Gnarly November 22, 2021 investigative article by Susan Clark Armstrong from Folio Weekly on the mushrooming scandal involving efforts to sell Jacksonville Electric Authority to Florida Power & Loot. Two of the wrongdoers were indicted by a federal grand jury on March 7, 2022.
From Folio Weekly:
The Circus – Susan Clark Armstrong
Disclaimer: The following account is told with a number of resources: interviews and information from brave sources on both sides of the political aisle, the Report of the Jacksonville City Council’s Special Investigatory Committee on JEA Matters conducted and written by attorneys Steve Busey and Kevin Blodgett (Smith Hulsey & Busey,) media accounts, public records obtained by The Florida Times-Union and public records obtained by Folio.
Elephant poo is a big deal at the circus…behind the scenes. Since the big beasts usually leave about 30 pounds of poop a pop, it takes a heap of planning and effort to keep those who stepped-right-up from seeing it, smelling it and stepping-right-in-it. To manage the poo, some workers carry buckets in an effort to catch the plops and protect the patrons. The circus also has its shovelers, who try to make the poo disappear or at least keep it out of sight. Regardless of the effort, at times the poop gets so plentiful that everybody needs to join in to contain it. But some from the circus clan, now and again, saunter right through the muck and pretend they don’t see it, even when their turd tracks follow them.
The Jacksonville Electric Authority (JEA) is one of the largest public utilities in America. It is a not-for-profit that exists solely to provide clean, safe, efficient and affordable electricity, water and sewer to folks in the area. As a public utility, it’s governed by strict rules, regulations, laws and oversight agencies. These safeguards were put in place to protect the public from the greedy. It is also the City of Jacksonville’s most valuable asset and contributes an average of $100 million a year to help pay the city’s bills.
When Lenny Curry decided to sell the JEA to the highest bidder, the process of the sale turned the utility and City Hall into a full-blown circus. It wasn’t long before the elephants had made a mess, the shovelers were trying to hide the mess or at least convince all of Jacksonville to embrace the ordure.
In the past, some mayors have toyed with the idea of selling JEA to a private company. But after a little research and a lot of public opposition, they decided against it. Mayor Curry, however, decided to trudge right on through. And as with most circuses, there are several acts going on at one time. The audience’s attention is directed this way and that depending on what the Ringmaster wants them to see and more importantly what he doesn’t want them to see.
Some around Jacksonville say the mayor was a witness rather than a participant in the JEA scandal. But then, some folks from the front row up to the cheap seats say the mayor must have known what was going on, unless he had been in a coma…for three years.
Before the Show
Acquaintances of Lenny Curry said he had always eyed the political big-time. In 2007, Curry became a regular at the Duval County GOP meetings. He was eventually elected chairman of the Duval GOP and in early 2011, after a concentrated political effort, the 41-year-old was elected Vice Chairman of the Republican Party of Florida (RPOF). As vice chairman, Curry began spending time in Tallahassee, which is where he forged a close friendship with 42-year-old Brian Hughes.
At the time, Hughes was working for Florida Sen. Jeff Atwater. He said he had been in the Air Force, taught at colleges and universities in New York, New Jersey and Oregon, and it was rumored he had a few minutes of a film and writing career. In 2009, Hughes became a lobbyist and political consultant, and within a couple of years, he gained a reputation as a scorched-earth-do-anything-to-win consultant/lobbyist. Some said Hughes had a “quick wit,” while others characterized it as a “short fuse to a bad temper.”
When Hughes introduced Curry to Tim Baker, the duo became a trio. At 27, Baker was handsome, more polished and a lot less caustic than Hughes. Baker claimed to be from an “old California political family” in the San Francisco Bay Area. He said he got his undergraduate degree from Arizona State, did a short stint in the Marines and went to Tallahassee for law school.
If Hughes’ consulting style was scorched earth, Baker’s was Apocalyptic…complete destruction. Those who knew the two said Hughes and Baker delved deep into the lives of their candidates and stored information to be used either for those they represented or against them. The two were a formidable force and became very successful in Tallahassee and in other parts of Florida.
Those who knew Curry, Hughes and Baker said the three had grand plans. Curry would be the mayor of Jacksonville, then governor of Florida, and who knew how far after that. But, as mayor, Curry would need a colossal cannon to catapult him to the governor’s chair. This, sources said, was when the plan to sell the JEA was hatched.
