JACKSONVILLE, Fla. – It was the 10th day of testimony on Tuesday in the trial involving two men involved in what some are saying was the biggest attempt to defraud the city of Jacksonville in history.
The trial revolves around the proposed sale of JEA and the millions of dollars top executives could have walked out the door with through a controversial bonus plan.
Former CEO Aaron Zahn and Chief Financial Officer Ryan Wannemacher are now charged with conspiracy and fraud.
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On Tuesday, city attorneys who worked with JEA on those plans testified they were not aware of how much money executives could make even though one of them could have made millions off of the plan.
Lynne Rhode, one of the city attorneys working with JEA, said her focus was on the legal end, not on the financial makeup and said in court she was not comfortable with the payout even though she could have made millions.
She became involved with JEA as a city attorney just before the plan was laid out about restructuring or a possible sale of JEA. She said she saw potential problems with the performance unit plan known as the “PUP.” She testified that when she first saw the plan presented she did not want to participate and thought it would be a waste of money.
Prosecutors asked her if she knew a $10 investment at the time could eventually net her $11,500 if JEA was sold and if that would have changed her mind. She answered it would have been uncomfortable.
She testified she was not aware of that until it was reported in the media and that’s when the plan unraveled.
Her boss, former General Counsel for Jacksonville Jason Gabriel, testified in the afternoon. He too said he was not aware at first that the the bonus plan could have paid out millions to executives and Rhode if it was approved. He was not happy about that.
In conversations and emails with JEA executives and his staff he learned the plan was new to the government and Gabriel said he had a gut feeling there were problems.
Gabriel said he had never seen anything like the plan before in city government. He did attend a meeting in November where Zahn and some of JEA’s outside lawyers were present.
Gabriel said Zahn told him, “Jason, if you are going to kill it, kill it.”
But that did not happen until days later when Zahn wrote a letter saying the plan was postponed indefinitely. Gabriel was concerned from that wording that it could be resurrected so when he responded with his own letter, he said if that were to happen there would need to be steps to make sure the payouts would not be so big.
Gaberial said he and Zahn did have a very heated conversation over the phone where profanities were tossed around when other ideas were discussed.
The trial is expected to continue for several more weeks.