New developments in this week's FBI and IRS raid on Pilot Flying J headquarters in Knoxville suggest that Jimmy Haslam, CEO of the company and brother of Tennessee Gov. Bill Haslam, was aware of rebate fraud taking place within the multibillion dollar truck stop company.
On Thursday, a 120-page FBI affidavit was released, including details of how Pilot Flying J sales representatives had been shorting customers on rebates guaranteed for diesel fuel sales. Since federal agents locked down the company's headquarters Monday, Jimmy Haslam, who is also owner of the Cleveland Browns, has maintained that his company is "built on its integrity" and added that "any willful wrongdoing" by employees of Pilot Flying J is intolerable.
Content within the affidavit suggests otherwise.
Here is a brief roundup of what's been reported so far, via the Knoxville News Sentinel:
Sales officials for Pilot Flying J would promise customers, often trucking companies with large accounts for diesel fuel, a rebate on their purchases. They would then charge a different price, relying on the customers being "too unsophisticated" to determine that their discounts were being changed in a way that benefitted Pilot.
Employees were trained on how to conduct fraudulent rebates. A jargon for the practice was adopted by workers, including phrases such as "cost-plussing," "manual rebates" and other vulgar terms.
The investigation was opened in 2011, although content in the affidavit suggests the activity was taking place well before then. After Monday's raid, federal officials acquired documents and computers, including the personal computer of Jimmy Haslam.
For a timeline summarizing the chronology of events, click here.
Bill Haslam, who was a former president of Pilot, is currently a shareholder in the company. This week, he told reporters in Nashville that he was not aware of any activity at the company that would have resulted in Monday's lockdown, adding that he had not been contacted by the FBI or legal authorities following the raid.
On Thursday, Haslam's press secretary, Dave Smith, said the governor continued to have "absolute faith in his brother's integrity."
Along with his work at Pilot and with the Cleveland Browns, Jimmy Haslam and his family are noted for being consistent backers of Republican political candidates in Tennessee. Jimmy Haslam is currently named as a member of the state finance committee for Sen. Lamar Alexander's 2014 campaign for re-election.
Jimmy Haslam is expected to make a statement at 4 p.m. today.