Gov. Haslam and his family made the front page of the Wall Street Journal on Wednesday. It's a really fascinating read. I, for one, hadn't realized how much of Pilot's money was tied up in the Browns. I had assumed it was Jimmy Haslam's personal money, but the Journal reports:
The company's debt nearly doubled to $4 billion in a two-year period through last year, as its owners paid themselves two payments totaling $1.7 billion from it, according to Moody's. Last year, Pilot issued $1.1 billion of the debt — largely to fund the second one, a dividend for $700 million, according to S&P. That was partly so Jimmy could buy the Cleveland Browns.
I guess that makes sense. Rich people don't put their money in an envelope and save up a little bit every month until they can afford a football team. Still, if I had been "cost-plussed," I might be calling Jimmy Haslam up and asking if that money bought me some good seats to the Browns' home games. After all, the timeline makes it appear that it was Pilot's alleged success defrauding its customers that helped finance this deal. (I wonder how the NFL feels about that timeline?)
The other thing that struck me was this:
But the family's life has changed since the FBI raid. In the governor's office, Bill Haslam, 54, who worked at Pilot 18 years, says it is difficult to concentrate. "It's my father, my brother," he says. "I have a job to do, but that doesn't mean that inside you aren't hurting."
[Jimmy] Haslam won't discuss the particulars of the April FBI raid. All he says, his normally booming voice quaking, is: "I'm glad Dad wasn't there, OK?" Big Jim first heard of it in a phone call from his assistant on a bike ride in Hilton Head, S.C. Bill Haslam got a text alert on his cellphone. "I'm thinking, what in the world?" he said. He thought something violent had occurred.
This is something I find compelling. It must — regardless of your guilt or innocence — suck to know that your family's legacy is being destroyed on your watch. That's one of the drawbacks to a family company — as goes the reputation of the company, so goes the reputation of the family.
If you want more from the Journal article and aren't a subscriber, Metropulse has some more excerpts.
Well, the Plain Dealer has one interesting tidbit related to that:
Clark, Stinnett and Radford pleaded guilty to fraud-related charges last week. Prosecutors filed a plea agreement in Clark and Stinnett's cases, but a similar document has not been made public for Radford.
In her case, prosecutors told a judge June 11 that Radford had entered into a "cooperation plea agreement," but they asked that it be sealed because "it is believed that the public filing of the plea agreement at this time could compromise the government's ongoing investigation."
Now, remember that Holly Radford was one of the regional account reps, which means that she worked closely with any number of regional sales managers. From what I can tell from the affidavit, it's the account reps who actually enter the data into Pilot's computers. So the regional sales manager may say, for instance, "Short Betsy's Trucking Company by 3 cents a gallon," but it's the account reps who seem to make that happen. There are also instances in the affidavit where it appears that sales managers or their bosses look at spreadsheets the account reps draw up that show how much money the accounts should have gotten, and appear to have made further fraudulent changes to those numbers.
Radford would be in a position to have possibly made changes to the rebates on behalf of regional sales managers, regional sales directors, and potentially VP of Sales John Freeman. On whose behalf she made changes could be very damning evidence. But also, she is in a position to testify how much her boss, Vickie Borden, knew and, more importantly, whether Borden's boss, Scott Wombold, vice president of national sales, knew anything.
Someone in Radford's position is a good source of information for just how widely this apparent corruption spread in the organization.