Attorney: Ex-CEO Zahn ‘scapegoated’ for JEA’s woes

‘Mr. Zahn’s personal and professional reputation are being publicly harmed’

An attorney for former JEA Chief Executive Officer Aaron Zahn believes his client is enduring public humiliation and being scapegoated over a controversial bonus scheme that led to his dismissal last month once details of the plan came to light.

JACKSONVILLE, Fla. – An attorney for former JEA Chief Executive Officer Aaron Zahn believes his client is being scapegoated over a controversial bonus scheme that led to his dismissal last month once details of the plan came to light.

Attorney John Mullen raised those concerns Monday in a three-page letter to the city’s Office of General Counsel in which he wondered why JEA’s Board of Directors isn’t standing by its original offer to remove Zahn without cause after he agreed Dec. 30 to a negotiated exit. Zahn wants to know by Friday if the city intends to follow through on its offer, otherwise he will back out of the deal.

Zahn has been in limbo since the board voted Dec. 17 for his removal and placed him on paid leave. JEA’s board has been weighing whether his employment should be terminated without cause or for cause – the difference between him walking away with severance pay or mostly empty-handed. The board is still waiting for an opinion on the matter from the general counsel’s office.

In his letter, Mullen stated that no basis was presented to terminate his client for cause by the board’s self-imposed Dec. 30 deadline, and no such reasoning was provided before a Jan. 7 special meeting that was eventually cancelled. The letter went on to say that the board hasn’t said why it isn’t standing by a Dec. 17 offer to terminate Zahn without cause.

DOCUMENTS: Read the letter from Zahn’s attorney to the city

“The policy decisions made by JEA over the last two years have clearly become extremely politically unpopular,” the letter stated. “Despite this unfortunate turn of events, it is of critical importance that the Board assure the public, rating agencies, JEA’s bondholders, and JEA’s stakeholders that JEA, its Board members, and Mr. Zahn always unequivocally sought to adhere to all local, state, and federal laws and ethics codes. It is wrong and dangerous to try to equate unpopular policy and chronically negative media coverage with unethical or illegal actions.”

Zahn has been the face for recent controversies swirling around JEA, including an abandoned plan to explore a sale of the city-owned utility, his business relationship with a lobbyist hired by the utility and an employee bonus plan with the potential to pay out hundreds of millions of dollars if JEA were sold. While Mullen acknowledged that Zahn accepts his share of responsibility for the utility’s direction, he pointed out that his client did not act alone -- he worked together with the board, paid consultants and JEA employees.

“At this time, Mr. Zahn, his wife, and his children are being harmed by the prolonged separation process with undue public humiliation and defamation,” Mullen wrote. “In the end, an amicable and swift separation will allow JEA to move forward on its new direction and for Mr. Zahn’s family to begin to heal.”

The fallout since Zahn’s removal and the Dec. 24 cancellation of a bidding process for JEA has been wide-ranging, including the departures of several members of the utility’s leadership team, as well as State Attorney Melissa Nelson’s decision on Monday to hand over her office’s investigation of JEA to federal investigators.

Zahn could not be reached for comment Tuesday. His attorney said the letter sent to the city and the attached documents speak for themselves.

“We are unsure as to why direction from a majority of the Board was not carried out,” Mullen wrote in part. “Mr. Zahn and his family remain committed to an amicable resolution.”

Mayor Lenny Curry, who appointed several members of the board that selected Zahn as CEO over more qualified applicants, has not weighed in on whether he thinks Zahn should be fired for cause.

“That is a contractual question and that is a legal question that the attorneys have to answer,” Curry said Tuesday. “And my understanding is the general counsel for a couple of weeks now has been asking a lot of questions as it relates to the contract and cause. I have encouraged the general counsel’s office in the work they are doing to do a thorough review, but to work as quickly as possible so they can lay the facts out to the board of directors. If in the work they determined it within cause, they would take that to the board and I would expect the board to act appropriately.”

News4Jax political analyst Rick Mullaney, who heads up Jacksonville University’s Public Policy Institute, said two conclusions can be drawn from the letter.

“Zahn wants to settle. In fact, according to the letter, he accepted the board’s terms of termination as of Dec. 30,” Mullaney said. “The second thing that the letter reveals is that the board is not hesitating to settle without cause. It appears that the case has been building for a for-cause termination, and now there appears to be a clash between Zahn and the board on how his termination will end.”

JEA’s board of directors was supposed to meet to discuss Zahn’s fate at a special meeting Jan. 7. The meeting was postponed after the general counsel’s office completes more interviews and research on the topic. A make-up date has not yet been set.

About the Author:

Jim Piggott is the reporter to count on when it comes to city government and how it will affect the community.