he did not know Weingarten and his team would complete their work or if the board will choose to make it public.
“I am incredibly proud of our 24,000-plus team members who absorbed the shock of the news of our current circumstances, immediately picked themselves up and went right back to work doing their jobs,” Haslam told reporters. “Despite the accusations swirling around in the weeks after April 15, our team members came to work every day with their heads held high, and, through their actions, showed that Pilot Flying J is a company that they believe in.”

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