He seemed, to some, low-key, almost humble, an unlikely future CEO of a Fortune 500 company. Some who watched James L. Miller move up in food service distribution say they never would have singled him out as one who would rise so far.
Now Miller, credited nearly single-handedly with building U.S. Foodservice of Columbia into the nation's second-largest restaurant and institutional supplier, finds himself at the epicenter of an international accounting scandal that has engulfed the company's parent, Dutch supermarket conglomerate Royal Ahold NV. To the surprise of many, Miller, 54, is not only still in charge but has increased his control of day-to-day management.
Royal Ahold's Feb. 24 disclosure that accounting irregularities at U.S. Foodservice, which it bought in March 2000, had led it to overstate profits by at least $500 million over two years made headlines on both sides of the Atlantic.
Shares of Royal Ahold, which also owns Landover-based Giant Food Inc., plunged more than 60 percent. The top two executives in the Netherlands resigned. Two key U.S. Foodservice executives, including Miller protege Mark Kaiser, chief marketing officer, and Tim Lee, a purchasing executive, were suspended. At the company's suburban office park headquarters, teams of federal investigators and forensic accountants are poring over U.S. Foodservice's books.
At issue is the way the company booked rebates or discounts vendors paid U.S. Foodservice in exchange for high-volume purchases. Investigators reportedly are probing whether the company booked more rebates and discounts from vendors than it actually received and improperly recorded them as revenue. Attorneys for the two suspended executives, Kaiser and Lee, did not return phone calls seeking comment.
Miller declined requests for an interview, but a company source said he feels "angry and disappointed" that "a determined party" violated a long-standing company accounting policy. "People let him down."
Miller feels responsible that the problems occurred on his watch, said a former U.S. Foodservice senior executive who spoke on condition he not be identified. "He's determined to get to the heart of the matter and straighten this out. I think he feels betrayed."
Before the turmoil at Royal Ahold, Miller had become well-known in the food industry. In nearly 14 years, he transformed an obscure, $600 million Columbia distributor into a $17.5 billion powerhouse with 28,000 employees - a national distributor of food and supplies to restaurants, hospitals and schools second only to industry leader Sysco. He did so, according to several business associates, by squeezing suppliers, pushing his sales force and methodically plotting out acquisitions, sometimes patiently courting smaller distributors for years.
Born in Waverly, N.Y., Miller grew up in and around military bases in California, Hawaii and the Carolinas where his father was serving. He made food distribution his life's work, and it, in turn, made him a multimillionaire. He's driven, some say, by the desire to run the nation's most profitable food distributor.
Charismatic and personable, as well as entrepreneurial, he's known to remember the names of employees in distribution centers he visits around the country. And he doesn't hesitate to use that network to pick up the phone and check on what's going on several layers below him.
Miller has never been an ivory-tower executive; he could never sit still in his office for long, associates said. Instead, he'd roam the halls of the building and take walks around the parking lot once or twice a day, often with Kaiser or David Abramson, the company's general counsel, to conduct business and work off stress.
Miller, who lives in a sprawling house on 5 acres in Fulton, is also described by acquaintances as intensely private, rarely discussing his upbringing or family. He shuns the limelight, appearing more comfortable one-on-one or in small groups than leading large gatherings. He feels most at home either on the golf course or on his own turf, walking one of his distribution centers or in front of customers, colleagues and business associates said.
"He's extremely gifted, a very good marketer," said Edouard Aubin, a food retail analyst for Deutsche Bank in New York. "If you listen to him, he has some charisma. Usually investors tend to appreciate him."
Miller's food service career began in 1972 at Sysco, now his company's biggest rival, where he worked in warehouse and distribution services, then as a vice president of sales. While working at Sysco in 1978, he earned a labor/liberal arts certificate from Cornell University. He moved in 1983 to food distributor PYA/Monarch, then a wholly owned subsidiary of Sara Lee Corp., where he became executive vice president and the northern division's chief operating officer.