Jacksonville is a vast city with considerable debt. Insiders said Curry planned to take billions from the JEA sale, pay off some of the city’s debts, give funds to city council supporters for projects in their districts and roll out a few pork-barrel projects that would bear Curry’s name. The mayor would be a hero after lowering the city’s debt. Sources said by the time the money was spent and the city realized they couldn’t afford to pay their bills without JEA’s yearly contributions, Curry could be in the governor’s mansion.
To make the plan a reality, the trio would need a lot of shovelers and those who looked the other way. Any from a bucket brigade would need to be squashed.
In 2011, Mayor John Peyton term-limited out and Democrat Alvin Brown ran for mayor against Republican Mike Hogan. In what was then the closest mayoral race in the history of Jacksonville, Brown barely defeated Hogan to become the first African-American mayor and the first Democrat to hold the position since 1991.
Dave Bittner, Chairman of the RPOF was diagnosed with ALS, so Curry assumed his duties. Hogan’s supporters said Curry, acting as chairman of the RPOF, got stingy with both funds and support during the campaign. They said Curry’s direction was to purposely withhold funds and support because he thought Brown would be easier to beat come 2015, when Curry planned to become the mayor of Jacksonville. Hogan’s supporters still haven’t forgotten the slight.
On June 3, 2014, Curry announced he was running for mayor of Jacksonville and Baker and Hughes got to work. The two said early in Curry’s campaign, they became known as “The Boys” with the “…old guard Jacksonville people.” Those interviewed from the “old guard” said they had never heard the nickname. They did, however, have other names for Hughes and Baker.
Some of Curry’s supporters were uncomfortable with Hughes and Baker’s hostile attack ads against Brown. Those who watched the race said it seemed Baker and Hughes not only wanted to defeat Brown, but they wanted to destroy him. Watchers said the close victory sent a message; if you want to win at all costs, Baker and Hughes are your guys. And they had plenty of takers.
When Curry took office as mayor on July 1, 2015, Hughes and Baker had ring-side seats. It was apparent they planned to help run the show. Curry hired Sam Mousa as his chief administration officer and Baker’s wife as his second-in-command in intergovernmental affairs. Baker moved his office within spittin’ distance of City Hall and Hughes eventually followed. Employees said, from the day Curry was sworn in, Baker and Hughes were regular visitors. And Baker was not just visiting his wife. When Curry wanted to pass a sales tax, “The Boys” helped lobby, campaign and git ’er done.
The Playbill
The first step in the plan to get Curry into the governor’s chair would be to secure an “amen” for the sale of JEA from its board of directors, the top tier of management. Board members were unpaid and appointed by the mayor for three-year terms.
The second hurdle to clear would be support from Chief Executive Officer Paul McElroy. Employees of JEA said McElroy was a learned, low-key and wise grandfatherly type, who seemed genuinely devoted to the concept of JEA’s role as a public, not-for-profit entity. McElroy had been instrumental in guiding JEA to consistent profitability and under his guidance, JEA was named the No. 1 public utility in the U.S. out of 98 other utilities. (Mr. McElroy was not interviewed for this piece.)
The third step in pulling off the sale would require help from JEA’s third tier, the Senior Leadership Team (SLT). The SLT was composed of paid upper-management who provided oversight, expertise and management at JEA.
Once the approval from all at JEA was received, 51% of the Jacksonville City Council would have to vote for the sale. The council’s approval would seal the deal.
Showtime
In what seemed an apparent effort to set the plan in motion, Curry fired JEA’s entire board of directors and replaced them with those who appeared to be his loyalists. This had never been done before.
Tom Petway was a big-time contributor to the mayor’s campaign and was known as Curry’s “confidant.” In 2015, Curry appointed Petway to the board of directors. On Nov. 28, 2017, as his last official act on the board, Petway announced that JEA was near its’ “peak performance,” and the City of Jacksonville should consider the benefits of the “privatization of JEA.”
Privatization then became the code word for “sale.”
It seemed Petway’s announcement was a sudden light bulb moment for the mayor. A few hours later, Mayor Curry announced that Petway might be right…maybe it was time to take “a serious look” at JEA. He said he would work with the city council to begin the process to “explore the value of their public assets and how utility customers in our city can best be served.” By all evidence the mayor was way past the looking and well into the doing.
On Dec. 5, the mayor announced Michael Weinstein, the city’s chief financial officer and Melissa Dykes, JEA’s chief financial officer, would lead the effort “to move forward with Mr. Petway’s recommendation” to seek an “evaluation” of JEA. The next day, Curry named Brian Hughes as his chief of staff.
