City Council investigation finds effort to sell JEA ‘ran afoul through Aaron Zahn’s greed’

Report finds corruption in attempted JEA sale

JACKSONVILLE, Fla. – The final report by a special Jacksonville City Council committee formed to investigate a botched attempt to sell the JEA in 2019 calls the plan greedy and found that it cost the city millions of dollars.

The 132-page report released Monday morning was the result of 10 months of committee work, including witness testimony, and prepared by an attorney for the City Council. A 242-page chronology of supporting documents summarizes what happened, how it happened and recommends legislative action to prevent such an effort in the future.

The report goes into detail about backroom negotiations with JEA upper management and its link to Mayor Lenny Curry’s office on pushing for a sale of JEA. It does not look into any criminal behavior but questions how the city got the point of almost selling its biggest asset and how JEA management would profit significantly.

Among the other top findings:

  • The sale plan lacked transparency
  • The public had no idea what was going on behind the scenes
  • CEO Aaron Zahn and senior staff would make an excessive amount of money if the utility was sold

The report’s harshest criticism was for Zahn, who was fired in late 2019 when the plan began to unravel. By early last year, the entire JEA board was replaced.

The report says the compensation plan “ran afoul through Aaron Zahn’s greed.” In closing, the report says “The ultimate cost to JEA and the City was millions of dollars. In accordance with the Council President’s Charge, this report, its appendices and chronology of supporting documents summarize what happened, how it happened and recommends legislative action to prevent such an effort in the future.”

VIDEO: The final report by a special Jacksonville City Council committee formed to investigate a botched attempt to sell the JEA in 2019 calls the plan greedy and found that it cost the city millions of dollars.

According to the executive summary, the plan was seemingly headed for approval until, “City Council, the Council Auditor’s Office and the public grew increasingly skeptical of the ITN and the PUP, both of which appeared to lack transparency.” The report found that “the PUP (executive compensation plan) would provide JEA senior executives with grossly excessive compensation” of $600 million. The disclosure of that fact resulted in a “firestorm” and “ultimately led to the cancellation of the compensation plan.”

“The Committee found that the efforts to market and sell JEA from 2017 to 2020 were pursued by advancing a false narrative of JEA’s financial soundness, conducted with less-than-appropriate transparency, in many instances purposefully, and were further encumbered with an egregious plan by JEA’s senior management to personally profit from the sale,” Brenda Priestly Jackson, City Council member and committee chair, said in a statement. “The report contains substantial detail supporting these findings, and makes recommendations to improve the City Charter and City ordinances regarding procurement, ethics, transparency and legislative investigations.”

THE REPORT: Executive summary | Full report | Chronology | Documents and statements

News4Jax reached out to Zahn for comment. Monday night, his attorney sent a statement:

The report says JEA did not fully disclose documents in a timely matter and says there were those such as political consultant Tim Baker and JEA board member Camille Lee-Johnson and even two city council members — Aaron Bowman and LeeAnna Cumber — who did not fully cooperate. Baker told News4Jax he hadn’t read the report yet while Cumber and Bowman said investigators asked personal questions about their families that they declined to answer.

As for Mayor Curry, he did not put much stock in the report.

At a noon news conference about the COVID-19 vaccine rollout on Monday, Curry said had just heard the report was out and was not happy that it was made public before he could review it.

“So you have an independent contractor hired by the City Council to produce a report that will talk about some people in my administration, and we not only are we not seeing the report I’m told we don’t have access to it. So they want to get it to you guys so a narrative would start without our reaction,” Curry said. “But here’s what I’ll say: I expect the report to make claims stated as facts that aren’t based on facts, based on what we’ve seen over the last year the way they’ve released their interviews. And I’m not going to react to that you guys have had access to me throughout all of the discussions of any issue we face faced in the city of Jacksonville, particularly this issue over the last couple of years and I’ve answered those questions with great clarity. Take their report, do what you think is right with it. I’m moving on for the city of Jacksonville and making sure people get vaccinated.”

The new leadership of JEA has already said they appreciated the work. of the council committee.

Jacksonville University’s founding director of Public Policy Institute and News4Jax political analyst Rick Mullaney said the report clearly shows that some of the misleading information on efforts to sell the JEA was coming from the mayor’s office.

“What the report does is, step-by-step, block-by-block, piece-of-evidence by piece-of-evidence, lay out a chronology of events that is very much inconsistent with what the mayor’s office presented,” Mullaney said. “And it confirms with the public suspected all along that the mayor’s office was very much the driving force behind the sale of the JEA.”

Michael Ward is the president of OurJax, a local group that is taking a close look at how the Jacksonville government is run. He applauds the City Council investigation on JEA and says the report points to three huge problems.

“One, the purposeful lack of transparency is noted specifically by the report,” he said. “Secondly, several years of behind the scenes planning and a secretive manner. And then it popped on the public with a need that we have to act on this immediately. That’s exactly what we’re seeing with Lot J. Fortunately with JEA the public rose up and we managed to get the facts and stop that bad deal.”

About the Authors:

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