In only his second press conference since an investigation into Pilot Flying J’s fuel rebate program was launched earlier this year, company CEO James “Jimmy” Haslam III says there is progress in “making things right” with the trucking companies that may not have received the correct rebate.
In a 12-minute press conference on Monday, Sept. 30, Haslam updated the media on the progress of the company’s five-point plan. The plan was implemented after federal investigators raided the company’s headquarters in Knoxville, Tenn., on April 15 over an alleged rebate scam.
The investigation covers rebates from 2005 until April 2013.
“We have been highly focused on what I said we would do that day and that is making things right with the trucking companies,” Haslam said. “We have come a long way toward doing that.”
He said a 25-person internal audit team has been working around the clock since April 22 to review the approximately 400 trucking companies that had manual rebate arrangements with Pilot.
“In nine weeks they went through all 400 companies – there were not problems with all of the companies,” Haslam said.
By July 1, Haslam said every trucking company that had a manual rebate agreement with Pilot had been contacted and were sent checks for the discrepancy, plus interest, if owed money.
He said that Pilot Flying J has completely eliminated the manual rebate process, except for 20 companies, who “needed to stay on those manual transactions for a certain amount of time.”
According to Haslam, those 20 companies will transition off the manual rebate process by November 1 at the latest.
Until those companies make the transition in November, Haslam said Pilot has the proper checks and balances in place to make sure nothing “inappropriate” happens with those companies.
In addition to reviewing the manual rebate program, Haslam said in the press conference that Pilot has gone back and reviewed and put in writing every single deal Pilot has with its trucking company customers.
“That’s almost 5,000 different deals. And to understand the complexity of doing this, you don’t have one deal for all of Pilot Flying J with XYZ trucking company,” Haslam said. “Depending on the size of that trucking company, we may have a global deal, but then we may have individual site deals at 300 of our 600 sites in the U.S. and Canada.”
Haslam said an advisory committee has been appointed to select a compliance officer and establish a compliance office, which the company did not have before the criminal investigation.
Despite economic conditions and the criminal investigation, Haslam said the company “continues to do well” and will open 25 new locations throughout the U.S. and Canada.
So far, seven Pilot employees have pleaded guilty to federal charges stemming from their roles in the alleged scam and dozens of lawsuits have been filed in state and federal court by trucking companies claiming they have been defrauded out of money they are owed.
“First of all and I think this goes without saying, this has been a very humbling, very embarrassing time for myself, for our family and for Pilot Flying J,” Haslam said.
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