The push for an evaluation moved quickly. The city’s financial management advisers, Public Financial Management (PFM), were directed to search for companies to assess JEA. On Dec. 20, 2017, PFM sent notices to companies that would be tasked to study all aspects of the utility and determine its future.
Interestingly, the next day one of the mayor’s consultants (aka one of The Boys) Tim Baker, signed a contract with Florida Power & Light (FP&L) through his lobbying/consultant company BCSP.
Since it would take several election cycles to put council members in place who were favorable to the sale, Hughes and Baker had begun vetting and representing individuals when Curry was elected. Baker, with a silent nod from Hughes, was continuing the quest. Some council members represented by Hughes and Baker said one of the questions asked by the consultants was their position on the sale of JEA. This was followed by consistent suggestions that JEA needed to be sold to ensure Jacksonville’s future.
The Bucket Brigade
The city council’s auditor, Kyle Billy, was the first in the Bucket Brigade for the folks of Jacksonville. Billy notified City Council President Anna Brosche, who was running against Curry for mayor at the time, that something hinky had gone on with the search for companies who would evaluate JEA. It seems someone on Curry’s staff had directed PFM (Public Financial Management) to bypass the city’s normal procurement process and instead directed the search to go through the city’s treasury.
When Billy suggested the city needed to go through the proper procedures, Curry, Weinstein and some on the mayor’s staff were displeased with Billy. Curry wrote that Billy had made an “erroneous assumption,” then Billy got an “…I’m extremely disappointed in you” email from Weinstein. (All of Kyle Billy’s information was obtained through Busey’s report.)
The reason for the dodge appeared to be an attempt to hide the directions that were given to PFM. They were not directed to find a consultant to “evaluate” JEA but to find one who would coordinate “privatization of unspecified assets.” And the city wanted it done immediately. Goldman Sachs, J.P. Morgan and Morgan Stanley were chosen to search for companies to evaluate JEA. Investigative reports show the investment banks understood they were looking for buyers, not evaluators.
Records also revealed a not-too-well-kept secret in certain circles within the city. Although the search for a buyer for JEA was proceeding at exorbitant costs, NextEra, FP&L’s parent company, had allegedly been christened the buyer. This was the same FP&L that Baker, one of The Boys, signed a consulting contract with through his company BCSP in 2017.
City Council Member Garrett Dennis also became one of the mayor’s least favorites. Dennis told Action News Jax, “It is definitely the mayor’s agenda, and I think as the process unveils itself, it’ll be apparent that the mayor is behind the sale for JEA.” The mayor sent a “Well! I never!” kind-of-letter to the JEA employees via the board.
City Council President Anna Brosche, a certified public accountant, created a committee to “understand all aspects and implications” of a potential JEA sale.
The Bucket Brigade line was getting longer, and those who wanted more safeguards over the process were at work. Council Member John Crescimbeni added another layer of compliance. He called for legislation to amend the charter, which would require the voters to vote “yes” on the sale. It passed. This added more time and more levels of approval needed to proceed with any sale. Insiders said this caused The Boys to bunch-up for a tent meeting.
The Elephant in the Room
On Feb. 28, 2018 Mayor Lenny Curry appointed his biggest elephant, Aaron Zahn, to the JEA board of directors. In March of 2018, the JEA board held a workshop to discuss “Privatization.” It was Zahn’s first board of directors meeting. He took the spotlight and became the whole show. Zahn presented a host of projections, trends and liabilities about the company, which made JEA appear to be a big fat loser in a “death spiral.”
After Zahn’s show, CEO McElroy gave the opposite…a positive financial outlook for JEA. And to add to the mayor’s disappointment, Auditor Billy issued a financial report that showed the JEA was in good financial shape. Their contribution to the city for the 2017/2018 fiscal year was almost $117 million.
Billy advised that once the city spent their allowance from the sale of JEA, they would have no way to replace JEA’s subsidy. He also pointed out that in the event JEA was damaged by a hurricane, a private owner would not be a candidate for FEMA funds. Utility rates would likely go up to pay for any damages.
The feuding about the sale of JEA was starting to get foul inside and outside city hall. A well-known Jacksonville group was paying attention. The group was the Jacksonville Civic Council (JCC). The Boys had met their match.
The Jacksonville Civic Council, a group of well-respected CEOs from different political affiliations and diverse business interests, offered information and support to Brosche’s efforts. In good faith, they also attempted to share the same information with the city via Brian Hughes. They had little success with Hughes.
