Rebate Raiders Hit Pilot Flying J To Intimidate Haslams, Local Economy

Thursday, April 18, 2013 - by David Tulis

"Vagueness may invalidate a criminal law for either of two independent reasons: first, it may fail to provide the kind of notice that will enable ordinary people to understand what conduct it prohibits; second, it may authorize and even encourage arbitrary and discriminatory enforcement."

— City of Chicago v. Morales, 527 U.S. 41, 119 S. Ct. 1849, 144 L. Ed. 2d 67, 1999 

Conflict stimulates our interest in local economy, that is — the struggle between the local vs.

the national economy. We in Chattanooga are national economy’s willing and happy clientele, the consumers who buy its products, engage its people for services, who submit to its purported governing authority in the shape of our dear, bedraggled Uncle in the federal barony. 

Its retail stores — CVS, Lowe’s, Burger King, SunTrust — dot the landscape in Hixson, Middle Valley, Ooltewah and other parts of Chattanooga. Its software makers and cellphone carriers crowd the TV airwaves whenever the wife watches one of her shows at night. Its big data sucks up information from our emails and credit card purchases across state lines. Its ads make the glossy mags puffier.  

National economy is the success story. It draws local dollars out of local economy and wraps it tightly to its corporate bosom. 

Unpaid rebates become a criminal matter 

On Monday in Knoxville the chief steward of national economy, the U.S., conducted a raid on the headquarters of a Tennessee company, Pilot Flying J, to execute four search warrants on one of the largest private companies in the U.S. Pilot Flying J runs travel centers along the nation’s highways, and has among its customers trucking companies.
At issue are Pilot rebates to trucking outfits. A rebate is “a return of part of a payment, serving as a discount or reduction,” (Black’s Law Dictionary). A rebate in the trucking field is an inducement for a company such as Schneider or the Maersk to increase its purchases of diesel fuel. A company buying 200,000 gallons pays a lower rate than one buying 100,000. When a company paying the 100,000 rate for fuel reaches 200,000, it is due a rebate for having reached a higher level. 

Pilot Flying J is run by the well connected and wealthy Haslam family. Bill Haslam, the son of the founder, Jim Haslam, is the Republican governor of Tennessee, and is a shareholder. The company reportedly had sales of $29.3 billion in 2011. 

The raid Monday by at least 30 IRS and FBI agents wearing white bulletproof vests focused on IT, accounting and customer services officers, the Knoxville News Sentinel reported. Reports in mainstream media failed to indicate important details of the raiders — the extent to which they wore helmets and how their weapons were held. Neither did initial reports suggest the level of violence, shouting, cursing, threats and intimidation applied to people in the offices. Knoxnews.com says a witness described “an orderly but swift effort” by agents to verify 200 staffers’ IDs and job titles, to boot everyone in three buildings not essential to keep the HQ running during the seizure.  “They came in pretty quick — it wasn’t a calm event.” 

A national economy subtext 

What is the difference between a crime and a tort? A tort would be if Pilot refused to honor contractual obligations to a customer, giving that party grounds to sue for redress. That is, private redress, civil litigation. A crime “is held to constitute an offense against the public pursued by the sovereign,” a legal authority states. How can rebate nonpayment rise to that level? If anything, might that not be a federal civil matter — if that? “No act can be considered a crime unless  it has been previously made a crime, either by statute or by common law. Thus, failure or refusal to perform contractual obligations or the mere neglect of a legal duty standing alone, will not warrant conviction of a crime,” notes American Jurisprudence, a legal encyclopedia. 

But Uncle doesn’t have to worry about every pursuing a conviction. He can pick “tax day,” April 15 every year for taxpayers, conduct a high-profile military raid against a corporate citizen for numerous governmental purposes, including bluff. It is bluff and threat that keep the American system of voluntary compliance in federal taxes upon wage earnings going. 
I suggest the national subtext of the Pilot Flying J story is as follows. 

— Without making any explicit connection with the state’s governor, the federal raid is a potential means of intimidation against the Haslam family. Gov. Haslam has refused with some vigor to sop up the “free” Obamacare money. An incomprehensible tangle of rules could gurgle forth with the cash elixir, and Mr. Haslam blanches at the tradeoff against the rights of the free people of the state. 

