JACKSONVILLE, Fla. – A former JEA board chairman hired to help with privatization does not believe it was a conflict of interest to talk about an employment opportunity with JEA before voting for a plan to explore taking the utility private.
In an interview Tuesday with News4Jax, Alan Howard said he had no conflict of interest at the time of his July 23 vote because he was not hired or promised work for the utility until a little over one month after he left the board. He said there are no rules against former board members going to work for the agency.
While a deal might not have been in place, the board learned Tuesday that Howard and then-JEA CEO Aaron Zahn discussed work on potential privatization efforts before the board formally agreed to pursue that option. City attorneys said that was one of 24 reasons Zahn could be fired for cause.
“The question really is whether or not we were engaged prior to the July board meeting where the board voted on the (invitation to negotiate),” Howard said. “The answer is no, although Mr. Zahn had indicated to me prior to that board meeting that JEA would like me to be ‘on the team.’”
All six members of the board will step down at the end of February, the latest round of fallout from a now-scuttled effort to court companies interested in buying the utility. The board voted Dec. 24 to cancel its invitation to negotiate (ITN) in response to public outcry, one week after removing Zahn.
Howard was hired Aug. 28 to provide legal counsel for $75,000, the Florida Times-Union previously reported. That was a little more than a month after he backed a plan to “explore opportunities for growth” that included seeking bids from companies interested in buying or running JEA.
“We’re talking about exploring options to grow and protect JEA from what would otherwise be a slow but certain death spiral," Howard said during the July 23 meeting, while criticizing other utilities for “sticking their heads in the sand and hoping that the problem will solve itself.”
On Tuesday, city attorneys suggested that Zahn spoke with Howard about enlisting his help with efforts to explore a sale of JEA before the meeting last July. They said Zahn did not disclose those discussions or a “conflict of interest” to the utility’s board.
Pressed for details, Deputy General Counsel Sean Granat said the city investigation into Zahn uncovered an email in which an unnamed former board member asked a third-party law firm about getting an opportunity to work on the ITN before the board formally approved it.
“He also mentions that the board member had discussed with Aaron his law firm discounting his rates in exchange for a success fee, which means if there is a sale, his law firm would get more money or a percentage of the fee,” Granat said. “And this was all done prior to the July 23 meeting.”
On that front, Howard recalled that Zahn mentioned some investment banks and law firms were offering their services at a discounted rate in exchange for success fees.
“I told him if everyone was doing that, we would be willing to do the same," he said. “It turns out that (the Office of General Counsel) did not approve that, so nobody was hired on that basis.”
Howard said there was nothing improper about his business with JEA.
“Any suggestion that there was a conflict of interest is misplaced because there was no engagement of me or my law firm, no promise of hiring me or my law firm, and no expectation of hiring me or my law firm at the July board meeting,” he said. “I voted my conscience at the July board meeting.”