Browns’ Jimmy Haslam being investigated over Berkshire Hathaway bribery claims
Browns owner Jimmy Haslam is being investigated over claims from Warren Buffett’s Berkshire Hathaway that he attempted to bribe employees of Pilot Travel Center to boost profits this year with the intent of reaching a greater sale price of the business.
A lawyer for Pilot revealed that Haslam is being probed by federal prosecutors during a hearing in a civil suit between Haslam and Berkshire, Bloomberg reported earlier this week.
Berkshire began acquiring Pilot, a chain of truck stops and gas stations, in 2017, and currently owns 80 percent of the company.
The Haslam family has an annual option to sell the remaining 20 percent of Pilot based on a valuation of 10 times the previous year’s EBIT (Earnings Before Interest and Taxes), a common measure of profit.
While this would seem to be pretty straightforward, the sides are at odds based on accounting methods and different incentives.
In the short run, Berkshire would prefer the profits and thus the required purchase price to be lower, whereas the Haslam family would want the opposite.
Haslam, the son of Pilot founder Jim Haslam, did not respond to a request from Bloomberg about the apparent federal investigation, but his attorneys vehemently denied the claims when they first arose.
“We called Berkshire’s allegations wild inventions in our opposition brief,” Haslam family attorney Anitha Reddy said earlier this month, according to the Associated Press. “I don’t think we could have been clearer that we dispute them. And if there is any doubt in Berkshire’s mind, we think they’re false and we intend to defeat them on whatever schedule the court orders.”
The AP had previously reported that Berkshire alleged that Haslam had tried to bribe “at least 15” Pilot executives with millions of dollars for there to be higher profits at the company in 2023.
In more welcome news for Haslam, prosecutors in the civil case ruled that Berkshire’s claims of bribery were not relevant to the case, according to Yahoo Finance.
The Haslam family filed the original suit alleging that Berkshire was pushing down profits.
Pilot got in hot water last decade when it was discovered the chain had systematically shortchanged high-volume trucking customers out of their promised fuel rebates.
The company was forced to pay $92 million in criminal penalties.
Haslam denied knowledge of the scheme and was not prosecuted for it.
Earlier this year, Haslam purchased a 25 percent stake in the Milwaukee Bucks from New York financier Marc Lasry.
