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KNOXVILLE, Tenn. – Sometime after lunch on an ordinary Monday, a marketing meeting slogged on as a procession of police cruisers, FBI agents in bulletproof vests and the IRS made its way up a hill to Jimmy Haslam's family empire.
Haslam sat at the head of the table at that meeting. The CEO of Pilot Flying J, a company Haslam and his daddy built into the largest truck-stop chain in North America, always sat at the head of the table. It was April 15, and he was pressed for time. He had recently purchased the Cleveland Browns, and was splitting his days between Ohio and Knoxville, home of Pilot Flying J. Haslam was tired, riding about four hours of sleep a night, but it was a good kind of fatigue. For years, the sports-obsessed Haslams had wondered what it would be like to own a pro football team. And now here it was, 10 days before the NFL draft, and Haslam's mind no doubt occasionally drifted from diesel sales to outside linebackers.
His daughter, Whitney, was at this Monday meeting in Knoxville. She'd had a baby and was back on the job, the third generation of Haslams to work at Pilot. Jimmy's cell phone rang in the middle of the meeting. Within moments, a mass of law enforcement agents swarmed the building and, according to one family account, the billionaire was ordered to put his hands in the air and face a wall.
The agents passed by a sign in the lobby of Pilot Flying J, the one that lists the company values.
"We do the right thing -- Integrity comes first."
|Jimmy Haslam became majority owner of the Cleveland Browns in October 2012.|
The wheels of justice move excruciatingly slow. It is not like football, in which winner and loser, wrong and right, is decided over the course of three hours. For two years, the federal government investigated Pilot Flying J, and put together a 120-page affidavit. It alleges that Pilot defrauded its trucking customers out of millions in fuel rebates, and that Jimmy Haslam knew the scam was taking place.
Haslam concedes that Pilot may have wrongly shorted customers, but he steadfastly maintains that he was unaware of the scheme. People with knowledge of the investigation say it could take months, maybe longer, to sift through evidence and issue indictments. So the answers to why and how this giant mess could possibly happen to a man whose reputation was seemingly solid, whose purchase of the Browns was unanimously approved by the NFL, are unknown.
Perhaps the story of his family, and its rise to prominence, provides hints.
The Haslams are one of the most powerful families in the South. Jimmy's younger brother, Bill, is the governor of Tennessee and is considered a potential Republican candidate for the White House in 2016. They don't like to talk about that, of course. One store at a time, one election at a time. Their father, "Big Jim" Haslam, is a regular Horatio Alger story, taking Pilot from a tiny gas station to an American interstate institution.
Along the way, Big Jim has been generous with his fortune and his time. Walk around the University of Tennessee campus, and there's a music center, some practice fields and a business building named after the Haslams. Head down to a grittier part of Knoxville and you'll find the Haslam Family Boys and Girls Club.
Big Jim is proud of his company, his community, but most of all, his family. He played football at UT, and was an imposing lineman back in the glory days of the1950s. But he wasn't really known as Big Jim until Jimmy came along.
The family patriarch agrees to meet on a fall morning in Knoxville, eager to talk about family values. His son isn't doing one-on-one interviews right now. The Browns say he doesn't want to take away the focus from the team; his lawyers undoubtedly want him out of the headlines. But Big Jim will go on for more than an hour, stopping only to look at his watch once, then apologizing for doing that.
On April 15, the day of the raid, he was on a bike ride in Hilton Head, S.C. His blood pressure spiked when he got the call, and he quickly pedaled his 82-year-old legs and artificial knees three or four miles back to his vacation home. In the chaos of it all, Jimmy managed to make one known phone call, but it wasn't to his daddy. That would come later. Jimmy phoned Browns CEO Joe Banner to give him a heads-up before his legal problems hit the news. He told Banner that nothing would change, that the events would not derail their plans to bring a winner to one of the NFL's most moribund franchises. He also assured Banner that he was unaware of any illegal activities going on at Pilot.
"You ask what I'm proudest of Jimmy for?" Big Jim says. "It's how he's handled all this since April 15. It's just like I would've hoped he'd handle it. He realizes he's in charge and he's going to stay in charge.
"We've learned a lot, and nothing like this will ever happen again."
It's just after 10 a.m., and Big Jim is knocking down a 32-ounce Diet Coke in a Pilot cup. He prefers soda to coffee. His office windows at Pilot headquarters overlook Interstates 40 and 75, where he can watch the trucks -- and his livelihood -- rumble by. Down the road, he says, is a convenience store that used to be a little gas station. Jimmy pumped gas there. The old man settles in on a couch in his office, near a photo of himself with President George W. Bush at the 2005 inauguration. Big Jim helped G.W. get elected, but isn't interested in talking about that right now.
Where do we start? We start at the beginning.