It appeared Hughes was closely monitoring the Brosche campaign and discovered a CEO from the Jacksonville Civic Council donated money to Brosche’s bid for mayor. In true scorched-earth fashion, Hughes called a representative of the JCC and threatened the donating CEO, as well as the whole group.
“I’m telling you, there will be consequences to his actions,” he warned. Hughes was reminded that some members of the JCC had contributed to Mayor Curry’s campaign as well.
“I DON’T CARE!” Hughes yelled, “I’M TELLING YOU, THERE WILL BE CONSEQUENCES!”
The organization contacted an attorney. Since there was nothing “actionable” to the threat, there was no legal remedy for Hughes’ threat.
Undeterred, Curry’s chief of staff seemed to make good on his threats. Mayor Curry’s budget had set aside $8.4 million for infrastructure next to a university. One of the JCC members felt this was a worthwhile endeavor and was the face of the effort publicly. The city revoked the money and allocated it to another project.
Reportedly, Hughes also tried to get a member of the group fired. The JCC got a good laugh at that one. Members of the group began to hear unpleasant and false rumors about themselves that came from Baker. “They did everything they could to stop us,” said a source. “It didn’t work. They didn’t understand they couldn’t leverage us.”
Shaking Things Up
April 6, 2018, Paul McElroy, JEA’s then-CEO, resigned. This was good news to Zahn who immediately resigned from JEA’s board and applied to be the new CEO. Some were shocked when the mayor gave the nod to appoint Zahn as interim CEO. Zahn had been on the board a little over a month and had virtually no experience in utilities. Employees at JEA thought Melissa Dykes, the chief financial officer, would be named interim CEO and eventually named the next CEO. She had extensive and impressive credentials. However, Curry said he was confident in Zahn’s ability to oversee JEA. Zahn was named interim CEO, and Dykes was named president and chief operating officer, a position created solely for her.
Folks at JEA had varying opinions and descriptions of their new CEO. A culmination of all was: Mr. Zahn was a good-looking, arrogant, power-hungry, spiffy dresser with a bad temper which often caused him to yell at people and use his favorite expletive meaning “to fornicate” or “fornicating” as different parts of speech. Employees said Zahn would play “All I Do is Win” by DJ Khaled at full-blast, “while he got down and sang and rapped along…sometimes in the hallway.”
While Zahn was rapping in the halls of the JEA, Curry’s Circus was running amok. Fortunately, Jacksonville’s champions were manning the Bucket Brigade. The Florida Times-Union (TU) was nosing around about the sale of JEA. Brosche’s committee was looking into Curry’s part in the sale, and the JCC was checking out everything. Employees and their union were fired up and protesting the sale.
With public sentiment against the sale, and the re-election campaign in full swing, Curry announced he was no longer moving forward with his privatization plans. He blamed “a few special interests and politicians with an agenda.” On May 15, 2018, the board met and made a motion to put privatizations talks on “hold.” However, materials from Busey’s investigation showed Curry’s announcement was just a “smoke screen.”
Jumping Through Hoops
To get to the governor’s mansion, Curry had a big hurdle to jump…and he needed the money from the sale to do it. The mayor’s team had touted the half-cent sales tax to the public as a way for the city to pay off their portion of the unfunded Police and Firefighters Pension Fund. Only the tax wasn’t accomplishing Curry’s pledge and he was getting anxious.
Fortunately, Hughes and Zahn were ex-officio members of JAX Chamber, Jacksonville’s Chamber of Commerce, and they attended meetings regularly. Investigative reports suggested Chamber President and CEO Daniel Davis whipped out his shovel, and maybe a little soap, to help Zahn and Mayor Curry produce a “Summit” meeting for JEA. The meeting seemed to be an attempt to discourage union workers from their protests and to encourage a warm-up to the sale.
Davis’ Chamber formed Alliance of Florida, Inc. (AFI), a non-profit, on July 11, 2018. Calendars show Davis had lunch with Zahn and Zahn’s secret business partner, Deno Hicks, several weeks later. Davis’ non-profit paid $300,000 to sponsor the JEA Summit, as well as a $25,000 consulting fee for Hicks to help with the meeting. AFI then sent invoices for both the sponsor fee and the consulting fee to Zahn, and Zahn used JEA funds to pay the chamber’s non-profit $325,000. When questioned, Davis couldn’t remember all the details of these transactions.
