Tennessee Gov. Bill Haslam has struggled almost from the start of his administration to fulfill a campaign pledge to avoid handling matters relating to Pilot Flying J, the family-owned truck stop chain run by his brother, Cleveland Browns owner Jimmy Haslam.
Now, an FBI investigation of alleged fraud by the sales staff at the nation’s largest diesel retailer has brought increased scrutiny of the company and raised more questions about links between the governor and Pilot. They include:
• A top political adviser to the governor who also is orchestrating Pilot’s public response to the Justice Department investigation.
• A current board member and part-owner of Pilot being appointed by the governor as the interim president of University of Memphis.
• A board member running the parent company of a mining firm that wants to extract coal from public land in Tennessee.
Haslam’s connections to Pilot were a central theme in the 2010 Republican primary and general election. Opponents attacked Haslam for refusing to disclose his personal ownership stake in the company, hammered the company for price gouging settlements after gas shortages caused by a hurricane, and derided the candidate as a billionaire oil man who would do the bidding of his father, Pilot founder Jim Haslam, and brother, Jimmy, the company’s CEO, if elected.
The Haslam campaign rebutted those attacks largely by citing Pilot’s “history of operating with integrity” and by criticizing “smears about a home-grown successful company.” Those blanket dismissals will be harder to make in the future as the company grapples with fallout from the raid by federal agents and subsequent guilty pleas of five Pilot employees.
Haslam’s chief campaign strategist was Tom Ingram, who has remained a paid adviser since the election while orchestrating Pilot’s public response to the FBI raid.
Ingram, who also lobbies state government on behalf of other private clients such as the mining company seeking to extract coal from public lands, has said he doesn’t lobby the governor directly. He shrugged off a reporter’s question about whether he will stop his outside activities on behalf of Pilot once he’s brought on to Haslam’s re-election campaign payroll this summer.
“Of course not,” he said. “Why would I?”
The governor also declared himself unconcerned about Ingram’s other roles, including his position with Pilot.
“That’s just how life works a lot of time,” Haslam said recently. “Look, there’s a whole lot of lobbyists who represent a whole lot of different people.”
Dick Williams, who chairs Common Cause Tennessee, said the governor’s deep connections to the business world — and his refusal to make full disclosures — raise questions about his impartiality.
“He just has so many relationships, business agreements and investments that it causes a serious potential for a conflict of interest,” Williams said. “It’s just hard to untangle that.”
Jimmy Haslam has been doing furious damage control since the April 15 raid on company headquarters and the subsequent release of an FBI affidavit with transcripts of secretly recorded conversations among the sales staff. Federal agents say the conversations outline a scheme to defraud trucking companies of fuel rebates. Five members of the sales staff have pleaded guilty to mail fraud and are cooperating with prosecutors, as are two further current and former Pilot staffers.
The governor has maintained that he has had no active role in Pilot since leaving the company to run for Knoxville mayor in 2003. But his family continues to own a majority share in the privately held company with annual revenues of $31 billion, and Haslam has kept his personal share outside of a blind trust established for his other investments.
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