Southern Man

By the time Clevelanders locked eyes on Jimmy Haslam III, it was love at first sight.

Advance word that the Tennessee businessman was about to purchase the Cleveland Browns was enough to defibrillate the hopes of a flatlined fan base. When he finally appeared in person at last week’s press conference in Berea, Haslam offered a stark contrast to the previous ownership. Glowing with Good Ol’ Boy charisma, he twanged his way through remarks that failed to cough up any specifics on the future yet hit all the right notes: The team is staying in Cleveland, and it’s going to be a winner again.

Whether he makes good on his promises remains to be seen. In the meantime, the local media has been polishing up the Tennessean’s image as yet another sports savior arriving in town. But even though the romance is in full bloom, a thorough shakedown of Haslam’s bio suggests that it’s an odd match.

The Browns declined Scene‘s request for an interview with the new owner, citing a busy schedule. Still, this much is clear: Jimmy Haslam is an honorable Southern gentleman arriving in the gritty Rust Belt; a Republican power broker putting down new roots in a Democrat stronghold; and a proven operator inheriting tough odds. With Clevelanders more comfortable casting owners in the villain’s role, the warm feelings could ice over quickly.

Then again, what if he wins?

Success down South isn’t so much defined by overflowing bank accounts and stock options as by laying down the tracks for a family dynasty. What’s remarkable about the Haslams is that they have done it in just two generations, with a savvy combination of hard-charging business skills, community esteem, and political power.

The family story starts with Jimmy’s father and namesake, James A. “Big Jim” Haslam II. The patriarch founded his Southern dynasty in the most appropriate way: as a college football hero. He played tackle on the 1951 national champion University of Tennessee squad helmed by legendary coach General Robert Neyland, which in Tennessee is like saying you had preferred seating at the Last Supper.

Big Jim found similar success in the world of business after starting Pilot Corp. in 1958 with a single gas station. The chain ballooned over the years along with the nation’s interstate highways, fueled by strategic business alliances and aggressive expansion, done largely under the watchful eye of heir apparent Jimmy.

Because Pilot is a private company, the exact dimensions of the family’s wealth remain unknown. But the question became an issue when Jimmy’s younger brother Bill, who served as mayor of Knoxville for eight years, ran for and won the governor’s seat in Tennessee in 2010. The youngest Haslam refused to reveal anything about his personal finances, a weak spot that his opponents exploited.

“During the campaign, we used the term ‘billionaire’ to describe Governor Haslam, and he seemed to take offense to it at the time,” says Kim Sassar Hayden, a Tennessee Democrat operative who ran the campaign of Haslam’s opponent, Mike McWherter. “So he did not like being described as a billionaire. But clearly, the family has that kind of money.”

The year before the campaign, Forbes had already listed Pilot as the 14th largest private company in the country, one spot below the company’s largest competitor, Utah-based Flying J. A year later, the two companies inked a merger, and according to Forbes, the new corporate behemoth — Pilot Flying J — posted more than $17 billion in sales in its first year of operation.

While the Haslam family built up their corporate empire, they were just as active building a community profile in Tennessee, particularly on the UT campus in Knoxville. Big Jim was appointed to the UT Board of Trustees in 1980, a spot he held for 27 years; the patriarch’s relationship with the school peaked in 2006 with a record-setting $32.5 million gift. That kind of largesse has helped to create unmitigated adoration.

“Absolutely outstanding people,” says Don C. Stansberry Jr., the vice-chair of the UT Board of Trustees. “They’re generous, they’re helpful, they’re very community-oriented. There is nothing worthwhile going on in Knoxville or UT that they’re not making a big contribution to. Anything worthwhile, you’ll see them in it. And they never ask for anything.”

“They’ve probably helped the University of Tennessee raise more money and given more money than any alumni family that we have,” adds Doug Horne, a Knoxville entrepreneur and former head of the Tennessee Democratic Party who also sits on UT’s board.

But the corporate success underlying the family’s philanthropic activities has not been unblemished. In 2005, according to the Knoxville News Sentinel, Pilot reached an agreement with the U.S. Department of Labor to pay $720,000 in overtime wages that employees had not been paid.

In 2008, after hurricanes disrupted Gulf Coast refineries, Pilot was one of 16 gas retailers accused of jacking up the pump prices in the wake of the subsequent gas shortage. The company paid fines in Tennessee, Kentucky, and Georgia. The allegations became an issue for Bill Haslam in the primary and general elections in the 2010 gubernatorial race. Both Bill and Jimmy maintained the price spike was due to honest mistakes, and Jimmy later complained that the penalties had been hijacked by political opportunists.

