Embattled truck stop CEO and Cleveland Browns owner James Haslam took the blame for a lack of oversight in his fuel-sales rebate program, which is the subject of a federal investigation and multiple class-action lawsuits, during a speech Thursday morning at the Hilton Indianapolis Hotel.
Haslam’s company, Pilot Flying J of Knoxville, Tenn., has doubled in size in the past five years but didn’t have a chief compliance officer, he told the audience of trucking industry executives gathered in downtown Indianapolis for a conference presented by locally based law firm Scopelitis Garvin Light Hanson & Feary.
“I take the blame for not having that,” Haslam said, adding that hiring a compliance chief is one of the steps he will take to rectify the situation, in which he said it appears—so far—that about 250 firms may have been short-changed on their monthly rebates. Those rebates can add up to tens of thousands of dollars.
The rebate scheme affects small trucking firms, in which the monthly discount is manually calculated and passed along to drivers who own their own trucks. Out of Pilot Flying J’s 5,000 customers, about 400 were in the manual rebate program, Haslam said. He plans to bring that program to an end.
Asked whether he had any personal knowledge of the rebate scheme, Haslam said, “Absolutely not.” Haslam said his audit team is scouring accounts and reimbursing trucking companies with interest.
The fact that Haslam hasn’t been muzzled by his legal advisors is unusual, Scopelitis partner Greg Feary said. “That would be the standard approach, but not his approach.”
The Scopelitis firm represents trucking companies in a variety of matters, but so far sees no reason to pursue a lawsuit against Pilot Flying J.
The biennial Scopelitis Transportation Seminar draws about 400 industry executives, giving Haslam a platform to not only defend himself but to remind clients of what Pilot Flying J means to the industry, which has a large presence in Indianapolis.
Pilot Flying J extends about $500 million a month in interest-free credit to trucking firms, Haslam said. The company is spending $75 million to renovate showers, restrooms and fuel lanes at its more than 500 stops across the United States and Canada, he said.
Montana trucking CEO Ray Kuntz said his 700-truck firm, Watkins & Shepard Trucking Inc., was not shorted, and he’s glad Pilot Flying J is still in business. “I was very impressed with the honesty,” he said after Haslam’s talk, during which he answered select, pre-screened questions.
Pilot Flying J is a “very integral part to both our company and the industry,” Kuntz said. “Hopefully he can restore the trust he says he’s going to try to do.”
Haslam’s company, Pilot, bought the Flying J travel centers out of bankruptcy in 2010, creating the largest chain of truck stops in the country.