Everything, from the way Big Jim lives his life, to the way the Haslams approach business, to how they deal with crisis and grief, can be summed up with a list of sayings from a football coach who died more than 50 years ago. Big Jim was an intimidated little teenager when he met Robert Neyland, an Army brigadier general and a legendary coach at Tennessee. There were offers from Florida and Duke, but Big Jim met The General, and he immediately knew where he was headed.
"He was like God," Haslam says.
Neyland was a tough and disciplined coach who had his teams recite seven maxims that he believed were necessary to win games. Haslam mentions two repeatedly:
The team that makes the fewest mistakes will win.
If at first the game -- or the breaks -- go against you, don't let up. Put on more steam.
|Jim Haslam, founder of the Pilot, speaks at the company's 40-year anniversary party held at the corporate office on Nov. 19, 1998, in Knoxville, Tenn.|
Neyland led the Volunteers to two national championships during Haslam's time in the early 1950s. And Haslam insists, even today, that he wouldn't be nearly as successful if he hadn't gone to play for the coach. Haslam pledged Sigma Chi, and met a pretty and quiet sorority girl named Cynthia Allen who would eventually become his wife. He graduated and joined the Army and was stationed in Korea just after the armistice was signed.
By the age of 23, Haslam was a company commander. He says he was in charge of 200 men.
In 1954, Jimmy was born in the United States while Big Jim was still in Korea. A year later, Haslam was discharged and had a variety of options. He could coach high school football, but wouldn't be paid right away, and he needed money for his new family. He could work for Sam Claiborne, a Tennessee businessman who had a chain of gas stations, or he could sell advertising for television.
"This shows how smart I was," Haslam says. "In my infinite wisdom, I thought, 'Hmm, I don't know if television is going to make it.'"
So gas stations it was. Haslam was so good at his job that he eventually decided to start a company of his own. He opened his first station in Virginia, purposefully away from Claiborne's territory -- he didn't want to compete with the man who gave him his start -- and Pilot was born.
Using one of Neyland's maxims, he tried to make his own breaks. He constantly studied traffic patterns and mapped out sites for new locations. When Jimmy was big enough, he tagged along with his dad to work.
Big Jim and Cynthia had three children -- Ann came two years after Jimmy -- but it was clear, early on, that one sibling took more interest in the family business than the others. Jimmy loved spending Saturdays with his daddy, buying the buckets to clean the windshields, watching cars go by. Jimmy worked as a filling station attendant; he was Pilot's janitor, cleaning the company headquarters at 10:30 at night while he was a student at UT.
His role with the company dramatically changed on Dec. 5, 1974, a day that he has called the worst of his life.
Ann Haslam arrived home that day to find their mother, Cynthia, lying dead in her bed. Big Jim says his wife died of a heart condition similar to what her father died from in his 30s.
She was 42 years old.
"Cynthia was a very good mother," Big Jim says. "She never saw what her kids achieved.
"It was a very defining moment. Losing somehow makes you better. It's a terrible thing, but I think it's made each of them stronger in their own way."
Jimmy took his mother's seat on the Pilot board. He was 20 years old. The family doused its grief with sports and humor. It helped that Jimmy and several of his fraternity brothers were living in a gatehouse at the Haslams'. The boys provided levity to a sad and lonely house.
"I remember his dad logged in so many miles each year in those days running," says Sen. Bob Corker, who lived with Jimmy in the gatehouse.
To help pass the time, Big Jim used to go up to his old campus to watch Jimmy play intramural football games. The kid's intensity was obvious even back then. His frat buddies like to tell the story about the time one of Haslam's teammates was cut so badly that part of his chin was hanging by a flap. The teammate, Bobby Reagan, wanted medical attention, but Haslam barked at him to get back on the field. He told him not to quit.
They knew, even back then, that Jimmy was destined to lead. He used to keep an envelope in his pocket with a daily list of things he wanted to accomplish. His buddy Bob Talbott thought that was unique, that a college student was so driven. Haslam was president of the interfraternity council and played at least three intramural sports at UT.
"He was a crappy shooter," Talbott says of Haslam's basketball days, "but you wanted him on the team because he hustled."
Around the time Haslam graduated from Tennessee, he briefly flirted with the idea of going into politics. He visited Ross Bagwell Sr., a TV man and a friend of the family, to get his advice about a possible run for state senate. Bagwell's daughter Dee had been friends with Jimmy since their days in private school. When Jimmy left the house that night, Bagwell told his daughter that he knew whom she should marry: Jimmy Haslam.
Dee rolled her eyes. She was married and divorced by then, a single mom juggling a job and college. "There is no way Jimmy Haslam is going to marry a divorced woman with a child," she told her father. "I mean, seriously, Dad? He is not going to be interested in that."
