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TNDP Calls on Haslam to Disclose Income

Press release from the Tennessee Democratic Party; June 19, 2013:

NASHVILLE, Tenn. — On the heels of three guilty pleas tied to a scandal embroiling Gov. Bill Haslam’s Pilot Flying J truck stop chain, the Tennessee Democratic Party is calling for the governor to release his tax returns and show how much he makes annually from Pilot Oil and other investments.

On Tuesday, three more Pilot Flying J employees pleaded guilty to charges stemming from a scheme that padded corporate profits by defrauding small business owners and trucking companies of millions worth of rebates. Two additional employees of the $30 billion company pleaded guilty in May.

“With five guilty pleas, we know Gov. Haslam’s company Pilot Oil stole from working and middle class family businesses, but the question of how much money poured into the governor’s personal fortune from this fraud remains unanswered,” said Brandon Puttbrese, party spokesman. “We don’t know because Gov. Haslam is hiding his income.”

For years, Republican and Democratic governors in Tennessee have embraced the values of open and honest governing by voluntarily releasing their tax returns.

“Tennesseans are due the same financial transparency from Haslam that other governors — whose companies weren’t the subject of fraud investigations — have shown,” Puttbrese said. “It is clear Haslam prefers to work in secret, but our democracy is built on accountability, and we can’t hold politicians accountable when they refuse to come clean on simple matters like releasing their tax returns.”

In May, the TNDP posted an online petition asking citizens to add their name in support of calling on the governor to release his tax returns.

Background

Haslam Broke “Tradition” of Releasing Returns. Bill Haslam’s refusal to release his tax returns during the gubernatorial campaign (and in years following) breaks “a long tradition of governors disclosing their returns voluntarily. Republican governors including Lamar Alexander and Don Sundquist did so, along with Democrats including Ned McWherter and Phil Bredesen.” [KnoxNews.com, 10/9/11]

Haslam’s First Decision As Governor: Hide Pilot Income. “Republican Gov. Bill Haslam has signed an executive order that eliminates a requirement for the governor and top aides to disclose how much they earn.” [Associated Press, KnoxNews.com, 1/16/11]

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Business and Economy Featured Tax and Budget

Haslam Comfortable With Brother Lobbying Against Rest-Stop ‘Commercialization’

Gov. Bill Haslam finds himself answering questions again regarding the ongoing watch on his interest in Pilot Flying J truck stops, the Haslam family business.

The issue of the governor’s stake in Pilot rose quickly in Haslam’s campaign for governor in 2010 and has surfaced again in Haslam’s first term with a different twist. The governor’s brother, Jimmy Haslam, CEO of Pilot Flying J, reportedly has sent a letter asking state and federal lawmakers to prevent the commercialization of rest stops on Interstate roadways as states look at ways to boost revenues.

The Haslam family truck stop business would theoretically stand to lose business from a commercial presence at state rest areas. The Knoxville News-Sentinel reported on the letter written by the elder brother, who is also a board member of the National Truck Stop Operators Association.

But Bill Haslam, former president of Pilot, says the matter does not put him in an uncomfortable position as governor, that his brother is certainly within bounds to speak out on the issue and that it’s a bit of a non-issue in Tennessee anyway.

Nevertheless, the latest wrinkle in the issue suggests the governor’s tie to Pilot figures to be watched as long as he is in office.

James Haslam II, father of Bill and Jimmy Haslam, founded Pilot beginning with one gas station. The business has grown into a giant truck stop chain, including a merger approved last year with Flying J, leading to questions about a potential conflict of interest for Bill Haslam as governor. Those questions came from some of Haslam’s opponents in the 2010 campaign, most notably from former Shelby County District Attorney General Bill Gibbons, who ultimately became Haslam’s commissioner of Safety.

“That was something I was involved in way before I became governor,” Bill Haslam said Friday of Pilot and the issue his brother addressed. “I don’t think that’s really on the radar in Tennessee anywhere anyway. So I don’t think it puts me in a difficult position.

“I think his point was, no matter what the business is, if you made an existing investment counting on a certain set of circumstances, the state wouldn’t sell its own right-of-way for other people to use. It’s not really fair to go back and change the law to give one person a preferred position there.”

There hasn’t been much indication Tennessee government officials or elected leaders are at this point interested in commercializing rest areas.

In an email response to an inquiry about the issue from TNReport, TDOT spokeswoman B.J. Doughty said her department “has no position on the legislation being proposed by federal lawmakers to reverse the ban on commercial development at highway rest areas, as we do not want to presume to know what is in the best interest of other states in the US.”

“However, we believe that privatizing the operations of our facilities is not in the best interest of the State of Tennessee and would not be compatible with the vision of the department,” Doughty added. “We maintain that commercializing rest areas with direct access to the interstates would compete with businesses located along the interstate exits resulting in fewer option for motorists. We will continue to monitor proposed legislation from all levels of government with regard to our transportation system.”

Delaware recently opened a 42,000-square-foot welcome center on I-95 that the state didn’t have to pay for, according to Stateline.org. Delaware has a contract with a retail company, which gives the state a percentage of revenues from the site.

Federal law enacted in 1956 prohibits selling food and fuel at Interstate rest areas, other than from vending machines, at locations built after 1960. Some existing commercial stops had already been built in some parts of the country at the time. The national truck stop organization cites a University of Maryland study that says in states that operate commercial rest areas 50 percent fewer businesses exist at Interstate exits.

Tennessee has 18 rest areas and 13 welcome centers on its Interstate highways.

Bill Haslam was asked by a reporter Friday if his brother should shy away from taking public policy stands.

“No, he definitely shouldn’t,” the governor said. “He’s the CEO of a major Tennessee business that has their interest to defend.

“Actually, that’s nothing new. Pilot’s been talking about that, as has everybody else that has an Interstate-related business, from McDonald’s to everybody else, for years.”

The governor said the principle of the issue is about government changing the rules of the game after they’ve already been established.

“People who make investments off of Interstates and then the state comes in and takes its public right-of-way and lets a private company go into business there, I think the argument is just you’re changing the game,” Bill Haslam said.

Pilot Flying J is established as a Subchapter S corporation, where stakeholders claim gains and losses through their personal tax returns. Pilot became a lightning rod for Bill Haslam in the governor’s race as he refused to disclose his income from the family business, although he did disclose income from investments outside Pilot.

Haslam announced in his initial disclosure statements that as governor he would put his investments outside of Pilot into a blind trust but that he would not put Pilot holdings in a blind trust as governor. Haslam’s position is that the public knows where his income comes from with Pilot so there is no point in disclosing his income from Pilot.

The issue rose again, however, soon after Haslam was sworn in on Jan. 15. His first executive order was to declare members of the executive branch need only disclose what is in state law, same as members of the Legislature, meaning members of Haslam’s cabinet did not have to disclose the amounts of their income from outside sources, although they did have to identify the sources of their income.

That move rolled back an order that had been in place under Haslam’s predecessor, Phil Bredesen, who required disclosure on income amounts.