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RGA Elects New Chair Mired in Fraud Scandal

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14 Staffers Have Pled Guilty in Ongoing Federal Fraud Case Involving Haslam-Controlled Company

Desperate for a new leader amidst 2 stinging electoral defeats this month, the Republican Governors Association turned its leadership over once again to Tennessee Governor Bill Haslam, despite the governor’s ties to a swirling federal fraud trial.

Just last week, the Associated Press reported on an ‘infection of fraud’ at the Haslams’ company, Pilot Flying J:

“Federal prosecutors on Monday outlined their case against former Pilot Flying J executives and sales representatives as being the result of an “infection of fraud” at the truck stop chain controlled by the family of Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam.”

As Haslam takes over the chairmanship of the RGA, he will have to fend off headlines about the ongoing trial of four ex-executives charged in a diesel fuel rebate scam. Already, 14 staffers have pled guilty in the case.

Haslam follows in the footsteps of recent RGA leaders facing major ethical problems: 

“Republicans have enough of a challenge in 2018 defending 26 seats against strong Democratic challengers,” said DGA Communications Director Jared Leopold. “Now they’ve chosen a leader whose company is facing a massive federal fraud trial. That’s not a recipe for success when Republicans are on defense across the country.”



Pilot Flying J, Controlled by the Family of Gov. Bill Haslam and Jimmy Haslam, Agreed to Pay Ex-Executive’s Legal Bills in Federal Trial that Started October 31. According to the Associated Press, “The truck stop chain controlled by the family of Cleveland Browns owner Jimmy Haslam and Tennessee Gov. Bill Haslam has publicly distanced itself from former employees charged with defrauding customers. But court records show the board of Pilot Flying J has agreed to pay the ex-staffers legal bills. Pilot Flying J has been under scrutiny in recent years because of a diesel fuel rebate scam. Fourteen former staffers have pleaded guilty, while another four – including the company’s former president – are scheduled to go on trial on Oct. 31. The Knoxville News Sentinel reports that court records indicate a May 2013 ‘undertaking agreement’ in which Pilot agreed to cover attorneys’ fees and other expenses. They agreed to repay the money if they are convicted or lose on appeal.” [Associated Press, 10/18/17]

  • Knoxville News Sentinel Headline: Tape of subordinate accusing [Jimmy] Haslam, Hazelwood played in Pilot Flying J trial. According to the News Sentinel, “Pilot Flying J Chief Executive Officer Jimmy Haslam not only knew one of his vice presidents was ripping off truckers but ‘loved it,’ jurors heard a subordinate claim Tuesday in a secret recording. ‘He knew – absolutely,’ former Pilot Flying J vice president of sales John ‘Stick’ Freeman said of Haslam in a recording played for jurors in U.S. District Court in Chattanooga on Tuesday. Haslam has denied any knowledge of the fraud scheme and is not charged. After the day’s testimony, the company reissued a statement saying: ‘As we have said from the outset, Jimmy Haslam was not aware of any wrongdoing.’ A transcript of the recording was released by federal prosecutors shortly after the company was raided in April 2013. But this was the first time the recording had been heard in public. Freeman said in the recording – secretly made by subordinate Vincent Greco at the behest of the FBI and IRS Criminal Investigation Division – former Pilot Flying J president Mark Hazelwood also knew about the fraud.” [Knoxville News Sentinel, 11/14/17]
  • The FBI and IRS Had Been Investigating the Fraud Scheme Since 2011. According to the Knoxville News Sentinel, “The trial comes after an April 2013 raid at Pilot Flying J’s Knoxville headquarters that already has led to guilty pleas from more than a dozen of its executives and support staff. The FBI and the IRS Criminal Investigation Division had been investigating the fraud scheme since 2011, using moles who wore recording devices and sneaked agents records and information.” [Knoxville News Sentinel, 11/6/17]

Gov. Haslam Kept His Personal Share of Pilot Flying J Outside of a Blind Trust Established for His Other Investments. According to the Associated Press, “Bill Haslam has said he has not been involved with operating Pilot Flying J since he left the company to run for Knoxville mayor in 2003. But his family continues to own a majority share in the privately held company, and the governor has kept his personal share outside of a blind trust established for his other investments.” [Associated Press, 12/13/16]

  • In November 2017, Gov. Haslam was Asked if He was on the List of Potential Witnesses at the Federal Fraud Trial of Former Executives and Sales Representatives at the Truck Stop Chain Owned by His Family. According to the Associated Press, “Tennessee Gov. Bill Haslam (R) said Wednesday that he is not on the list of potential witnesses at the federal fraud trial of former executives and sales representatives at the truck stop chain owned by his family. Pilot Flying J was founded by the governor’s father, Jim Haslam, and is run by his brother, Cleveland Browns owner Jimmy Haslam. None of the Haslams have been charged in the investigation that has led to guilty pleas by more than a dozen former members of the Pilot sales team and to the ongoing trial of the four former Pilot employees, including its onetime president.” [Associated Press, 11/8/17]

Ever Since Sen. Corker Announced his Retirement, Brietbart News, Helmed by Steve Bannon, Highlighted the Federal Trial of Haslam’s Family-Owned Business. According to the Times Free Press, “Haslam said one of his reasons for staying is continuing to wrap up various initiatives in his remaining 15 months. Since Corker, a former Chattanooga mayor, announced his retirement on Sept. 26, the governor has been hammered by the arch-conservative website, Breitbart News, once again helmed by Trump’s former chief strategist Steve Bannon. The website has noted the upcoming fraud trial involving actions at the Haslam family-owned Pilot Flying J travel centers chain. Neither Haslam, a former top executive, and his older brother, Pilot CEO Jimmy Haslam, have been charged and both say they had no knowledge of the overcharging of smaller trucking firms on company accounts.” [Times Free Press, 10/6/17]

  • Breitbart Noted Pilot Flying J “Is Owned by Gov. Bill Haslam and His Family” and Any Additionally Required Details of Gov. Haslam’s Holdings “May Draw the Scrutiny of Federal Investigators Who Are in the Middle of a Five Year Long Investigation That is Now Culminating in Indictments, Plea Deals, and Trials.”According to Breitbart, “Some details about Gov. Haslam’s holdings in Pilot Flying J may draw the scrutiny of federal investigators who are in the middle of a five year long investigation that is now culminating in indictments, plea deals, and trials for many of the company’s top executives, save one: Gov. Haslam’s brother and company CEO Jimmy Haslam. Pilot Flying J, headquartered in Knoxville and operator of hundreds of gas stations and convenience stores in the U.S. and Canada, is owned by Gov. Bill Haslam and his family. Haslam’s brother, Jimmy Haslam, who also owns the Cleveland Browns, is the CEO of the company, which their father, Jim Haslam founded in 1958. Gov. Haslam has not been actively involved in running the company for many years but has an ownership share in the business.” [Breitbart, 9/29/17]