Will JEA investigations result in criminal charges against executives?
Jacksonville attorney says it’s possible
JACKSONVILLE, Fla. – Now that city attorneys are saying former JEA CEO Aaron Zahn lied, withheld information and changed documents to benefit himself and other executives, are criminal charges next?
Federal investigators are looking into JEA employees, former or present. And while federal investigators and the State Attorney’s Office are not commenting, a list of 24 findings presented to the JEA Board of Directors on Tuesday that lead to Zahn’s firing acts as a possible road map for where the next investigations will go.
During Tuesday’s intense JEA board meeting, city attorney’s accused Zahn of withholding important information that could have changed the course of the potential sale of JEA. They alluded to the behind the scenes deals underway that would have benefited Zahn, upper management and even former a former JEA board member.
Curtis Fallgatter, a prominent Jacksonville attorney and former federal prosecutor, looked at investigators’ findings Wednesday.
“If these allegations are accurate, I think the federal authorities will look at that and say these are criminal badges of fraud,” Fallgatter said.
Much of it will likely center on a controversial bonus plan, known as the Performance Unit Plan (PUP) or Long Term Incentive Plan (LTI), in a way that would be a kickback that Zahn and others could have received if a sale had taken place.
“It’s not money coming from an outside source but it is a form of a kickback coming from an internal source that was set up through this compensation plan,” Fallgatter said.
Fallgatter said they will look to see if the action was intentional.
One area drawing big concern is an accusation that Zahn changed a presentation, a slide show that was shown to the JEA board about the bonus plan.
The altered slide refers to the LTI and points out the plans are “uncommon” and used selectively in public utilities. But in the slide actually presented to the JEA board last summer, it’s much different.
The slide the board saw said those plans are used “selectively.”
When asked later if he doctored the slide before it was presented to the board, Zahn told a City Council committee it was the firm that changed the slide, not him. A city lawyer said evidence points to the opposite.
“There is no question Mr. Zahn altered the slide and removed the word uncommon,” Deputy General Counsel Sean Granat said.
Zahn’s lawyer responded to the accusations of the altered slide Thursday in a letter to News4Jax.
“What is misleading is the OGC’s insinuation that there is something wrongful about Mr. Zahn “Altering a document” and “inducing the Board to take official action,” attorney John Mullen wrote. “There is no crime and nothing to prosecute, only an ordinary drafting exercise now undergoing scrutiny because the policy ideas relating to privatizing JEA and providing long-term compensation for JEA employees have become so politically toxic.”
This is just one area that will be looked at by federal investigators and there is no time frame given for how long their investigation could take.
“I would think this is a process of months, not weeks before the federal attorneys will be prepared to render a final decision,” Fallgatter said.
Councilmember Rory Diamond also said Wednesday that he and other members of a group tapped to investigate JEA will look deeper into the altered PowerPoint slide and other executives at the city-owned utility.
Zahn’s attorney said the findings of the investigation were “not accurate” and added that more information will come out when they take Zahn’s case to an arbitrator.
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