Pilot CEO says he was unaware of fraud, encourages carriers not to sue

By James Jaillet on

pilot signPilot Flying J CEO Jimmy Haslam says he “absolutely did not” know about the ongoing fuel rebate withholding scheme the company allegedly engaged in for years prior to the April 15 raid of the company’s headquarters by the FBI.

Haslam spoke today to an audience of several hundred fleet and industry representatives at the 2013 Scopelitis Transportation Seminar in Indianapolis, where he gave a brief address before being asked a series of questions by American Trucking Associations President Bill Graves.

Graves asked Haslam directly whether he knew about the scheme, saying that points in the federal affidavit released April 22 indicate Haslam may have known about the alleged defrauding of trucking companies.

Haslam said he “was absolutely not aware” of the skewing of manual rebate adjustments, but said that of the 5,000 trucking companies Pilot works with, 250 had some type of adjustment made. Roughly 400 companies were on a manually calculated rebate program, Haslam said.

The two main goals for Pilot now, he said, are to repay any money owed to trucking companies — with interest — and then work to regain the trust of trucking companies and the industry, Haslam said.

Pilot Flying J CEO Jimmy Haslam talks with fleet representatives, managers and executives at the 2013 Scopelitis Transportation Seminar May 16.

Pilot Flying J CEO Jimmy Haslam talks with fleet representatives, managers and executives at the 2013 Scopelitis Transportation Seminar May 16.

He also encouraged fleets to work directly with Pilot in seeking repayment owed, instead of filing a lawsuit. “You’ll get 100 percent of your dollars and you’ll get them quickly,” Haslam said, adding the company will have all money repaid by July.

A Scopelitis representative prior to Haslam’s speech said the law firm — which represents about 5,000 trucking companies, too — is recommending to its clients to take a wait-and-see approach to filing lawsuits, and that suing may not be the best route. In a letter to its members earlier this month, ATA also did not recommend litigation as, necessarily, the appropriate course of action, but instead said it would monitor the situation to determine the best course for ATA members.

Haslam said since the raid in April and uncovering of the affidavit, the truck stop chain has “zeroed in on” the 250 companies with adjusted calculations to ensure they receive repayment and interest owed. Haslam said he’s been on the ground, being part of the negotiations with carriers.

After they finish working with those 250 carriers, Haslam said he and Pilot will perform an audit on all 5,000 of its contracts to ensure no customers are owed any rebate funds.

Moreover, all customers will be removed from manual rebate calculations after June of this year, Haslam said. “We’re committed to righting all of the wrongs.”

The company has also worked closely with its banks and the companies it has oil contracts with, and both its fuel supply and lending institution are in good standing, Haslam said.

The company has seen since the middle of April a small downturn in sales, but this week, sales have actually picked up.

Addressing concerns from Graves over future preventive measures, Haslam said he hopes there’s “a definite change in the culture” of his sales team. He also said that with the end of manual rebate calculations and the hiring of a compliance officer, concerns of the rebate withholding resurfacing should be mitigated.

Haslam pointed to the company’s doubling in size in the last five years as part of the problem. “The proper checks and balances” for the growth were not in place, Haslam said.

He also said the company has been working diligently and will continue to do so mending relationships with its customers and the industry as a whole. Pilot extends to its customers each week about $500 million of credit, Haslam said, and at any given time the company has in reserve between 60 and 70 million gallons of fuel, which is worth about $250 million. Both, he added, he sees as a sign the company cares about the industry’s wellbeing, he says.

More to that point, Haslam said, the company is currently investing tens of millions in renovating its truck stop showers and bathrooms. Also, by the end of the year, Pilot will be the first truck stop chain to have diesel exhaust fluid at every diesel lane at every one of its locations, Haslam said. The company’s also working with Clean Energy to build 150 “strategically located” liquefied natural gas lanes.

James Jaillet

James Jaillet is the News Editor for CCJ and Overdrive. Reach him at jjaillet@randallreilly.com.

