JACKSONVILLE, Fla. — “I am not at all surprised, I don’t think anyone is surprised.”
David Miller, former director of OurJax.com, a citizens group formed to fight the sale of JEA, welcomed Monday’s criminal indictment against two former top executives. But he’s not convinced this is the end of the saga.
“We wouldn’t be surprised if there are other developments that come from this.”
The indictment, handed down last week and unsealed today, come after a more than two-year federal investigation. It charges former JEA CEO Aaron Zahn and former JEA CFO Ryan Wannemacher with conspiracy and fraud.
Prosecutors allege the pair “did knowingly and willfully combine, conspire, confederate and agree with each other … to embezzle steal, obtain by fraud and otherwise … convert to their own use” city assets.
Both declined comment.
The men are accused of crafting a lucrative bonus scheme to enrich themselves, and attempting to hide the costs from the JEA Board, and the public.
“There was a lot of work to be done untangling the web of misinformation put out there,” Miller says, crediting prosecutors as well as Florida Times-Union reporters Nate Monroe David Bauerlein and Mark Woods. “If it wasn’t for that, not only would this [indictment] not have happened, it’s likely the JEA could have been sold.”
Monroe told First Coast News he’s “proud of the work that we did,” but added, “We don't want to celebrate over someone's bad day, and certainly indictments are things that are very serious. And you know, Aaron Zahn and Ryan Wanamaker are looking at some potential real consequences.”
The men each face up to 25 years in federal prison if convicted of both charges.
The 29-page indictment details not just the criminal charges, but what is presented as a predicate fraud -- the effort to sell the 55-year-old city utility.
“They’re kind of two fraud schemes that are outlined in this indictment,” Monroe says. “There is the bonus plan. But there is also this kind of this broader argument that Zahn put together about why it was so important for JEA to privatize. Prosecutors are, in pretty blunt terms, saying that all of that was nonsense. All of it was fraudulent.”
Miller notes the potential sale was presented as an urgent need to forestall disaster. “They laid out what was essentially the ‘death spiral.' They were communicating that JEA was going to fail, and there were going to be tremendous rate increases for consumers, and tons of layoffs, to try to create a story where they're going to have to sell the utility.”
A sale of the utility would be necessary to boost the value of the Performance Unit Plan, which the indictment says was crafted by Zahn and Wannemacher.
“The people who are now being indicted potentially stood to reap hundreds of millions of dollars, absolutely obscene amounts of money,” says Miller.
Mayor Lenny Curry, who appointed Zahn and pushed for the sale process to continue even as questions surfaced, issued a statement. “My administration has, and will continue, to cooperate with all official inquiries into the management of our local utility. Beyond that, I will reserve further comment at this time out of respect for the ongoing legal process.”
The fact that the city came so close to actually selling the utility, Miller says, is in some ways a reflection on the city itself.
“There is a tendency in Jacksonville to fall in line. … We spend a few minutes it seems like coming up with the ‘best decision,’ and then spend all our energy trying to muscle everyone into you falling in line with that decision. I think that's just that's not helpful.”
Monroe agrees. “Not a single resident of this city, asked this mayor to pursue selling that utility to a private operator,” he says. “It may have not been popular with the public. But it was it was quite lucrative, and I would say not unpopular with our consulting/lobbying class of the city. So I think in a way this indictment was an indictment of our political culture in the city.”
Zahn and Wannemacher are due in federal court Tuesday at 2:30.