The Trucker May 15-31, 2013 : Page 1

www . thetrucker . com m ay 15-31, 2013 V ol . 26, N o . 10 Pilot Flying J rebate saga continues to play out; CEO seeks to repair image marred by raid, allegations When Sammons Trucking owner-operator Jason Harte topped a slight hill on I-80 in Wyoming last summer, he saw a cloud of dust and knew he was coming upon an accident. But what the 2012 Goodyear Highway Hero came upon was one of the most horrific acci-dents he’d ever witnessed. Page 8 Quick rescue Courtesy: JASON HARTE CDL rule change .................... 3 Leathers’ testimony ............... 4 Obama taps DOT chief ......... 6 ART Captain Klang .............. 12 Tonnage up slightly .............. 21 Life on the Road .................. 21 Regional Rewind ................. 29 New Yokohama plant ........... 35 Around the Bend ................. 45 Prime Performers ................ 47 Eastbound & Down .............. 50 Truck Stop ........................... 53 Navigating the news It has all the intrigue of a soap opera. It is perhaps, in reality, trucking’s version of “As the World Turns.” Something akin to “As the Pump Turns.” Without a doubt, the plot is there: A raid on the nation’s largest provider of diesel fuel to the com-mercial vehicle industry. The accusations are there: The feds say the pro-vider cheated an undetermined number of truck-ing companies by not paying appropriate rebates and that the boss knew all about it; the boss says he knew nothing and has launched a PR campaign of his own to repair what has become a damaged image, including promises to pay every penny of what might be owed. The viewers are there: trucking stakeholders, the media and probably even the general public constantly scan the airwaves, print and electronic media for the latest news about the case. It all began April 15 when the Federal Bureau of Investigation and the Internal Revenue Service jointly descended on the Knoxville, Tenn., head-quarters of Pilot Flying J with warrants backed by affidavits filed in federal court. Scan code to read entire coverage of Pilot Flying J L yndon F inney editor@thetrucker.com five star drivers deserve five star careers Safety Stability Integrity Respect Driver Satisfaction One day later, Pilot Flying J / gettag.mobi CEO Jimmy http:/ Haslam, who is also owner of the National Foot-ball League’s Cleveland Browns and the brother of Tennessee Gov. Bill Haslam, said the company didn’t know a lot and that the federal probe “ap-pears to be centered on a very insignificant num-ber of customers and the application of rebates.” This apparently caused the federal government to unseal the affidavits, which alleged that mem-bers of the company’s sales force preyed on small-S ee P ilot on P 14 m Get the free mobile app at Pilot Flying J CEO Jimmy Haslam has appeared before the media several times to make state-ments since allegations broke that his company conducted a scheme to not pay thousands of dol-lars of rebates owed to trucking companies based on fuel purchases. Haslam has never claimed his company is completely innocent, but has said the investigation launched by the FBI and IRS involves a narrow part of the company, the nation’s largest provider of diesel fuel to the commercial vehicle industry. Associated Press: MICHAEL PATRICK/ Knoxville News Sentinel Interstate Distributor believes good, honest communication helps drivers feel they are truly part of the team. Validating that principle is the fact that Don Zunino and Bob Stewart have invested a combined 56 years as drivers there. Following Page 30 Five Star Fleets Secure Simply Enjoy career security and sa�sfac�on with an industry leader – Celadon. Receive alerts about exci�ng driving opportuni�es! Text “CELADON” to 96362 now. Na�onal Long Haul: (888) 805-0076 www.DriveCeladon.com Get started today: Recruiters ready to take your call 7 days a week!

Pilot Flying J Rebate Saga Continues To Play Out; CEO Seeks To Repair Image Marred By Raid, Allegations