Front line employees said they were paid to attend the Summit or what they called the “Aaron Zahn” show. Both the mayor and Zahn gave presentations during the Summit. Curry spoke first and said he wanted to give employees the straight scoop about privatization. He blamed the TU for misinformation about privatization. Attendees said the CEO attempted to “dress down” by losing his tie and that he “ran around the stage with an earpiece.” Zahn nor Curry told employees that if JEA were sold, approximately 40% of them would be terminated.
Not many were surprised when Aaron Zahn was officially hired as JEA’s CEO on Nov. 27, 2018. Interestingly, Zahn didn’t finalize his employment contract with the JEA for six months. Instead, he retained a legal firm to develop and negotiate his contract. He also used the services of several of JEA’s firms and the Office of the General Counsel, the legal firm for the City of Jacksonville and JEA, to perfect the contract.
The Juggling Act
Come January 2019, Curry’s city reeked of conflicts to all except those doing the conflicting. City Council members said Hughes and Baker were working together in the mayor’s campaign. Baker was consulting on several council members’ campaigns, while both were actively waging war against Council President Anna Brosche. Hughes could not legally be working on a council member’s campaign, and there was no hard evidence he was…but insiders said he was actively working behind the scenes on several campaigns. There is plenty of evidence he was working against Brosche.
And Baker’s hands were full. He was working as a lobbyist/consultant for the city, who was trying to sell JEA. Baker was also a lobbyist/consultant for JEA’s sale and a consultant for FP&L, the likely buyer of the JEA.
When Zahn became interim CEO, his senior leadership team was initially not too keen on their new boss, but over the course of 2018 and 2019, their opinions seemed to change. The SLT began sneaking around to undisclosed pricey locations for meetings, hiding financial reports, creating separate sets of financial information which did not add up, and hiding public records.
Zahn quickly steered the leadership team to negotiate a “golden parachute” for separating from JEA. He presented the SLT’s contracts, worth millions, and got them passed with the board. But the team was keeping an even bigger secret for their boss. Back in 2018, while still interim CEO, Zahn began creating a plan that would give him millions when JEA was sold. In what appeared to be an effort to buy their silence and their cooperation, Zahn made the SLT members beneficiaries as well.
Zahn’s package was called a Performance Unit Plan or PUP for short. The CEO had tasked Ryan Wannemacher, his chief financial officer, to create the formula for the PUP. The PUP would have to navigate strict public utility oversight and regulations, so the group needed someone on the inside to provide legal advice. In April, Zahn made Herschel Vinyard, one of JEA’s attorneys from Foley & Lardner, an offer. Reports contend that Vinyard would get a large salary from JEA plus millions from the PUP when JEA was sold. Vinyard accepted.
The sale of JEA was back in the center ring. The new board of directors was in place, and now it appeared that senior management (the SLT) was on board for the sale. Curry, Zahn and his SLT intensified their efforts to make JEA look like it was in the death spiral to the city council and JEA’s board.
Curry was re-elected mayor on March 19, 2019 and was now term-limited. As soon as the election was over, Curry’s employees at City Hall began switching hats. It appeared Mousa wanted to follow the money, Hughes wanted to follow the power and Mayor Curry was tired and just wanted to follow the Jaguars and go to the gym. After all of the shuffling, Mousa retired to start his own consulting firm and Hughes was named Curry’s chief Administrative officer.
It looked like The Boys had secured almost enough votes on the council to sell JEA. They needed two more. Baker was representing City council candidates Randy DeFoor and Rose Conry, and it appeared they would both win. Only Baker had an unpleasant surprise on Election Day. On March 19, 2019, Conry lost. Afterward, things appeared to go from bad to worse, as media reports showed DeFoor didn’t want to sell JEA’s water and began questioning everything about the sale.
Zahn’s Spinning Plates
On May 16, 2019, Zahn finally had the contract he wanted. After negotiating for a higher salary, Zahn finally accepted the same salary that 16-year veteran, McElroy, was paid … $520,392 a year. He also received $3,100 a month for fringe benefits, a half-million dollars for life insurance, healthcare and a yearly bonus of approximately $30,000. The most baffling benefit of all was that Zahn’s contract was forever. Legal and employment experts said they had never heard of a forever contract.
Nevertheless, it seemed the CEO didn’t plan to stay forever. Apparently, Zahn’s attorneys considered the sale of JEA in the contract and not only negotiated a golden parachute for Zahn’s departure, but they also negotiated a very soft landing. If JEA was sold or if Zahn decided to move on, he would leave with an amount between $840,000 and $1.1 million.
