The criminal trial of former JEA executives Aaron Zahn and Ryan Wannemacher neared a conclusion March 13 as jurors heard closing arguments in which attorneys for the two sides presented night-and-day characterizations of the defendants and many of the facts at hand.
In the 19th day of the trial, Assistant U.S. Attorney Tysen Duva closed by describing Zahn and Wannemacher as accomplices who plotted to rake in tens of millions of dollars in bonuses by crafting a deceptive incentive plan and manipulating the JEA board into triggering it through a vote to explore the privatization of the city-owned utility.
“Aaron Zahn and Ryan Wannemacher came up with a plan to fleece the city of Jacksonville based on a fake stock option which was going to produce tens of millions if not hundreds of millions of dollars if JEA sold,” Duva said.
“Aaron Zahn intended to do that from Day One.”
Zahn’s attorney, Eddie Suarez, portrayed Zahn as an innovative outsider from the private sector, who, with Wannemacher, became a victim of powerful political forces when he tried to shake up an entrenched bureaucracy and position the JEA to endure changing market forces that were threatening its financial viability.
“Mr. Zahn and Mr. Wannemacher are being scapegoated because they had the foresight and courage to look at something in the horizon that was potentially bad for the citizens of Jacksonville and begin to adapt,” Suarez said.
“And that courage has cost them dearly.”
Fired JEA Managing Director and CEO Zahn and CFO Wannemacher are charged with conspiracy and wire fraud. The trial focuses on events surrounding the JEA’s July 2019 dual votes to implement an incentive plan and initiate a sale process for the utility.
Jim Felman, an attorney for Wannemacher, also suggested that politics played a role in his client’s prosecution.
Painting differing scenarios
Felman made the suggestion in reference to a number of scenarios that were presented to the board before its July vote, including versions in which the JEA would fire hundreds of employees and raise utility rates or could explore selling the utility and saving it.
Prosecutors allege that the scenarios were part of the plot, with the “gloom and doom” version based on false projections in order to pressure the board to sell.
Felman, noting that former Mayor Lenny Curry supported the sale, told jurors that he believed the scenarios were “used as last-minute political cover” to protect Curry from possible backlash against the sale and were “not scripted by Mr. Wannemacher.”
Suarez called the scenarios planning tools. In presenting them to the board, Suarez said, Zahn was “looking toward the future for the betterment of the company he was responsible for leading.”
Felman said Wannemacher simply followed orders by creating a mathematical formula for the incentive plan, presenting it to the board and answering questions about it.
To find Wannemacher guilty, Felman said, “You’d have to believe he was trying to fool everybody about math on (live-streamed meetings).”
Conflicting depictions of auditor’s office
Subjects of the whipsaw arguments from the two sides also included the City Council Auditor’s Office, which issued an analysis in November 2019 showing that the potential payouts from the plan could have been more than $300 million for the entire pool of plan participants if JEA had sold.
The auditor’s report, which came days after Zahn announced that implementation of the plan was being indefinitely postponed, prompted investigations that led to the board rescinding the plan and halting the sale process in December 2019. In January 2020, Zahn and Wannemacher were ousted.
Duva portrayed the auditor’s staff as dedicated public servants who unraveled the scheme and saved money that belonged to city taxpayers.
Suarez called the auditor’s office a “deep state, unelected bureaucracy” that came to wrong conclusions about the situation and “ran around like Chicken Little saying the sky was falling” after the plan had already been postponed.
Characterizations also starkly differed about testimony from an attorney and personal friend of Zahn who said Zahn told him in 2019 that the mayor – who he didn’t name – supported him drawing up to $40 million in bonuses from a sale of JEA.
Was it evidence of the crime, as the government contends? Or was it, as Suarez described it, an instance of Zahn being transparent about a plan he was vetting with attorneys?
Suarez told jurors that Zahn, who had no experience in running a public utility before he came to JEA, introduced ideas similar to a “child putting a toy boat into a stream” and then relied on experts to vet them. He said Zahn and Wannemacher didn’t hide information and weren’t scheming.
“There’s no invisible hand of Zahn controlling anything,” he said.
The JEA board’s role
The attorneys further offered competing narratives on the role of the board in the case.
Defense attorneys described the board members as well-educated people who could have easily done the math in the formula and should have understood it could yield large payouts.
Duva said the board members were duped when Zahn and Wannemacher presented them with information that was incomplete or misleading.
Duva portrayed Zahn as a “wannabe Fortune 500 CEO” who tried to enrich himself from a company whose value was created not by himself but by generations of JEA employees. Duva described Wannemacher as a willing accomplice who “for whatever reason” decided to join Zahn in his scheme.
Duva said Zahn and Wannemacher had several opportunities to fully inform the board and later city leadership about the magnitude of the bonuses they stood to obtain, but didn’t do so. The reason, he said, was the defendants knew there was “no way on this green Earth” that the board would approve of the plan.
Instead, Duva said, Zahn and Wannemacher crafted a false narrative about the financial condition of JEA. He said they convinced board members JEA was failing and needed to be sold – a transaction that would have triggered the bonuses.
He also played video of Zahn and Wannemacher discussing the plan at JEA board meetings and the December 2019 hearing in which Council members Rory Diamond and Ron Salem posed questions about the plan’s potential payouts.
Weighing the evidence
For the Diamond-Salem segments, Duva urged jurors to “listen to what they say and how they sound,” then occasionally interjected with comments as the video played. Sample references to Wannemacher included:
“He’s just mortified. He knows the gig is up.”
“He’s lying right there.”
“Mr. Wannemacher there confirms the math. He says what he should have told the board in July.”
“Mr. Wannemacher sounds like he’s about to throw up on himself as he talks about that, because he knows what he did deep inside.”
Rebutting Suarez’s argument about political scapegoating, Duva said, “I think Mr. Suarez watches too much TV.”
Suarez told jurors that despite producing hundreds of pages of documents, the government had failed to present evidence showing that the two men conspired to cheat the city.
“Ask yourself a very simple question: Was there a single piece of paper reflecting any communication between these two men? The answer is no. Not an email. Not a text message. Not a phone message. Nothing,” Suarez said.
The closing arguments came after defense attorneys for Zahn and Wannemacher presented cases that together lasted one afternoon and part of one morning. Zahn’s team called a single witness, Oregon-based accountant Ernest Dixon, who testified that the Council Auditor’s report was flawed in its methodology, calculations and conclusions.
In Duva’s closing statement, he referenced testimony from Dixon that he was paid $750 an hour and put in 250 hours analyzing the case. Duva dismissed Dixon as “some expert from Medford Oregon (who) wrote a report that he got paid $187,500 for.”
Jurors are scheduled to begin their deliberations March 14.
The trial is being held at the Bryan Simpson U.S. Courthouse before two separate juries, one each for Zahn and Wannemacher.