The campaign of Democratic gubernatorial nominee Mike McWherter charged Friday that Republican nominee Bill Haslam has been disengenuous with voters about the nature of the Haslam family business and said financial ties of the family's business partner include links to Iran.
The McWherter campaign offered no evidence to back up the claim about Iran. Nor did it say what the nature of that business connection would be.
"The Haslams sold half of their Pilot oil empire to CVC Capital establishing an equal governance partnership with a company that also invests in other companies with direct business dealings in the country of Iran," said Shelby White, spokesman for the McWherter campaign.
White was responding to a series of questions presented in the wake of Tuesday night's debate between Haslam and McWherter at Tennessee Tech University in Cookeville.
McWherter in that debate raised the issue of the Haslam family's financial ties, saying the family's company, Pilot Corp., was linked to a business headquartered in Luxembourg. That business is CVC Capital Partners, a large global private equity firm, which does have its headquarters in Luxembourg, with offices in Europe, Asia and the United States. CVC says it is invested in 51 companies worldwide.
CVC Capital Partners obtained a 47.5 percent stake in the operations of Pilot Travel Centers, part of Pilot Corp., the Haslam family business, in a deal announced Sept. 30, 2008. The deal was for Pilot to hold the other 52.5 percent. The arrangement included an "equal governance" structure, which applies to decisions such as the operating budget, capital budget and hiring and firing executives, according to a spokeswoman for Pilot on Thursday. Since that deal, Pilot has merged with the Flying J travel plazas to form Pilot Flying J, although it has been unclear if the structure of the board changed with the merger with Flying J.
When contacted about the McWherter campaign's claims, David Smith, a spokesman for the Haslam campaign, called the charge "ridiculous" and said McWherter should be focused on other issues.
"Mike's anti-business tone continues to surprise everyone," Smith said. "He needs to spend more time focused on learning how the budget works than he does making ridiculous charges against one of Tennessee's most prominent national headquarters frequently praised by his father."
McWherter's father is former Gov. Ned McWherter.
Pilot has become a hot-button issue in the campaign since Haslam first declined in December 2009 to disclose his income from Pilot, as requested by the Tennessee Newspaper Network, comprised of the four major newspapers in the state -- The Chattanooga Times Free Press, The Commercial Appeal in Memphis, The Tennessean in Nashville and the Knoxville News-Sentinel.
"Bill Haslam's lack of disclosure has raised more questions than answers about his business interests," White said. "He is only now talking about CVC because the McWherter campaign and the media have raised the question.
"What else is he not telling us about his big oil ties?"
Haslam's opponents in the Republican primary attempted to raise questions about the nature of the Haslam family business, primarily as a point to suggest Haslam would have a conflict of interest if he were elected governor.
"Mayor Haslam has been extremely disingenuous with the voters of Tennessee about the ownership structure of Pilot and will not give a straight answer when asked a simple question about who controls the company," White said Friday.
Haslam responded to McWherter's raising of the ownership issue in Tuesday's debate by saying equity investors had part of the truck stop business as did members of a family in Utah. But Haslam deflected the question by retorting to McWherter that the Democratic nominee, a Jackson beer distributor, had ties to Anheuser-Busch InBev, owned by a Belgian company with executives from Brazil. Haslam said, given those ties of McWherter, he didn't see what the big issue was about his family's business ownership. McWherter responded after the debate that he owns no stock in Anheuser-Busch.
Bill Haslam, the mayor of Knoxville, is a former executive with Pilot. The business is currently run by Bill Haslam's brother, James Haslam III, and was founded by their father, James Haslam II. The family, in addition to being among the wealthiest families in the state, is known for its political influence, philanthropy and close ties with the University of Tennessee.
James Haslam II has said he would stack up Pilot's reputation with any company. Bill Haslam has repeatedly responded to critics by asking if they would prefer not to have Pilot headquartered in the state. Pilot Corp., which separately owns a group of convenience stores apart from its partnership with CVC on the truck stops, is owned entirely by members of the Haslam family.
"Clearly Bill Haslam hasn't been up front with Pilot's ties to this Luxembourg-based company," White said. "He hasn't mentioned CVC or any other business partners once along the campaign trail.
"The voters of Tennessee deserve to know who the governor of Tennessee is doing business with. Bill Haslam has made it clear that he will not disclose his holdings or place his assets in a blind trust if elected."
While Haslam has said he and his wife Crissy would not put their holdings in Pilot into a blind trust, they would put other investments in a blind trust if he is elected governor.
White also challenged Haslam on his reference to Pilot being a Tennessee company.
"Bill continues to refer to his oil empire as a Tennessee company, but Pilot is in fact incorporated in Delaware, a state known to be a tax haven," White said. "Tennesseans deserve a straight answer."
The Tennessean reported on Aug. 15 that Pilot is incorporated in Delaware and that Bill Haslam as governor would have a stake in a potential legislative crackdown on companies that use Delaware and other states as tax havens.
White seized on what can sometimes be a confusing account of the structure of the Haslam business.
"Bill Haslam will not give a straight answer about Pilot and continues to play a deceitful shell game with regard to his business interests," White said. "A simple Google search of Pilot Corporation leads visitors to Pilot Travel Centers, which is it?"
The Haslam campaign explained on Thursday that Pilot Corp. is fully owned by the Haslam family and that Pilot fully owns a group of convenience stores, primarily in East Tennessee. It shares ownership in the Pilot Travel Centers with its equity partners but has management control of the business, the campaign said. A campaign spokesman noted that the partnership with equity investors came with well-publicized announcements. The campaign also said the structure is "fairly normal in businesses of this scale" and said it is correct to think of Pilot as a family owned business.
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