JACKSONVILLE, Fla. – With less than three weeks until former JEA CEO Aaron Zahn faces trial on criminal charges of conspiracy and wire fraud, conflicting stories are emerging about the scuttled sale of the city-owned utility in 2019.
During a pretrial hearing Wednesday, a lawyer who had been working for JEA and the city on matters related to the utility’s future told the court that Zahn told him that “the mayor” was supportive of the then-CEO receiving up to $40 million, in the event the utility were recapitalized or sold.
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At the time JEA was exploring a potential sale, Jacksonville’s mayor was Lenny Curry. Curry had appointed Zahn to JEA’s board, prior to Zahn becoming interim CEO and then permanent CEO.
When reached by News4JAX following the hearing, Curry gave a three-word response to Zahn’s statement as relayed in testimony: “That never happened.”
Curry has never been charged in connection with the JEA sale and has not been accused of any wrongdoing.
The New York-based lawyer, Stephen Amdur of Pillsbury Winthrop, testified how the firm started working with JEA earlier in 2019, on matters around its strategic planning process. Amdur recounted a phone conversation he had with Zahn – a former roommate from their time as college students at Yale – where the utility CEO discussed the logistics of a potential long-term incentive plan for JEA, and where Zahn stated that the mayor was supportive of him receiving the multi-million dollar payout in connection with a sale. Amdur testified that Zahn expressed mayoral support of other executives receiving up to $10 million in the same scenario. When prosecutors asked Amdur his response to Zahn’s assertion, he said, “my exact words to him were, ‘OK.’”
Wednesday’s hearing was the second of two days of hearings held in January, ahead of the upcoming trial for Zahn and Ryan Wannemacher, his former chief financial officer, who faces the same charges. During these hearings, prosecutors called some of the witnesses they will be calling at trial, as part of a process to determine whether any of their testimony was impacted by statements that Zahn and Wannemacher gave to city attorneys in January 2020.
At the time, city attorneys were investigating whether Zahn could be fired with cause, and as the two were required to sit for the interviews, their statements can’t be used against them in a criminal case. During the hearings, attorneys had a chance to ask about their exposure to those statements, and whether there was any effect on their testimony. They were not permitted to question the prosecution witnesses about the substance of their testimony – a cross-examination that will be reserved for trial.
Other witnesses Wednesday included two of the outside consultants who had worked with JEA during its strategic planning process and process to develop a long-term incentive plan. One consultant, David Wathen of Willis Towers Watson, which worked on the incentive plan, testified that during discussions in April 2019, the estimated cost of the plan, known as the performance unit plan, was $4 million. Prosecutors then showed spreadsheets with calculations showing that if the utility were sold, and the value to the city increased by several billion dollars, the payouts under the plan would jump to $345 million. Wathen stated that at the time the PUP was being developed, he was not aware of the $345 million figure.
Another witness at Wednesday’s hearing was former JEA board member April Green, who was board chair at the time of the July 23, 2019 meeting. After prosecutors presented the spreadsheet with the $345 million payout calculation, she stated that had she known of that value, she would not have approved the plan, saying, “it’s just an astronomical number and more explanation would have been needed.”
While Zahn and Wannemacher’s trial was originally scheduled to begin February 5, this week, the judge overseeing the trial delayed its start to Feb. 20, following defense requests. Jury selection is scheduled to take place on Feb. 15 and 16. A separate jury will be seated for each defendant.