PFJ org chart and tracker.

Screen Shot 2013-06-22 at 2.38.50 PM

Click to enlarge.

.

UPDATE 7/29:  Two more yellow boxes.  Fenwick and Welch pled guilty, it was reported today.

.

DOJ is up to five guilty pleas in the PFJ fraud investigation.  Adding in CHS-1 and CHS-2 (Greco), that adds up to seven cooperating PFJ employees in the investigation.  I thought it might be useful to see where these people are in the org chart and check into how it’s mapping out.  In particular, are there are any straight lines to Jimmy Haslam?

The org chart is based on the info in search warrant linked here; it’s a best effort, but in some cases I’ve guessed who reports to whom.  (Stinnett is a question; I’m assuming discounting coordinator is part of accounting and rolls up to the CFO.)  If you’re not up to speed on the case, here’s the best review I’ve read on it.

_____
Who has pled guilty?

  • Arnie Ralenkotter, Eastern Regional Sales Director based in Hebron, KY (Cincy suburb).  Uttered the immortal line, “He thinks you’re fuckin’ em. So you might as well be fuckin ’em.”
  • Ashley Judd, Inside Sales (unclear whose account she handled).  Judd told CHS-2 that if anyone ever came in the office that that file would be first one that Judd would burn.
  • Kevin Clark, Sales Rep based in KC.  Unlucky for him, his boss was a DOJ informant and was rolling tape when Clark said:  “You’re gettin’ like cost-minus-1 but we were really givin’ him like cost-plus-3.  And the fucker never checked in the optimizer! To me, I felt like sayin’ Well you’re the moron that didn’t check it!”
  • Jay Stinnett, unclear his official role or who he reports to.  He was an outside rep, was promoted, and was at Freeman’s lake house meeting with other sales directors.  As near as I can tell, he seems like a Sales Productivity and/or Training jack-of-all-trades.  He didn’t teach the manual discount break-out session, but he planned it.  Among his damning tape:  “Our advantage is their ignorance.” (Male voice)  “Yeah, AKA, we’re fuckin’ ‘em. (Laughter.)”
  • Holly Radford, Inside Sales for Hanscomb.  In the fateful breakout session she coined the phrase, “Welcome to the gray side.”  She also handled Stinnett when he was on the road and ‘kept his shaved accounts straight.’

_____
Who must be sweating it out?

  • Brian Mosher, National Accounts Manager.  At the sales meeting, he taught the breakout sessions on manual rebates.
  • Vicky Borden, Inside Sales Director.  Her team seemed to be the mechanics enabling the manual rebate process.  April 1, a couple of weeks prior to the warrant being served, she was huddled up in meetings with Seabrook (General Counsel) and Steenrod (CFO) and was asked to provide them info on Pilot’s direct sales manual rebate practices.
  • John Freeman, VP Sales.  The likely fall guy.  Was the person who bought the airplane in 2008 to settle with Western Express after Western discovered a million dollar shorting.  (Seems to be some shenanigans on Western’s side of that transaction, FWIW.)  “Hey, this is a game. We’re playin’ fuckin’ poker with funny money, and its liar’s poker with funny money because of all this cost-plus stuff. So, you know, I’m not, I don’t want to get into a moral or ethical conversation, because I believe that if a guy’s gonna butt-fuck you then we got to go to butt-fuckin’ him harder than (UI).”

_____
What about Jimmy?

url-2

Stock photo of the Falcon 20F.

It seems obvious that the CEO would know why he’s buying a customer’s $7,000,000 airplane that doesn’t fly for $1,000,000.  But that (the Western incident) was in 2008 and it seems like the customer walked away happy.  Apart from that incident, CHS-2’s inside sales person offers a pretty exculpatory statement for Haslam here:

CHS-2: [Freeman] was cooking the books pretty good?
CRUTCHMAN: Oh yeah.
CHS-2: And why wasn’t Jimmy smart enough to figure that out?
CRUTCHMAN: Does he care?
CHS-2: What?
CRUTCHMAN: He just wants numbers.
CHS-2: But he knew …  John [Freeman] was monkeying with the rebates.
CRUTCHMAN: He don’t know anything about our business.
CHS-2: Well, he knew about Western, cause I remember sitting in sales meetings.
CRUTCHMAN: Western, because it got called out because of Knight.*  That’s the only reason. He didn’t know about the others.

Also note, Haslam was not at the Freeman’s lake house when the sales meeting was being planned; was not in the breakout sessions at the sales meeting when reps were being trained on manual rebates.  Freeman does not report to Haslam, he reports to President Mark Hazelwood.

Somebody’s special little girl has 50-odd manual rebates in action for PFJ.

In short, and based only on the affidavit, there is not a slam dunk case apparent that links Haslam to the fraud.

.

We’ll try to stay on top of the developments and keep the org chart updated.

_____

Random:  We’re not sure but we think Vols’ basketball coach Bruce Pearl’s daughter is selling for PFJ out of Chicago.  (He has a daughter Jacqui and how many Jacqui Pearls from Knoxville are there, seriously?)

