Breaking News
More () »

Former JEA executives take aim at indictment on federal conspiracy, fraud charges

Defense lawyers launched a multi-pronged assault Monday on the federal indictment accusing JEA's former top executives of conspiracy and wire fraud.

JACKSONVILLE, Fla. — This story was originally published by the Florida Times-Union.

The video above is from a previous report. 

Defense lawyers launched a multi-pronged assault Monday on the federal indictment accusing JEA's former top executives of conspiracy and wire fraud, hoping to convince U.S. District Judge Brian Davis to either dismiss the charges entirely or weaken the hand of prosecutors before the case ever reaches a jury.

Those varied requests could add time and complexity to an already complicated and high-profile criminal case that was set to go to trial in May. Earlier this year, federal prosecutors unsealed a grand jury indictment that alleged JEA CEO Aaron Zahn and CFO Ryan Wannemacher conspired to enrich themselves off the potential sale of JEA — Jacksonville's publicly owned electric, water and sewer utility — a project the two had worked on throughout 2019 and that eventually consumed their tenure.

Citing pre-trial publicity that has damaged the reputations of Zahn and Wannemacher, as well as alleged errors in the way the government has handled the case, the defense team asked Davis to consider a menu of potential remedies to help their clients, including moving the trial outside of Jacksonville, trying both men separately, forcing the government to disclose the identities of any co-conspirators it didn't charge with crimes, or tossing the indictment.

The charges: Federal grand jury indicts former JEA executives on conspiracy, wire fraud

Money & Power: The secret origins — and public collapse — of the campaign to privatize JEA

Some of those requests could require time-consuming, intensive hearings before Davis can make a final decision. Most of those requests are also considered extraordinary steps for a federal judge to take at this stage.

The motions made repeated references to news coverage of Zahn dating as far back as 2018 — during his bid to become JEA's chief executive — to more recent stories about his case winding its way through the criminal justice system, coverage the court filings characterize as overwhelmingly negative. Attorneys also cited the testimony of a hired psychologist who concluded that the coverage has irreparably tainted any potential jury pool in the city.

"Captivated by scandal, the Jacksonville community has been saturated with inflammatory media coverage regarding Mr. Zahn and the JEA scandal," Zahn's motion to move the trial said. "Investigative reports and the City Council’s Special Investigation Committee ...  have judged Mr. Zahn to be guilty of fraud, and their conclusions have been broadly publicized."

The motion argued there is precedent for moving a trial when investigative reporting "finds wrongdoing of the defendant and publicizes its findings to the community," citing as an example, "Florida Times Union columnist Nate Monroe’s twice-weekly column, which has focused almost exclusively on the JEA scandal, (and) thorough and extensive reporting was completed by the Florida Times-Union writers Nate Monroe, Christopher Hong, David Bauerlein, and Mark Woods, in a series entitled: MONEY & POWER ...," a special newspaper project published in 2020.

Zahn requested that Davis move the trial to Tampa, where public opinion about Zahn is virtually non-existent.

The defense team mined not just TV and newspaper coverage of Zahn but the tweets of individual reporters and public statements made by members of the Jacksonville City Council, who were often highly critical of Zahn, all of which, his attorneys argued, have primed Jacksonville residents to pre-judge JEA's former CEO.

"Most if not all the reporters covering the story are active on the various media platforms and many, including columnist Nate Monroe and other Florida Times-Union writers, have routinely expressed their opinions on Twitter and other social media thus greatly extending the impact of this prejudicial coverage," Zahn's motion to move the trial said.

The motion called the media coverage and the views of city officials not just prejudicial but improper. It also accused the media of perpetuating "the significant political overtones" of the case by portraying Zahn "as aligned with the young conservative Mayor Lenny Curry against the Democratic Jacksonville establishment." 

"Such political rhetoric is not proper discourse leading up to a criminal trial," the motion said.

Past Times-Union reporting indicated Curry backed Zahn's bid to become JEA's CEO, an advantage that helped sell his candidacy to the mayoral-appointed JEA board of directors, despite the fact that he had previously never run a utility of any size. And while Zahn repeatedly downplayed his relationship with the mayor in public remarks, he often played it up in private, according to Times-Union interviews.

Zahn also accused the government of contributing to the "atmosphere of presumed guilt" when it had FBI agents shackle and cuff him and Wannemacher during their arraignment in March at the courthouse, "despite the Government’s agreement to Defendants’ pretrial release without conditions." Although cameras are not allowed in the courthouse, a sketch artist depicted the scene — images that were shared among various local media outlets.

Zahn, Wannemacher claim rights were violated

Other motions filed by defense lawyers made more complicated arguments that will take time to litigate.

Both men have separately asked Davis to schedule a special hearing to determine whether prosecutors and FBI agents violated their civil rights.

That argument will revolve around a complex concept called Garrity Rights: Legal protections specifically provided to government employees when they are compelled to cooperate in workplace investigations, as both Wannemacher and Zahn were in early 2020 before they were fired after months of controversy surrounding their effort to privatize JEA.

As controversy mounted during the later months of Zahn's tenure at JEA, in 2019, city attorneys conducted a workplace investigation in which they interviewed both men. When doing so, they specifically provided Zahn and Wannemacher those Garrity protections, meaning prosecutors would be barred from directly or indirectly using any of the material in those interviews to build a criminal case.

Garrity rights, however, do not protect conduct, so nothing prevents prosecutors from building a criminal case as long as they obtain evidence independent from any protected statements. The city widely disseminated those interviews shortly after they had been conducted because of the public interest in JEA controversy at the time — controversy that ultimately led the utility's board of directors to fire Zahn for cause in January 2020.

Nothing in the indictment indicates prosecutors relied on statements either man-made in their Garrity interview — the vast majority of which involved them defending their actions and decisions while at JEA, and thus of limited use to a prosecutor. 

The motions filed by each defendant differ some on specific issues, but both advanced a sweeping argument that the dissemination of Zahn and Wannemacher's interviews, and the media coverage they received, may have nonetheless tainted the entire investigation.

It might be impossible, they told Davis, to know if witnesses' own recollections had been unknowingly shaped by their exposure to the interviews. 

"Witnesses and investigators shared information with one another freely, with no attempt to shield themselves or others against taint from Garrity-protected evidence," Wannemacher's motion said. "While making unrestricted use of Mr. Wannemacher’s compelled statements, investigators collaborated with, and eventually provided the results of their work to, the prosecutor." 

The defense team has asked Davis to schedule an inquiry — known as a Kastigar hearing — designed to force prosecutors to show they independently obtained evidence of criminal wrongdoing.

Prosecutors will respond to former JEA execs

Most of the motions were filed Monday, the deadline for the defense team to get in all of its pre-trial requests to Davis, so prosecutors haven't had time to substantively respond to all the arguments. At a brief scheduling hearing Monday, Duva indicated he would file responses by late November or early December at the latest.

The government is likely to vigorously oppose all the requests. 

In a filing last Monday, Duva responded to an earlier move by both men to have Davis simply toss the indictments entirely. The defense had argued the indictment put a criminal narrative on top of behavior that was, in essence, not criminal but something more akin to a "regulatory violation." 

Duva rejected that framing.

"The allegations in the Indictment," he wrote, "result from Zahn and Wannemacher’s brazen effort to heist tens or hundreds of millions of dollars in (city) funds to fill their bank accounts from the sale of a 125-year old city asset that they did not own, and had little to no role in creating its value."

Nate Monroe is a metro columnist whose work regularly appears every Thursday and Sunday. Follow him on Twitter @NateMonroeTU.

This story was originally published by the Florida Times-Union. 

Before You Leave, Check This Out