Investigative reports show Zahn went on a shopping spree with JEA’s money. He hired legal firms to represent JEA for the sale and the services of the Dalton Agency, a public relations firm, to help sell the sale of the utility. The agency “co-authored or revised editorials” to appear in the media to support “privatization.” The PR firm created “talking points” for the sale. The agency also did on-camera leadership training and taught the senior leadership how to spin the negatives of the sale and the termination of employees into positives. JEA paid them $25,000 a month.
At the June board of directors meeting, Zahn recommended the board approve a lease for a new Downtown headquarters. He didn’t tell them a new Downtown building would put JEA in a financial bind, unless JEA was sold. The board approved it. The media reported Baker was retained to help acquire land for JEA’s new Downtown headquarters.
Somewhere in the midst of this circus, Zahn forged a close ally. Lynne Rhode, who had worked for his former company, BCR Environmental, was now an attorney at the Office of the General Counsel. Rhode was carrying legal water for Zahn. She worked with Zahn’s other legal firms to attempt to bring the PUP in line with Florida Law for public utilities. Rhode too was added as a beneficiary of the PUP by Zahn.
But there were some speed bumps. Elizabeth Columbo from Nixon Peabody in New York, another one of JEA’s legal firms, sent Wannemacher (JEA CFO) and Vinyard (JEA legal counsel) an email on May 20, saying their firm had determined the PUP was not legal under Florida law. The memo was given to Rhode, a new member of the PUP. It appears she shared it only with Zahn and Dykes.
On June 17, 2019, attorneys from Rhode’s firm, the Office of General Counsel, issued a memo giving a conditional okay for the PUP, but identified specific laws the plan must comply with before it could proceed. Rhode received the memo, and shared it with the same four leadership members.
On the same day, Aaron Zahn, Melissa Dykes, Ryan Wannemacher and Herschel Vinyard took a secret trip to New York City. They met with the law firm of Pillsbury Winthrop Shaw Pittman. Stephen Amdur, Zahn’s college buddy, was an attorney with Pillsbury. Also at the meeting were two of the investment banks that had been chosen to help with the sale of JEA, J.P. Morgan and Morgan Stanley. Although the sale of JEA was not authorized, the purpose of the trip was to discuss the sale.
Back in Jacksonville, Zahn and his team were busy. They met with the JEA board of directors’ compensation committee. The committee was responsible for employee benefits at JEA. They presented the PUP as a “long-term compensation plan” to keep valuable employees. Rhode and the SLT failed to mention Nixon Peabody’s legal objections or the Office of the General Counsel’s conditions to the plan. The board of directors committee blindly agreed to present the plan to the full board for approval.
The spinning continued. On June 25, after their meeting with the compensation committee, the SLT met with the full board. Zahn, Dykes and Wannemacher gave yet another exaggerated presentation of JEA’s demise. Since the sale was, supposedly, not an option anymore, the senior leadership put together alternate scenarios which, they said, might help JEA to survive. It wasn’t clear if their scenarios came from their PR firm or were created in drunken binges. In any case, some of the information they presented was pure fantasy.
JEA’s board was concerned and asked them to come back to their July meeting with more information. Several days later, the board agreed to begin negotiations for “privatization” and to engage Pillsbury to act as JEA’s attorneys for the sale. Zahn’s buddy and Pillsbury attorney, Stephen Amdur, signed the “engagement letter.” The date was June 27, 2019, but Pillsbury’s contract was backdated to be retroactive on Jan. 1, 2019. Turns out, Pillsbury would also get an elephant-sized “success bonus” if JEA was sold.
Bull-Handlers
Events that should have taken months to prepare, whooshed along in weeks.
A big-ticket meeting was set up for July 10 and 11 at the Club Continental in Orange Park. The purpose of the meeting was to begin preparations to send invitations to companies to negotiate for the purchase of the utility…even though FP&L’s parent company NextEra had allegedly been christened the buyer.
Baker was in attendance and made a presentation to the group advising them how to progress with the sale—while still employed at FP&L.
The day after the Club Continental meeting, FP&L hired Mousa, formally the chief administrative officer for Mayor Curry, as their lobbyist/consultant for a “base fee” of $90,000 a year.
A week later, Zahn sent FP&L employee Baker confidential financial information regarding JEA…when no other bidder, reportedly, received the information.
