CHATTANOOGA, Tenn. - The former president of the nation’s largest diesel fuel retailer was captured on secret recordings making what a judge on Thursday described as “vile, despicable, inflammatory racial epithets” that disparaged “the entire population of Cleveland, Ohio,” Oakland, Calif., and the football team his then-boss owns.
Not only did U.S. District Judge Curtis Collier, who is black, reveal for the first time Thursday what had been kept under seal about former Pilot Flying J President Mark Hazelwood, but he also announced that he would let jurors in the ongoing fraud conspiracy case against Hazelwood and three other ex-employees hear the recordings.
That bombshell came late afternoon and spurred a flurry of reaction from both prosecutors and defense attorneys in the case, including questions about whether Hazelwood’s co-defendants in the trial should be forced to continue to stand trial alongside him. Because of that, Collier is keeping all documents related to those secret recordings under seal – for now - and delayed an airing of them in court until the trial resumes in January.
'Beyond the pale'
But Collier gave a broad description of what those recordings detailed. The recordings were made by former Pilot Flying J salesman Vincent Greco, who had turned FBI mole. Collier indicated Hazelwood’s remarks were made in the presence of a team of Pilot Flying J sales executives who have since confessed defrauding trucking companies of promised discounts on diesel fuel.
“Mr. Hazelwood’s utterances are beyond the pale,” Collier said. “Several subordinates of Mr. Hazelwood were present. Mr. Hazelwood was in a position of authority over them.”
Pilot Flying J issued a statement Thursday evening on the recordings.
“The tapes described in court today, recorded over five years ago and involving former sales representatives of Pilot Flying J, are saddening and troubling,” the statement read. “This kind of behavior is not acceptable, tolerated or reflective of the values of the company. No current team member of Pilot Flying J was present or participated in these conversations.”
Collier said Hazelwood and various sales executives made racially offensive and disparaging comments about “the entire population of Cleveland, Ohio,” as well as the Cleveland Browns and the city of Oakland, Calif. He did not elaborate on the specifics.
'Vile, despicable, inflammatory'
Pilot Flying J Chief Executive Officer Jimmy Haslam owns the Cleveland Browns. Haslam is not charged in the fraud conspiracy and has denied knowledge of it.
The judge said that if the recordings or the contents of those recordings had been made public while Hazelwood was still president of Pilot Flying J, black employees who had been fired “might have determined their terminations” were because of their race and sued, and customers would have been outraged.
“If it became known the president of Pilot engaged in vile, despicable, inflammatory racial epithets against African Americans, this could lead to boycotts and protests,” Collier said.
Collier said Hazelwood and his subordinates also disparaged women in the secret recordings. It is not yet clear exactly when the recordings were made or in what setting.
Battle in secret - until now
But the recordings, Collier said, are relevant to the trial because Hazelwood’s defense team has sought to portray Hazelwood as too savvy a businessman to risk “taking down” Pilot Flying J by condoning or participating in a fraud scheme.
Prosecutors Trey Hamilton and David Lewen have been seeking to play those recordings for weeks now, but all documents about that had been sealed and hearings held in chambers, so it was not clear until Thursday exactly what the prosecutors wanted jurors to hear about Hazelwood.
According to Collier, Hamilton again pressed to play the recordings this week as defense attorney Rusty Hardin, who represents Hazelwood, used his cross-examination of former Pilot Flying J director of national accounts Brian Mosher to try to paint Mosher and other sales executives who have pleaded guilty in the case as a band of renegades who engaged in fraud without Hazelwood’s knowledge or blessing.
Collier had refused Hamilton’s earlier bid to play the recordings – without any public airing of why he refused or what the recordings contained. It’s not clear what changed his mind, but he said in a ruling from the bench that he now believes jurors should hear them.
He explained that Hardin has repeatedly asserted through his questioning of witnesses that Hazelwood was too skilled a businessman to ever engage in conduct that would harm Pilot Flying J’s reputation or business, and that prosecutors have a right to try to contradict that notion with the secret recordings.
Legal disarray
Defense attorney Ben Vernia, who represents regional account representative Heather Jones, told Collier he wanted time to research the law to determine if she and another account representative on trial in the case – Karen Mann – should be tried separately so as not to be painted with the same brush as Hazelwood.
Jones and Mann served as support staff for sales executives and contend they didn’t intend to defraud trucking companies and instead were simply acting on the orders of their bosses.
Also on trial is former vice president Scott “Scooter” Wombold. His defense team did not address in court Thursday whether they, too, would seek a separate trial. It wasn’t immediately clear if Wombold is also captured on those secret recordings.
Hamilton told Collier that his boss – newly appointed U.S. Attorney Doug Overbey – wants him and Lewen to also consider the legality and legal prudence of separating the trials of Mann and Jones from Hazelwood and Wombold. Because of that, he, too, sought a delay in playing the recordings for jurors and asked to keep all documents about the recordings under seal until that issue is addressed.
Collier had already decided to recess the trial until Jan. 10. He told jurors at day’s end Thursday only that it was particularly important that they continue to avoid any media coverage or community talk about the case. He made no mention to them of the recordings.
Hazelwood and the three other defendants are accused in a $92 million fraud scheme in which trucking companies were lured to switch their business to Pilot Flying J with promises of big discounts that sales executives never intended to pay. Mosher and 13 other former staffers have pleaded guilty, and two more, including Greco, were granted immunity.