By Emily Bloch
Former JEA executives Aaron Zahn and Ryan Wannemacher were indicted on conspiracy and wire fraud charges, according to federal grand jury documents unsealed Monday.
The 30-page indictment accuses the agency’s former chief executive officer and finance chief of devising a plot to privatize one of Jacksonville’s largest and most important public agencies. If convicted on all counts, Zahn and Wannemacher each face up to 25 years in federal prison.
The criminal charges follow a prolonged federal investigation examining a controversy a former city general counsel said amounted to “perhaps the greatest fraud in Jacksonville history.”
As news of the indictments dropped, locals began to react on social media and in response to questions from Times-Union journalists.
Here’s what people and local groups are saying so far:
Will Aaron Zahn or Ryan Wannemacher comment?
The Times-Union left messages for an attorney representing Zahn but did not receive a response. Jim Felman, an attorney representing Wannemacher, declined comment “at this time.”
JEA releases a statement
JEA released the following statement:
“Since 2020, several measures have been put in place under new leadership to ensure transparency at JEA and that the types of actions that caused the investigation in the first place won’t be repeated.
“All of us, including the JEA Board of Directors and each employee, are focused on providing Northeast Florida with reliable utility service at reasonable rates. We are intent on making sound financial decisions that will help us serve as a publicly owned not-for-profit utility for another 125 years.
“JEA is foundational to our community. It should not be lost on anyone that 2,000 committed JEA team members continue to provide exceptional service to our customers. And when we do our jobs well, everyone else can do their jobs well.
Mayor Lenny Curry’s response
In response to questions from the Times-Union, Jacksonville Mayor Lenny Curry said the following:
“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.”
City Council members’ responses
City Council member Brenda Priestly Jackson told the Times-Union that the indictment highlights the “level of corruption at the root” of the sales attempt. “I’m grateful because sometimes I don’t think folks understood the enormity of all of that.”
City Council member Rory Diamond said: “I’m excited that this long history and chapter for Jacksonville is coming to a close. What’s alleged in the indictment lines up exactly with what our (City Council) investigatory committee found which was an attempt to steal hundreds of millions of dollars from the people of Jacksonville.”
Community response on Twitter
FBI Jacksonville publishes a press release
Jacksonville, Florida –United States Attorney Roger B. Handberg announces the return by a grand jury of an indictment charging former Jacksonville Electric Authority (JEA) Chief Executive Officer (CEO) Aaron Zahn (42, Jacksonville Beach) and former JEA Chief Financial Officer (CFO) Ryan Wannemacher (40, Santa Rosa Beach) with conspiring to steal and obtain by fraud funds from the City of Jacksonville, which would have been generated from the sale of the JEA, Jacksonville’s municipal electric and water utility company. If convicted on all counts, Zahn and Wannemacher each face up to 25 years in federal prison.
According to the indictment, Zahn and Wannemacher worked together to devise a lucrative bonus plan known as the Performance Unit Plan (PUP) that would have paid millions of dollars to Zahn, Wannemacher, and others had JEA been sold during the Invitation To Negotiate (ITN) in 2019. Ultimately, once information began to develop about the true nature of the PUP and the certainty of significant bonuses paid from the net proceeds to the City of Jacksonville from the sale of JEA, the JEA Board stopped the ITN process on December 24, 2019. During the ITN, Zahn and Wannemacher worked together to craft the PUP formula using JEA’s financial statements and net position to ensure that they would receive millions of dollars when JEA was sold. The indictment alleges that Zahn and Wannemacher made material misrepresentations about and otherwise hid the true nature of the PUP from the JEA Board, members of the Jacksonville City Council, other JEA executives, and members of the public. During the ITN, Zahn crafted minimum requirements for the sale of JEA that would appeal to the JEA Board, members of City Council, and the public and, at the same time, ensure that the PUP bonus plan would pay out millions of dollars to holders of PUP units, the overwhelming majority of which would have been available to Zahn, Wannemacher, and certain others, had JEA been sold.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Federal Bureau of Investigation and investigators from the State Attorney’s Office for the Fourth Judicial Circuit. It will be prosecuted by Assistant United States Attorney Tysen Duva.
Duval Democratic Party releases statement
This story is developing. Check back with jacksonville.com for updates.
Emily Bloch is an education reporter for The Florida Times-Union. Follow her on Twitter or email her. Sign up for her newsletter.