Six months later, the Haslams and Bagwells were vacationing in Fort Lauderdale, Fla., and Jimmy needed a dinner date. He asked Dee, and they went out every night after that. They got married six months later.
Somehow, maybe Cynthia Haslam had a hand in it. She was very close to Dee. She threw a party for her when Dee married her first husband.
Shortly after Jimmy and Dee got together, Jimmy told her, "My mom always liked you so much."
The Haslams were going through changes in the mid-1970s -- Big Jim married longtime friend Natalie Leach Tucker; Bill went off to college at Emory -- and Pilot was on the verge of transformation. The industry was evolving, and selling gas and cigarettes wasn't profitable enough. Jimmy, who by this time had decided against running for state senate, was immersed in the family business.
Big Jim had a job for him. He wanted Jimmy to help the company move to its next phase, toward convenience stores. There was a gas station near the Knoxville airport that Big Jim decided would be a good project for his son. He told him to tear it down and make it a convenience store.
Young Jimmy asked how he was supposed to do it, and Big Jim said, "Hell, I don't know. Go look at a bunch of other convenience stores and figure it out."
He figured it out. In 1977, Pilot bought Lonas Oil Co. in Knoxville and converted nearly all of its locations into convenience stores. Four years later, the company had 100 convenience stores and yearly sales of more than $175 million.
It was Bill who gave Big Jim the idea of adding fast-food restaurants to the fuel centers, actually. Bill was traveling in Ohio sometime in the late 1980s and saw a Dairy Queen at a truck stop. Initially, Big Jim said it was the silliest thing he'd ever heard. Bill told him to check it out.
"So we went and looked at it," Big Jim says, "and we tried it. Probably by the mid-'90s we had the full travel center concept."
Big Jim may have laid the groundwork, but he says Jimmy "took it to a whole bunch of levels." In a five-year span from 2001 to 2006, with Jimmy as CEO, Pilot entered an agreement with Marathon to form Pilot Travel Centers, acquired Williams Travel Centers and branched out to open its first shop in Canada.
Pilot Flying J currently has more than 650 travel centers throughout North America.
Knoxville historian Bruce Wheeler, who's known the Haslams for years and is used to seeing Pilots all over town, recently was reminded of what a monstrosity the company has become. He was vacationing in western Montana when he came upon one of the travel centers.
"I think the feeling," Wheeler says, "is that the company, and this may or may not be true, grew so large so fast that it sort of lost control of its arms and legs."
|Haslam at Browns training camp in July.|
Most people who know the family say Jimmy is just like his father. They're hard-charging men with long, schmoozy laughs and outgoing personalities. They know what they want, and they're not afraid to express it, then go out and get it.
Ann and Bill, Big Jim says, are more like their mother. Bill is a listener. A compromiser. He did not have plans of running Pilot, and at one time hoped to teach or maybe become a minister. When Bill told his father he was planning on running for Knoxville mayor more than 10 years ago, Big Jim was taken aback somewhat. He always saw Jimmy as the politician.
Politics, Pilot and sports -- that's what the Haslam men spend most of their time talking about. Many years ago, Big Jim was approached about becoming mayor of Knoxville, and he quickly shot it down. He ran truck stops, he said. What did he know about politics? He actually knew plenty.
Bill Haslam was called an "oil company puppet" when he ran for mayor in 2003. . According to his opponent, Madeline Rogero, he raised four times as much money on his campaign than she was able to muster. But Haslam, Rogero said, never took anything for granted. He knocked on doors and canvassed streets. He beat Rogero by a 52-46 margin.
A few years into his job as mayor, he appointed Rogero director of community development. Haslam later said he was inspired by the book "Team of Rivals," which told the story of how Abraham Lincoln appointed former campaign foes because he thought they could help his cabinet.
"He's so genuine and so good-hearted," says Mike Arms, a former chief of staff for the Knox County mayor's office. "When he was city mayor, when we were dealing with issues, he'd always go back to this statement: 'Well, what's the right thing to do?' Not the politically correct thing to do, or the most financially prudent thing to do. What's the right thing to do?
|Bill Haslam speaks to political supporters after winning the Republican primary for governor in 2010. He won the Tennessee governor's race in November that year.|
"He's never been confrontational. It was obvious some people didn't agree with what he was doing, but he didn't attack anyone. He always stayed on the positive side."
When Haslam was elected governor in a landslide in 2010, Big Jim swelled with pride. He filled his office with pictures of his boy on election day. A February 2013 article in Politico called Haslam "the most important Republican governor you've never heard of," a man who makes government work. The article said Haslam had a 68 percent approval rating at the time.
But he has his share of critics. They bristled when Haslam refused to disclose his personal ownership stake in Pilot. They wondered why one of Haslam's advisers has also been working with Pilot's public handling of the FBI investigation."The Haslams have done some wonderful things in the community," said Tennessee state Rep. Gloria Johnson. "[Bill] might be a nice family man and all of that. But unfortunately as governor, he's appointed Pilot board members to high-powered government jobs and given preferential treatment to businessmen and lobbyists with ties to Pilot."