14 comments
Whale03
Whale03

They should lower their price by the rebate amount.  They can not be trusted to manage a rebate program. 

Whale03
Whale03

Talk is cheap. He needs to shut up and pay up. Seriously. 

Whale03
Whale03

He needs to shut up and pay up. Seriously. 

EdLee1
EdLee1

According to the affidavit not only did he know he encouraged it. I guess he figures we can't read or will forget.

DannyMurdock
DannyMurdock

First the CEO should be fired for not doing a good job.For what they get paid he should know it all.Then let the individual companies determine if they want refunds with interest or sue.

clem591
clem591

I would say sue the hell out of them don't forget to ask for legal fees and punitive for the damage they have done, we have started boycotting flying J and Pilot.. Where were the regulators, oh they were lined up at my door. 

All owner opps
All owner opps

Are the companies going to pass this "refund" on to the owner/operators? So many companies are stealing from us and we don't have the ATA to come in and get a refund for us. this is just proof that the system is flawed and the real losers are the drivers and small business owners. 

TrophyTransport
TrophyTransport

I believe that this is systemic issue within the Pilot Flying J organization. I have had in place for years a "No Buy Order" in regards to this corporation. As a former driver many years ago, Pilot always represented to me the worst of the Truck Stop approach to our well being. They are always on the front line of any new "Gimmick" fees that can be brought on board. I have personally not been injured by them, however they were never interested in discussing any discounts with my small fleet of 16 trucks. Petro / TA on the other hand were more than generous in their discounting, and are not too big to be bothered with the "Little Guy". I wish all the Carriers involved the best in their attempts to get things straightened out. I would also urge them to let P/FJ straighten it out directly as Lawyers would probably end in a lesser return. Good Luck all.

MYOUNG
MYOUNG

I have owned a trucking company for 17 years.  Yes, they did wrong, but I seriously believe they want to correct this situation.  My trucking company is a customer of FJ and Pilot and I am glad we have those options for my drivers and fuel.  They are clean, available where we need them, and (mostly) good to my drivers.  I fear if lawsuits are filed, FJ and Pilot will go out of business and, think about it, what would we (the trucking industry) do?   I for one am not going to file a lawsuit and I am going to give them an opportunity to make this right.  The only intity to win in a lawsuit is the lawyer.  We need FJ and Pilot.  After this audit, I believe they have had their hat handed to them, which if they are smart, they will remember why and who got them to where they are. 

BarbRRB
BarbRRB

Pay the companies what is owed to them along with interest and time involved that these companies put out to prove monies owed. Fine PFJ for their wrongdoing. CEO knew or not, this is his job. He gets paid the big bucks to be responsible.

Snowball
Snowball

If Jimmy thinks we are all so stupid to believe he was unaware of the Hundreds of Millions of dollars that have been reported to have been stolen, then he is just another greedy, lying rich dude that needs to be taken down.  These massively rich folks think that the rest of us who have made them rich are easily fooled by their words.  This is another company that will be "Too Big to Fail" and the government won't punish them nearly as bad as the IRS punishes the little guy when he/she doesn't pay to the Federal Reserve Collection Agency (IRS) what they have legislatively been given permission to steal from us.  Once more the rich get richer by doing more and more evil while the rest of us who try to do it the right way gets the shaft.  Jimmy - go watch your cheerleaders and count the touchdowns, cause your organization has lost a tremendous amount of credibility.

Cliff Downing
Cliff Downing

I think that PFJ should give back money owed, with interest, to those carriers.  Then, after doing so, we can start to see the lawsuits fly regarding how that money was not passed along, by the respective carriers, to their leased on O/O.  This is not going to die very soon.

DannyMurdock
DannyMurdock

 @All owner opps May end up like the health insurance deal.The new regs make the insurance providers give back when they pay out less than expected.Since I carry individual health insurance I got a refund, a few hundred dollars.Since most people do not know refunds exist it seems the companies pocket 100% even though employees contribute to the premiums.

crcker636
crcker636

do anyone know how  to contract to see if your company is on the list to be paid



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