— Apoplexy at the center, paralysis at the extremities. A military raid against a company with differences of opinion over a marketing and affinity business tool seems almost apoplectic. The raid is the spasm of an epileptic. It is an event ordered, directed, planned by people who have lost their perspective as law enforcement employees. Think of it. A terrorist attack hits Boston, and FBI employees in our district are putting their virility, vigorous professionalism their good faith callings to the service of penalizing a company whose bookkeeping differences with customers hasn’t even reached the point of litigation. I’m not suggesting the raid, probably long in the planning as part of an investigation, should have been called off by booming sounds in Massachusetts. 

But I ask simply the following: If Swift Enterprises or Covenant Transport have not been reported in litigation with Pilot, why is Uncle imposing his zeal on the free market players in Knoxville? The quote from Lamennais about the perils of centralization on the thinking processes of bureaucracy seems borne out.‡ 

— National supervision remains a necessity, even though federal standards of right and wrong are increasingly suspect. Congress wrote the statute that is alleged to have been violated. Is the statute strict liability? In other words, does the statute require mens rea, or guilty mind, to be prosecuted? Or does one simply have to commit an offense, not meaning to, and absent any intent, and be subject to prosecution? Congress knows that the “creation of a crime must be reasonably necessary to the prevention of a manifest or anticipated evil, or must be reasonably related to the protection of the public health, safety, or welfare, and the statute at issue must not be arbitrary or unreasonable in its classification.” What is the public safety interest in Pilot Flying J? 

Local economy, here and in Knoxville, remains at the mercy of a most unrepresentative body, the Congress, whose enforcers from the executive branch, the IRS and FBI, conform to its grandiose worldview. 

— David Tulis is host of Nooganomics.com, a talk show 1 to 3 p.m. weekdays at 1240 Copperhead AM radio that covers local economy and free markets in Chattanooga and beyond. The show streams live.


‡ ”Centralization brings apoplexy at the center and paralysis at the extremities.”
Sources: “FBI raid on Pilot Flying J stems from unpaid cash rebates, CEO says,” Memphis Commercial Appeal, April 16, 2013
“Pilot Flying J CEO Jimmy Haslam: Raid part of criminal investigation into rebates to trucking customers,” Knoxnews.com, April 16, 203
Criminal law, American Jurisprudence 2d, vol. 21, West Group, 1998, 2006 suppl.

Shine The Light On IDB Board Members

The recent news that IDB member Chris Ramsey is not a city resident makes me wonder what kind of accountability do these people have to the taxpayers? I've posed the question before: Who is on the board? Since it is such a mystery as to who is on the board and whether they are even legitimately qualified to sit on the board, how can they be trusted to handle millions of taxpayer ... (click for more)

Immigration

Remember when Jesus said, “Suffer the little children to come unto me and forbid them not, except for those brown-skinned Spanish-speaking children from south of the Rio Grande”? Yea, me neither. But you’d pressed hard-pressed to find any among the Republican Tea Party crowd who don’t believe (or at least wish strongly enough to believe, which is good enough for $COTU$) ... (click for more)

Rhasean Lowry, 34, Charged In Death of 3-Year-Old Girl

Rhasean Lowry, 34, was arrested for abusing a three-year-old girl, and then criminal homicide after she died. Last Tuesday, the Chattanooga Police Department was called on a suspected child abuse case. Lowry took the victim to a local hospital and he stated the victim fell down steps. Doctors advised that the victim’s injuries were the result of blunt force trauma consistent ... (click for more)

City IDB Member Who Made Motion For $9 Million Black Creek TIF Had Not Lived In City For Years

A City Industrial Development Board (IDB) member who made the motion to approve a controversial $9 million Black Creek Tax Increment Financing (TIF) had not lived in the city for years, City Attorney Wade Hinton confirmed. Chris Ramsey, a BlueCross BlueShield official, was not present at an IDB meeting on Tuesday morning. Five other board members were. Citizen Helen Burns ... (click for more)

Fast-Starting Vols Gear Up For Another Mobile QB

KNOXVILLE, Tenn. – It’s a new week for Tennessee’s football team, but the challenge that awaits in Neyland Stadium on Saturday afternoon will be a familiar reminder of the one the Volunteers just completed. The Volunteers have a short week to prepare for Arkansas State, a team much like Utah State, which relies heavily on a dual-threat quarterback and a physical front line. ... (click for more)

Chris O'Brien And Andres Santiago Named To Southern League's Weekly Honors

Tuesday, the Southern League announced that Chattanooga Lookouts’ catcher Chris O’Brien has been named Southern League Player of the Week and pitcher Andres Santiago was named the Southern League Pitcher of the Week for the period of August 25-September 1.  O’Brien is the fourth Chattanooga Lookouts’ position player to earn a weekly accolade from the league this season while ... (click for more)