_____

* Knight Transportation was looking into purchasing privately-held Western Express around this time and auditing their books which how the ‘plane deal’came about.  Either Western didn’t want Knight (traded on NYSE: KNX) to know about the plane or needed to get it off their books.  In any event, it seems the deal fell through.

You may also like...

  • Good job here K. The only thing missing in the chart is a thick blinking green line of dollar signs from Haslem to the layer of 3 below him. Whether he’s guilty here or not, it’s a good thing he has piles upon piles of integrity money he can shovel back at that firewall.

    Your “political motives” speculation still seems pretty unwarranted to me, but I guess it’s maybe understandable since you may have been under the spell of the lynch-mob’s bogus presidential scandal du jour at the time.

    • 1. weird how TIGTA (or “lynch-mob” depending on your level of indoctrination) investigated for two years and didn’t find this.
      2. not weird that CNN runs a convenient liberal-friendly leak.
      3. disappointing that you take that report at face value.

      true-believers gone true-believe.

      • I know. Plus, BENGHAZZI!!!!

        TIGTA didn’t find it? And why? They tell you why in their report. Because they didn’t look. You have to read the small print on these things:

        16 We did not review the use of other named organizations on the BOLO listing to determine if their use was appropriate.

        They were specifically looking for Tea Party case discrimination because that’s what congress told them to look for. The whole thing is a incredibly overblown. Every Tea Party group deserves this scrutiny, just as every progressive group or anyone else trying to affect political campaigns does. Because they are asking for the taxpayers to subsidize their activity.

        So yeah, I believe that “progressive” was on the bolo list. It’s totally obvious the way that Issa has selectively released transcripts that the whole thing has been ginned up into way more than it is. You want to bet money on whether “progressive” was on the list?

  • Max

    Excellent work. It’s never going to go all the way up to Haslam. So long as there’s plausible deniability, and no “smoking gun” (i.e tape of Haslam explicitly discussing/encouraging the scheme) Haslam will be insulated. And the only way I think this impacts the Browns is if PFJ sales fall so far that they go bankrupt.

    Without knowing exactly how the scam worked, it’s hard for me to sit here and judge either the customers or PFJ employees. Sure the PFJ actions were shady, but on the other hand, a person is only able to take advantage of you if you let them. Business is business, and it’s not up to the guy on the other side of the table to look out for you. In a perfect world, those companies that are unscrupulous would gain a reputation, and people would simply stop doing business with them, and natural selection could restore order.

    There’s always someone out there looking to take advantage of people and line their pockets. From servers at a restaurant trying to get a double gratuity on a party check, to banks paying brokers undisclosed premiums for selling their borrower a higher interest rate. Ultimately, it is no one’s responsibility but the people who were cheated (although I NEVER understood how it was legal to not disclose a payment from a bank to a lender…someone earned their lobbying money, thats for sure). I understand, it may sound kind of heartless, and naturally, it would be a better world if these types of things didn’t exist, but it is what it is. There is no Utopian society where things things don’t happen, so the best thing to do is act accordingly and look out for yourself.

    • yeah, i’m all kinds of conflicted on this story.

      – i’m of the old school sales model where you ‘don’t leave money on the table.’ the PFJ culture walks that line and crosses it… but the culture is familiar to me. i wonder if my business were as easy to game as ‘gas rebates’ are.. would i or my managers have been ultimately ethical/moral/honest? hope so, but can’t say with 100% confidence.
      – do the crimes fit the level of interdiction? i think the preceding bullet is bringing me around to, ‘yeah maybe.’ i doubt any of the 20-somethings in the field or in the ISR dept. were prepared to tackle ethical and possibly ‘career limiting’ decisions on the rightness of the corp policy. this case is a good reminder that you need to own your moral compass.
      – what about caveat emptor? indeed i think the customers bear some responsibility for tracking their operational expenses… but enforcing contract law is a valid role of govt so i can’t bark up that tree too too much.
      – the genesis of the tip-off remains a mystery and given the prominent republican-ness of the haslams i can’t not leave that open for investigation.

      but that was way too much to dig into today.

      i was mostly interested in seeing who had pled (pleaded?) out and how it looks for haslam. like you, i think the financial impact (of say a moodys downgrade) is more likely to impact haslam’s browns ownership. but freeman is obviously the key to taking this higher up the food chain. he seems a loose cannon; it’s not sure thing that he falls on his sword.

      • Max

        Funny you mention a Moody’s rating…did you happen to see Matt Taibbi’s latest article on how Moody’s and Standard and oors were essentially “selling” their ratings to the investment houses on the mortgaged based securities they all knew were junk? These people should be going to jail, and the Feds can worry about gas rebates later.

        http://www.rollingstone.com/politics/news/the-last-mystery-of-the-financial-crisis-20130619?print=true

      • “yeah, i’m all kinds of conflicted on this story.”

        I want to laugh at this and all the conflicted gymnastics here, but it’s really too depressing that folks are so resigned to a system in which the Truckstop Jimmys of the world could be in such a position to abuse people (and the planet, another issue of course) in the first place. Though if you want to try to tell me that “free markets” have anything to do with ten and eleven figure fortunes that depend entirely on the availability of cheap fossil fuels, I’ll have no choice but to lighten up.

        Whether he gets off in this rebate case or not, the guy is the worst of the worst.