However, not everything was show ready. Behind the Big Top of the Club Continental, things were getting muddy. According to investigative material, Michael Munz of the Dalton Agency told Zahn at the meeting that the PUP was a “stupid” idea, and Zahn threatened to cancel the agency’s lucrative contract. A member of the senior leadership, who was a beneficiary of the PUP, told him the PUP looked bad from a “PR perspective.” Vinyard, also a beneficiary, told him not to go forward with the PUP.
Charming Snakes
On July 23, after a short presentation, the board of directors signed a resolution to sell JEA.
By July 31, Zahn had hired a horde of lawyers, numerous consultants, a public relations firm and a few investment banks. They all met for a strategy session. It appeared the attendees knew NextEra-FP&L would likely be the buyers. Listed under “considerations/questions” on the agenda was “Is the clear buyer for JEA NextEra (FP&L)?” The same day, Baker terminated his contract with FP&L, leaving his legacy to Mousa.
Curry was crowing, Zahn was rapping, and the SLT was counting their money.
Meanwhile, Zahn was sucking up JEA’s money like a vampire loose in a blood bank. The mayor and his herd kept up the sinking ship reference about the JEA, oftentimes going to amusing extremes. City Council Member Matt Carlucci questioned the sale in a tweet, and Zahn called him at home and used his angry voice. Auditor Billy was regularly bombarding JEA with 22 questions about the PUP but getting no answers. And reporters at the TU were relentlessly giving the mayor and his team no reason to like them.
To further increase the secrecy, Zahn’s team began the process of hiring an outside company to pay out the PUP, when it became available. Presumably, this would shield the massive payments that would be coming to Zahn and his designees from front line employees, the public and the press. The company was to “piggy-back” the PUP payroll on another client’s payroll that had no relationship to JEA.
OGC’s attorney Rhode was shoveling fast. Instead of asking Attorney General Ashley Moody’s office if the PUP was legal, she wrote to the AG and asked that she “confirm that the PUP is not subject to” Florida Statutes. When one legal firm identified several problems with the plan, Rhode challenged the firm saying the PUP had been evaluated by “four subject matter expert attorneys…” It is not clear if Rhode knew that “evaluated” and “approved” were defined differently.
Since there were still some Jacksonville firms that Zahn hadn’t hired for JEA, he hired more: Carlton Fields, The Radley Firm, and Hopping Green & Sams. He also hired Milam Howard Nicandri & Gilliam to “confirm” Rhode’s work.
In September, someone in Zahn’s group directed their attorneys at the Office of the General Counsel to institute a Cone of Silence around all aspects of the JEA, which included their PUP. The Cone required anyone who was involved in any way with JEA to remain silent. The utility warned employees their pay would be
docked if they “made unauthorized statements…” Shortly afterward, the OGC also silenced the heads of the Jacksonville City Council…they were no longer permitted to utter anything pertaining to JEA’s sale.
The poo was deep and stinky around the circus. Council members told Folio that they were warned it would be “political suicide” to oppose Curry, Hughes and Baker. Some did, they said, and were punished. Sources did not want their names used, or the illegal and frightening events that happened to them mentioned, but the message was clear… bad things happened if you opposed the sale of JEA.
The elephants, shovelers and those who looked the other way thought they had won. But Curry’s people grossly underestimated the Bucket Brigade.
Not All Heroes Wear Capes
A series of fortunate events would change the course of the JEA sale. A prominent Jacksonville citizen called in some powerful forces to fight back against Curry’s minions. Influential people from Tallahassee and Orlando were assembled, along with distinguished Jacksonville citizens who were aware of the egregious acts of greed surrounding the sale and didn’t like bullies. The group, later called OurJax, gathered information and boldly challenged the sale and Curry’s premise that JEA was heading in a downward spiral.
The good deed of another local citizen further weakened Zahn’s hold on the JEA. The media’s public records requests regarding the sale of JEA were being ignored and/or colossal charges were imposed to obtain records. This citizen had a close professional relationship with attorney Barbara Peterson, president of the First Amendment Foundation in Tallahassee. Peterson and her foundation quickly and quietly had some teachable moments with JEA and a few with the city. Public records began to flow.
Zahn and Vinyard were now nervous. They advised JEA attorneys to stop sending emails outbound because they could be “potential public records.” But that didn’t stop the attorneys from emailing members of their own firm. Busey’s report detailed emails between two of Zahn’s attorneys. One said the PUP payout could be a billion dollars. “I was on a call with two rational men Friday afternoon…They were talking about the need for a grand jury in light of the (PUP),” said one attorney. “Pigs v hogs,” replied the other.
