Tuesday, April 23, 2013

‘Low hanging fruit’

If you did not hear about the FBI raid on the Pilot Flying J corporate offices on April 15, and are not tuned in to all the ensuing events, you are trucking on another planet.

At first, the reason for the raid was pure speculation, but the guessing game didn’t last long.

When the long and detailed affidavit for search warrants was unsealed in federal court in Knoxville on April 18, the gasp could not have been louder. Maybe gasp isn’t the right word. It was kind of a choking sound, like when a superstar CEO of a mega-corporation has to face the industry and apologize all over the place for his company’s cheating many beloved customers.

Jimmy Haslam addresses the media. (Image via press
conference webcast at pilottravelcenters.com)
Yesterday I listened to Jimmy Haslam’s latest statement to the press regarding the FBI investigation. When he said he read the affidavit word for word Friday night – sat down and studied it like a “student” – I thought to myself, he was doing what all good reporters were doing, as well as many Internet-savvy trucking company customers.

He said he was embarrassed and he should have been. The affidavit was a shocker.

Recordings caught slick sales team personnel red-handed with explanations of how they cheated many trucking customers who had agreements to buy Pilot Flying J fuel and, in return, get a rebate. The rebates for many, however, have allegedly been manipulated.

According to the affidavit, the investigation alleges a rebate scheme designed for the dual purposes “of increasing the profitability of Pilot and increasing the diesel sales commissions of the Pilot employees participating in the fraud.”

It was submitted to the court by an FBI agent, whose reports detail the FBI investigation and recount information provided by informants, both named and confidential, and actual dialog recorded. It intended to show probable cause in order to get a search warrant.

But you won’t be reading verbatim details of recorded conversations of Pilot Flying J sales people in newspapers. The profanity often gets in the way of many true quotes.

It documents some high-level sales personnel at a meeting openly discussing the “screwing” or other terms used to describe the business practice of cheating companies who were “low hanging fruit” or not sharp enough to spot the fraud.

A school of thought with some of the fuel sales team seems to be that it’s OK to “monkey” or “jack” with the discounts promised the customer if they are too dumb to reconcile their records with Pilot Flying J’s records and prove it. If Pilot got busted by a smart trucking company who called them on the difference, sales people learned to call it a “computer glitch.”

Example of some of the recorded dialog:

“If the customers aren’t smart enough to know what they’re getting then they don’t deserve the rebate.”

“F--- them early and f--- them often.”

“I called Jimmy and told him I got busted at Western Express.”

“What did he say?”

“Oh, he knew it. … Absolutely. I mean he knew all along that I was cost-plussin’ this guy, he knew it all along. Loved it. We were makin’ $450,000 a month on him … why wouldn’t he love it?”

“Our advantage is their ignorance.”

“Yeah, aka we’re f---in’ them.” (Laughter)