And then there are the people in Knoxville who believe that Big Jim has his hand in just about everything, including the hiring of UT presidents and football coaches.
"They have such a large footprint here," says Dennis Francis, an attorney in Knoxville for four decades. "When you have every building in town named after you and you have the practice facility named after you … These people are huge.
"They are not used to anybody ever questioning them on any level at any time. That's probably part of their problem. Every business, every organization, every family, every relationship needs somebody to tell you no. No one ever questioned anything they did. Ever."
When it comes to business, Jimmy Haslam is hands-on and intense. He's a truck-stop savant. Mention a city, anywhere on the map, and he can rattle off where the Pilot Flying Js are. The Council Bluffs, Iowa, location? It has an Arby's and is near a casino, Haslam would say. He's traveled these roads for decades. Pilot and the Browns are his babies, and like any parent, he knows his children.
Every week, Haslam flies to a region, rents a car and drives around to various Pilot travel centers. He checks the books, the gas pumps and even the restrooms to make sure they're clean. He talks to the woman at the register. He loves interacting with his employees.
It raises an obvious question -- how can Haslam tell you if the paper towels are low at a truck stop in Tennessee, but he didn't know that some of his highest-level employees allegedly were shorting customers millions of dollars?
Seven Pilot workers and execs have pleaded guilty as a result of the federal investigation. Last week, Jimmy held a brief news conference outlining the steps Pilot has taken to make things right for its customers, to repay the money with interest. Haslam did not answer any questions.
"There is no way that any Haslam that I know, no way that Mr. Haslam, Jimmy or Bill would ever be involved in anything they know to be unethical or illegal," Sen. Corker says. "The company has grown rapidly. There's been acquisitions, there's a lot that is happening, and let's face it, it's a powerhouse in the industry. Obviously, some things did occur in the company. But is there any way I would ever believe that Jimmy had any knowledge of this? Absolutely not. There's no possible way."
Weather moves quickly through the Smoky Mountains, and a gloomy day in Knoxville can always take a good turn. In Cleveland, it's much more predictable, especially in the winter. It's downright frigid in Cleveland in the winter.
To get a sense of how badly the city has hungered for a winner, one need only look at the attendance of a September game between Cleveland and the Cincinnati Bengals. The Browns, 1-2 at the time, packed in more than 71,000. It was days after the team traded first-round draft pick Trent Richardson, its star player, in what was viewed nationally as a sign that the franchise was giving up on the season.
Haslam, who previously owned a minority stake in the Pittsburgh Steelers, loves the city's passion for its team. Last year, he sat with the rowdies in the DawgPound at FirstEnergy Stadium, putting the fans in a tizzy. Cleveland is a town with a painful football history. Clevelanders watched a former owner, Art Modell, move the franchise to Baltimore; they've watched the Browns return with very little success. Haslam represents hope.
When the new owner met Joe Banner for the first time, Haslam told him he cared about only two things. He wanted to win as many games as they possibly could. He wanted the fans of Cleveland to feel as if they were provided the best experience, the most appreciated experience, of any team in the league.
The front office was overhauled, and Haslam quickly sank $5 million into renovating the team facility. The football offices have few walls and many windows, a nod to transparency.
The Browns have a plan, to build an aggressive, gritty defense, and their new acquisitions have already shown great promise. They need a franchise quarterback, and the Richardson trade will give them two first-round draft picks and more options.
Haslam and Banner wanted to see a change in culture and work ethic in this first season. The Browns are off to their best five-game start since 2001. Banner says nothing has changed; the plan is still intact. "I just have faith in him," Banner says. "I have experienced an extremely principled and extremely honest man."
Last week, Cleveland played Buffalo in a Thursday night game, and Jimmy watched as T.J. Ward sealed the victory with an interception and touchdown return in the final minutes. Jimmy high-fived Browns exec Mike Lombardi, then pumped his fist. And for a moment, there was no talk of lawyers or rebate scams.
There have been reports that say the league has worked out a contingency plan if Haslam is indicted, and that Big Jim would assume ownership in that scenario. The elder Haslam, who goes to all the Browns' home games, won't comment on that.
He is convinced his son knew nothing. That the family values remain intact, values the old man learned long ago on a football field. A week after the scandal hit, Big Jim received an award from a group called Leadership Knoxville. In front of hundreds of people, he defended his son and Pilot, and said, essentially, that the Haslams aren't going anywhere. He received a standing ovation.
"I'm going to devote the rest of my life to rebuilding the image of this company," Haslam says. "We're going to fight our way through this and we're going to be better because of it."