Lyndon Finney

It has all the intrigue of a soap opera. It is perhaps, in reality, trucking’s version of “As the World Turns.” Something akin to “As the Pump Turns.” Without a doubt, the plot is there: A raid on the nation’s largest provider of diesel fuel to the commercial vehicle industry. The accusations are there: The feds say the provider cheated an undetermined number of trucking companies by not paying appropriate rebates and that the boss knew all about it; the boss says he knew nothing and has launched a PR campaign of his own to repair what has become a damaged image, including promises to pay every penny of what might be owed. The viewers are there: trucking stakeholders, the media and probably even the general public constantly scan the airwaves, print and electronic media for the latest news about the case. It all began April 15 when the Federal Bureau of Investigation and the Internal Revenue Service jointly descended on the Knoxville, Tenn., headquarters of Pilot Flying J with warrants backed by affidavits filed in federal court. One day later, Pilot Flying J CEO Jimmy Haslam, who is also owner of the National Football League’s Cleveland Browns and the brother of Tennessee Gov. Bill Haslam, said the company didn’t know a lot and that the federal probe “appears to be centered on a very insignificant number of customers and the application of rebates.” This apparently caused the federal government to unseal the affidavits, which alleged that members of the company’s sales force preyed on smaller trucking companies by reducing the amount of rebates they were owed for buying certain amounts of fuel. The affidavit included a statement by a Pilot Flying J employee identified only as a confidential source who claimed that the rebate scheme was discussed during sales meetings attended by Haslam and Pilot Flying J President Mark Hazelwood. Even after the lengthy affidavit, which detailed numerous meetings — many recorded — at which the alleged scheme was discussed, Haslam continued to downplay the probe during one of several news conferences or public speeches he’s made since April 15. “It still appears to us that this investigation is focused on a very narrow band of a very large company,” he told reporters April 19. But he readily admitted that the affidavit didn’t “present a very flattering picture of our company and was not representative of what our company is about.” Some trucking company executives were quick to express outrage at the alleged scheme, among them a former chairman of the American Trucking Associations. “Until today, I considered Jimmy Haslam a friend,” Tommy Hodges, owner of Shelbyville, Tenn.-based Titan Transfer Inc., told the Nashville Tennessean. “But when someone you count as a friend lets you down, it kind of puts a knot in your stomach. We’re still buying fuel from them today, but we’re looking at other options.” Hodges said his company, which operates 375 over-the-road trucks, is among the victims of the alleged scam, in which trucking firms were paid less than promised in rebates they were supposed to be earning by sending their trucks to Pilot Flying J locations for refueling. “We feel like they got us,” Hodges told The Tennessean. “We fit the profile of exactly what they were doing. We were in the rebate program, and we always had a tough time reconciling the checks we were getting with our records of fuel purchases. “Sometimes when we were expecting $50,000, we would get only $35,000, and when we would call, we never got a straight answer about the discrepancy. When we would get a check, nothing would come with it explaining it.” Hodges said his company finally went to Pilot’s president and they “just started giving us the discount right at the pump.” It was a familiar story for Brad Morehouse, president of W.N. Morehouse Truck Line Inc. of Omaha, Neb., one of the companies named as a victim in FBI reports. “We caught them, and they finally put us on a discount right at the pump,” Morehouse said. “It’s all disgraceful. It was very difficult to track the rebates because they had different prices at different truck stops. We trusted them, and now, if they’re guilty, I hope they all go to jail.” Since the April 15 raid, the ATA has remained silent about the probe. The federation didn’t include media reports of the investigation in its daily digest e-mailed to trucking stakeholders. Finally, in the May 6 edition of Transport Topics, a weekly trade publication published by a division of the ATA, the federation said in a letter to its membership that it would closely follow both Pilot’s internal investigation and the ongoing federal investigation. “In addition, ATA will monitor any civil litigation that emerges from these allegations, with the aim of ensuring that any class-based settlement of claims adequately protects motor carrier interests, not simply lining plaintiffs’ attorneys’ pockets,” the letter said. “For ATA, motor carrier interests are paramount. As such, ATA encourages affected members who have any concerns to review their accounts with Pilot and bring any issues promptly to their attention.” In addition to the federal probe, Pilot Flying J is facing several class action suits that have been filed against the company. Pilot Flying J has initiated its own internal investigation and its board has appointed Reid Weingarten, listed earlier this year by the National Law Journal as one of the nation’s 100 most influential lawyers, to serve as a “special independent counsel.” The board said that Weingarten will lead,Oversee and validate an internal investigation of the allegations. The board announcement also named Brad Martin, retired chairman and CEO of Saks Inc., as the head of a special committee of the board that will work with Weingarten and receive his eventual report. Haslam, meanwhile, continued to pledge to get to the bottom of the situation and said he’s visiting trucking companies all over the U.S. He said he continues to be “embarrassed” about the investigation. “I’ve said this very publicly and privately that, if in fact we did short change anyone on any rebate program that we would write them a check, with interest, and pay them back,” Haslam said May 7 during a speech at the Northeast Ohio National Football Foundation Awards Banquet in Westlake, Ohio. “We have in fact written several checks since we started the investigation. I would like for that internal audit group to work things out as quickly as possible. I think you all know I’m very impatient.The important thing is, as I’ve told all trucking companies, I probably talked to literally 250-300 trucking companies in the last three weeks.” He said he would be visiting more trucking companies in the day immediately after the banquet before returning to Ohio for the Brown’s minicamp.

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