On the day before the NFL draft, the league has growing concerns that the Cleveland Browns have more serious issues than which players they will select. They may soon need a new owner.
In a talk with the media in New York on Wednesday, NFL commissioner Roger Goodell put a positive spin on his meeting with Cleveland owner Jimmy Haslam, whose Pilot Flying J company is under federal investigation.
However, there are serious concerns among team and league officials that Haslam's problems might portend the need for a change in ownership. One NFL team executive told The Sports Xchange that Haslam should at least relinquish day-to-day control of the Browns during the investigation and that suggestion has been made to league officials.
At issue are allegations that Haslam was aware that Pilot Flying J was intentionally defrauding customers by shorting them on rebates which, according to one company vice president, raked in $450,000 a month.
The issue became big news when federal investigators and the Internal Revenue Service announced that the truck stop chain and several key employees were the subject of an investigation. The Pilot Flying J headquarters in Knoxville, Tenn., were raided by federal and IRS investigators and locked down.
Haslam said this week that he placed several members of the Pilot administrative staff on leave while the legal matter is rectified. Haslam said an independent investigation of "what did or did not happen" is under way and could be completed by July.
Goodell told reporters that the investigation came as a huge surprise to the NFL. He said the league was unaware of the FBI and IRS investigations of Pilot Flying J last year before Haslam purchased the Browns from Randy Lerner for more than $1 billion.
"It's an investigation, and it was held very tightly by the FBI and the authorities," Goodell said Wednesday. "They didn't share this information with us, and they shouldn't. That's something that is their prerogative."
According to testimony in documents secured by the Cleveland Plain Dealer, Haslam had knowledge of a scheme within Pilot.
John Freemen, a company vice president, was quoted saying that Haslam "knew all along that I was cost-plussin' this guy. He knew it all along. Loved it. We were makin' $450,000 on him. Why wouldn't he love it."
Haslam ranks No. 360 on Forbes' list of wealthiest Americans. Most of his fortune comes from his 35 percent share of the family's 59 percent ownership in the privately held company, according to Forbes.
Haslam's purchase of the Browns was approved last October, giving him 70 percent of the team and the ability to buy the remaining 30 percent from Lerner over the next four years.
However, Haslam's ability to get that future money may already have been compromised.
In reaction to the FBI and IRS investigation, the ratings service agency Moody's Investors Service told the Plain Dealer that it has placed Pilot Travel Centers, Haslam's parent company, on review for a ratings downgrade, which would make money more expensive and more difficult to acquire.