JACKSONVILLE, Fla. — A verdict has been reached in the trial against two former JEA top executives. Former CEO, Aaron Zahn, has been found guilty, and former CFO, Ryan Wannemacher, has been found not guilty.
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This is a unique case. Both men are being tried at the same time, but each has their own jury.
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Zahn’s jury deliberated for just under seven hours. While, Wannemacher’s jury deliberated for about six hours Thursday, and continued into Friday. After 7 hours on Friday, they had their verdict.
On Thursday, the judge overseeing the case proposed to attorneys to seal the first verdict. He explained that he didn’t want one verdict to impact another, if the jury was released for the day. He stated this is a “high profile case” and he wanted to protect the integrity of the verdicts.
Zahn went home on Thursday night not knowing whether a jury had found him guilty or not guilty. Throughout the trial, when questioned by reporters after court, he maintains that he just wants to spend time with his family.
RELATED: Timeline: Failed sale of Jacksonville public utility JEA that led to indictment of former CEO, CFO
Both men were accused of conspiring to privatize the public utility company and make millions off the deal. Their attorneys argue it was a legitimate business plan, especially as solar becomes more popular. Federal prosecutors said Zahn and Wannemacher lied about the state of the utility company, “presenting the worst case scenario as fact.”
However, Zahn’s attorney said that is false and showed a video clip from a board meeting where Zahn stated, “we are not in a death spiral. We are looking at evolving JEA strategy.”
Some of the witnesses called by federal prosecutors stated they felt otherwise.
Jury selection began on February 15.
TRIAL BEGINS
Opening statements started on February 21. Assistant United States Attorney A. Tysen Duva said Zahn created a “false narrative” to set up a potential sale of JEA where he could have profited with tens of millions of dollars. Duva said Zahn and Wannemacher lied by “commission and omission” in convincing the board to approve a sale in 2019 before the whole plan blew up.
Eddie Suarez, Zahn’s attorney, described Zahn as a “visionary.” His ideas were put forth to help the utility, not hurt the utility. He explained that Zahn knew solar power could impact the number of utility customers in the future, and wanted to have a plan in place if it did. Wannemacher’s attorney said the former CFO was just doing his job, doing what Zahn told him to do.
Zahn was slated to make $40 million if he succeeded in selling the utility. Multiple witnesses said former Jacksonville Mayor Lenny Curry supported this. The former mayor’s spokesperson said, “never happened.” Prosecutors also said it was obvious that Curry and his office were behind Zahn becoming CEO with the intent to sell the utility, which isn’t a crime in of itself. Curry isn’t accused of any wrongdoing and he did not testify.
TESITMONY
Federal prosecutors planned to call 30 witnesses. We detailed some of the main testimony.
The first witness called in the trial was Paul McElroy, who served as CEO for JEA for 16 years until his 2018 retirement. Zahn took over after him. McElroy said the utility was in good financial health while he was CEO. He said he was “surprised and somewhat disappointed” when he heard the news Aaron Zahn was taking his place. Many believed Melissa Dykes, the former Chief Operating Officer, would be chosen instead. She did interview for the position, but Zahn was ultimately chosen.
Council Auditor, Kim Taylor, of the Jacksonville City Council Auditor’s Office took the stand on February 26. She discussed “concerns over a proposed JEA bonus plan, know as the ‘performance unit plan’ or PUP. She said it was uncapped and unlimited. Taylor said she wasn’t getting cooperation from Wannemacher when she started asking questions.
Melissa Dykes was called to testify on February 29. She said that she did interview for the CEO position, but ultimately was not chosen. She served as the interim CEO, until Zahn took over.
During her time at the utility, with Zahn as CEO, she said she was involved in multiple conversations about privatizing JEA, along with Zahn and Wannemacher. She said she knew there would be high pay-outs if the sale went through, however she didn’t think it would. On July 23, 2019, when the board voted in favor to start the process to potentially sell the utility, she said she was “very surprised.” Dykes explained that the resolution did not show a numerical amount. She said when she questioned Zahn about it, he “everybody who needs to understand it, understands it.”
Dykes said Zahn essentially promised her a higher position if the utility sale went through. During her testimony, she explained that he told her he wanted to step down if the utility was sold. She said she took that to mean “stick around and you’ll be CEO after this.” She said she had concerns and was uncomfortable about these conversations, but ultimately she never spoke up.
RELATED: JEA Trial: Bombshell testimony reveals that former JEA COO promised higher position after sale
On cross-examination, Suarez asked Dykes if she wanted to be CEO. She said she “had mixed feelings.” He asked her why she would have stayed after not getting the position. “I stayed because I believed in my team,” Dykes said. “I stayed because I believed in JEA. [I] thought our work was important.”
Suarez went on, stating Zahn agreed to ‘cross every T and ever I’ when it came to the sale of JEA. Dykes agreed with this statement. She also agreed with Suarez when he stated that it was known that financials and customer satisfaction were at an all time high.
The following week, Jason Gredell, a banker with JP Morgan said JEA tried to fast-track the deal, but it was a “complex transaction the equivalent of landing a 747 on an aircraft carrier during a hurricane.”
RELATED: JEA Trial: Bankers say they felt pressured to fast-track JEA utility sale
On March 7, Zahn’s former roommate, Aaron Amdur, testified. He testified that the former JEA CEO told him former Mayor Lenny Curry supported Zahn receiving millions from the sale of the utility. On cross-examination, the defense didn’t deny the conversation and said Zahn wasn’t trying to hide anything. Amdur also testified that Zahn said other executives would have received $10 million each. He said that in his role as a mergers and acquisitions attorney who is used to big bonuses, that is a “substantial sum” in both cases.
On March 11, the defense for Aaron Zahn called its’ first and only witness to the stand: an accountant. He explained to jurors that the numbers didn’t add up in the plan for JEA employees to get paid out in tens of millions of dollars, if the utility was sold. He said it would have been far less under the long-term incentive plan.
Wannemacher’s defense did not call any witnesses. However, his attorneys made a motion to acquit, stating the federal prosecutors failed to meet the requirements for theft of federal funds and conspiracy. The judge rejected that motion the next day.
CLOSING ARGUMENTS
“These two defendants came up with a plan to fleece the city of Jacksonville based on a fake stock option,” Duva said during closing arguments on March 13. “Whenever Aaron Zahn went to Wannemacher, however that was cooked up -- he should have stood up and say no but he didn’t. he joined the plan.”
Federal prosecutors said Zahn warned the board of “private home solar adoptions” and “alarmed employees” by “trying to persuade that this was going to happen in extremes.” Prosecutors showed us data revealing families using solar in their homes was not incredibly popular in Jacksonville, according to a bar graph they provided.
Suarez, Zahn’s attorney, said the argument that the executive board was led to believe that JEA was failing is “nonsense.” He said Zahn was looking at the idea of privatization because of potential threats to the company. He said Zahn believed JEA was a healthy company, but there were factors that could hurt the utility and employee’s pensions. He went on to say that Zahn disclosed all information about the privatization plan to his attorneys in “good faith.” Suarez also said there are no documents linking Zahn and Wannemacher.
Federal prosecutors came back stating “we want people who don’t steal” and “we don’t want people like him [in government],” pointing to Zahn.
Wannemacher’s defense attorney stated there was a lack of critical evidence against the former CFO. He added that “Mr. Wannemacher is a good guy” and he “has good character.”
SENTENCING
Zahn faces up to 25 years in federal prison. Sentencing is scheduled for June 18, 2024 at 9 a.m.
Duva said Zahn faces up to five years for conspiracy and 20 years for wire fraud.
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