“So did we violate the law? Yes, we did,” he told the Knoxville News Sentinel in 2011. “OK? Absolutely no doubt, and I’ve never said we didn’t. Is that price-gouging, and does it really stick in my craw when Bill’s opponents bring that up and rub our name across the dirt? It makes me mad as hell, because we’ve made our reputation by having the lowest price, whether it be gasoline in Knoxville or diesel across the country.”

The Pliot-Flying J merger was also mired in red tape. The Federal Trade Commission initially opposed the consolidation on the grounds that it put too much of the market in one set of hands. By the end of 2009, the government was planning to block the merger, and Pilot representatives reportedly spent the first half of 2010 personally lobbying the FTC commissioners. By summer, an agreement was reached whereby the new Pilot Flying J would sell off 26 travel centers in order to balance the playing field.

But the FTC’s change of heart didn’t sit well with Pilot’s largest competitor left standing, TravelCenters of America, which is based in Westlake. In an interview with the Knoxville News Sentinel, Jimmy Haslam accused the company of filling the FTC’s ear with bad information and ideas regarding the Pilot-Flying J marriage. “A couple of our competitors, particularly one, was adamant against letting this [merger] happen and was going to do everything they can to keep that from happening,” he told the paper.

Alongside philanthropy and business, Republican politics is the third leg propping up the Haslam dynasty. The family has a long track record of tossing money to GOP candidates and causes, which has helped it develop a number of close relationships with high-profile Republican politicians, including current presidential candidate Mitt Romney. The family’s political contributions have even extended into the Buckeye state.

Big Jim has worked as a fundraiser for the campaigns of prominent Tennessee politicians such as Howard Baker, Bill Frist, and Lamar Alexander. He was also heavily involved in raising money for George W. Bush’s presidential campaigns. In 2000, he was a Pioneer, raising more than $100,000 for Bush. In 2004, he was a Ranger, raising more than $200,000. According to Texans for Public Justice, the 2000 Bush presidential campaign reimbursed Pilot Corp. $3,800 for rides that Bush took on its corporate jets.

According to The Washington Post, between 1988 and 2004, Big Jim himself donated a total of $728,437 to Bush, other Republican candidates and the Republican party. In 2002, Bush appointed him to a seat on the Advisory Committee on the Arts at the Kennedy Center in Washington, D.C.

His son Jimmy’s political roots go back to his college days at UT, when he roomed with Bob Corker. In 2006, Jimmy was the campaign chair for Corker’s successful Senate race in Tennessee.

Like many donors, Jimmy spreads his bets. In 2000 he hosted a fundraiser for Rudy Giuliani when he was running against Hillary Rodham Clinton for a New York Senate seat. After George W. Bush was elected President that year, he named Jimmy to his Commerce Department transition team. In 2004, Jimmy served as the Tennessee finance chair of Bush’s presidential campaign.

According to campaign finance records, between February 2011 and June 2012, Jimmy gave more than $120,000 to GOP candidates and organizations. The largest donations included $61,600 to the National Republican Senatorial Committee and $25,000 to the Republican National Committee. (During that same period of time, his father contributed $80,000 to GOP candidates and causes.)

The list of individual candidates receiving Jimmy Haslam’s largesse includes Romney and Corker, as well as Maine Senator Olympia Snow, Virginia Senate candidate George Allen, and Massachusetts Senator Scott Brown. Interestingly, Haslam has also cut checks totaling $3,500 for Ohio Senate candidate Josh Mandel — to date, his only Ohio contribution.

And should Romney win in November, the Haslam family will have an important friend in the White House. The GOP presidential candidate endorsed Bill Haslam’s run for governor in 2010, and Romney’s PAC donated to his campaign. Last November, the Romney camp announced that Big Jim would be a state chair of the candidate’s current presidential campaign in Tennessee. In February, Jimmy released a statement officially endorsing Romney.

What does all this mean for Cleveland? Haslam may be an unlikely hero for the city’s beleaguered sports fans, but one theme is constant: Whether bagging a corporate merger or helping his candidate win, he gets results. Those who know Haslam best expect no less from his new team.

“I seriously doubt that Jimmy Haslam bought it to watch it lose,” UT’s Stansberry says. “You will get a real hard effort to win.”

This article appears in Aug 8-14, 2012.