'Lessons Learned on the Field'
Haslam delivers keynote to student athletes, but also addresses Pilot Flying J's fumble
WESTLAKE, Ohio -- Sports is often a metaphor for business. And business is sometimes played like a sport. This comparison never seemed truer than Tuesday night when Pilot Flying J CEO and Cleveland Browns owner Jimmy Haslam delivered the keynote speech at the 2013 Northeastern Ohio Chapter of the National Football Foundation's 25th annual banquet in Westlake, Ohio.
He was there to talk about football, and he did, but of course, he also addressed the federal investigation into the truckstop chain's alleged fraudulent fuel rebates that began with a raid on the company's Knoxville, Tenn., headquarters last month. While his remarks were delivered as the owner of the Browns, they still offered insight into the mind of the CEO of Pilot Flying J.
"Most of the lessons I've learned in life came through athletics, and particularly, football," Haslam told the student athletes, according to a report on the team's website. "The great thing about football is, it's the ultimate team sport. No matter what position you play, if you don't do your job, you're going to let the team down. Candidly, that's what life is. That's what business is. You've got to count on everybody on your team, and whether you play right guard or quarterback, nose man or free safety, they're all important. Those lessons you've learned on the field, whether in college or high school, are going to go a long way toward helping you in life."
And while he discussed the draft, the team and its prospects, he focused on the scandal.
"I thought it was important for tonight, which is the first time that I've been back for any time period since the draft, to spend time to talk about what has happened since April 15," he said. "Let me start by saying this--I apologize to the city of Cleveland, northeastern Ohio and all Browns fans because the last thing we ever wanted to do as a new owner was to detract from football and the Browns and just what a great football area this is."
He continued, "Let me just go back to April 15 when the FBI came into our building and took a lot of information. Candidly, we were confused and didn't understand really exactly what was going on. We had heard it had something to do with rebates we paid to trucking companies.
"On April 18, four days later, they released their affidavit that they used to get a search warrant. In it, I guess it was good news and bad news. The good news was, we understood what the issue was. The bad news, and it was really sickening to me, candidly, was the apparent behavior of some of our sales people; behavior that's not characteristic of how the 20,000 employees of [Pilot Flying J] act and behave towards anyone. We don't talk that way. We don't act that way. Candidly, it was behavior that was particularly improper towards customers. ... [I] was literally almost sick to my stomach, candidly. No. 1, it was embarrassing, and No. 2, it's not how we act."
He detailed the file steps the company is taking to address the situation.
"No. 1, we were going to pull our entire internal audit team. You have to remember, we operate over 600 truckstops spread out over the country and handle a tremendous amount of cash. Our internal audit team for the most part is focused on our stores. We pulled them back in and they are going to do an internal audit story. I've said this very publicly and privately that, if in fact we did shortchange anyone on any rebate program that we would write them a check, with interest, and pay them back. We have, in fact, written several checks since we started the investigation. ... I'd like to wrap things up by the end of the month, but if it takes to early June or early July, we are going to get the numbers right.
"The second thing we've done is we've suspended several members of our sales team. I think that was absolutely the proper thing to do given the circumstances."
Third, he said that the manual rebate process will be automated ny June 30.
Fourth, the company is installing a compliance officer who will report to general counsel, who then reports to Haslam. That "will help us put those checks and balances in place. We have begun talking to people with great experience in that area, and I feel confident here again by June 30. The key is to get the right person or people that we'll have that in place."
"The fifth thing and this was announced last week, is to appoint a special independent counsel. ... The individual's name is Reid Weingarten. ... Remember, we are a private company, not a public company, and this is something we don't have to do. I think it's just so important internally and externally that we get this right that we've not only agreed to do it, we've volunteered to do it on our own. I think his investigation will probably take several months."
He concluded, "Once again, [I'm] very embarrassed. Pilot Flying J has been in business, starting with Pilot, now Pilot Flying J, now 54 years. It's a family business as you all know and that's not how we act and how we do things. I think it's a company that has had really as good a reputation as anyone in the business. That reputation has been tarnished and ...we're going to begin to rebuild our reputation, and we understand that it's going to take a long time to do. But, we are big boys, we've been in this business for 54 years and I hope we are in business another 54 years."