Council Member Garrett Dennis had another unpleasant surprise for the keepers of the sale. On Sept. 24, Dennis made a motion to hire independent attorneys to investigate JEA’s process to negotiate with buyers for the sale and the PUP. The council approved the motion.
On Oct. 4, 10 days before JEA would select the final bidders to buy the utility, Baker and Mousa chartered a jet to take a group to an Atlanta Braves Game. Mayor Lenny Curry, Aaron Zahn, City Council President Scott Wilson and Brian Hughes were invited to jet to the game. Everyone on the plane was playing a part in the sale.
Florida statutes ban lobbyists from giving and city officials from getting gifts of more than $100. Mousa and Baker were flouting Florida law: They were both lobbyist/consultants for Curry’s city. Baker was advising and lobbying for JEA. Mousa was lobbying/consulting for FP&L, who was allegedly the buyer of JEA, and also being paid by Foley & Lardner to lobby for JEA.
Carla Miller, attorney and the City of Jacksonville’s ethics expert, determined it was not ethical for Zahn’s SLT to be negotiating with bidders for the sale of JEA, since they would directly benefit from a sale. Rhode disagreed. Miller suggested they all go to the State Ethics Commission for an opinion.
According to Busey’s special investigative report ,the Jacksonville Civic Council were still very much out in force. They had hired their own attorneys, accountants, utility experts and consultants, and were the first to publicly announce the process to sell JEA was flawed.
OurJAX was working as diligently behind the scenes, as well, to shine some light on Curry’s Circus.
Eventually, attorneys with the Office of the General Counsel and Foley & Lardner met with Zahn, Vinyard and Rhode. Pillsbury’s attorneys joined by telephone. OGC’s Jason Gabriel told the group the PUP was illegal under Florida statutes.
After the meeting, Zahn quickly sent Gabriel a letter saying JEA senior leadership “has decided to postpone indefinitely the implementation” of the PUP. However, billing statements show the CEO continued to have JEA attorneys work on the PUP. The team also continued to work with their private payroll company to hide the PUP payout.
Judging by Busey’s report, the council’s auditors had a whiff that Zahn was moving forward with the PUP anyway.
The city’s auditors weren’t deterred and on Nov. 18, city auditor Billy issued a memo which detailed disturbing facts about the PUP: The plan was specifically tied to the sale of the JEA. Zahn had the PUP structured so the JEA would also have to pay specific taxes on the millions Zahn and his team would receive. The CEO could give a piece of the PUP to anybody he wanted. Billy’s memo went on and on with bad news.
Rhode obviously didn’t appear keen on going to the state’s ethics commission regarding the probable conflict of the negotiating team. Not willing to give up yet, emails show Zahn and Hughes, with the mayor’s approval, chose a new team. They were Stephanie Burch, Hughes’ second in command at the city, City Treasurer Randall Barnes and City Engineer Robin Smith. Nonetheless, Zahn’s SLT would still manage the new team, defining themselves as “subject matter experts.”
A workshop was held by the City Council on Nov. 25. Mayor Curry spoke before the council with all the emotion he could muster, just short of crying. He called JEA in its present form a “government-run monopoly” and warned of “increasing rates…declining revenues… shrinking employee base.” The mayor punctuated his passionate homily with “I will oppose any effort to stop the planning process because of baseless conspiracy theories and unprecedented negative onslaught from a small segment of the media…”
The next day Council Member Randy DeFoor officially put Aaron Zahn’s PUP-py to sleep. She proposed a resolution to terminate the PUP. Matt Carlucci and Joyce Morgan co-sponsored the resolution and the council passed it. The PUP was dead.
By the first of December, Zahn should have changed his Khaled-themed win-song to Dire Strait’s Money for Nothing. At last count, Zahn and the mayor’s circus had hired at least 24 consultants and/or attorneys and racked up over $10 million dollars in fees, with invoices still rocketing in. In return, so far, the good folks around Jacksonville had gotten…nothing.
The Show Must Go On
In what appeared to be an attempt to keep the sale negotiations from the public and the press, the final meetings to select the buyer of JEA were set to take place in Foley & Lardner’s Atlanta office.
Carla Miller wasn’t backing down. She believed that negotiations for such a monumental sale should meet all ethical mandates. To ensure this, she wanted to have a seat at the table during the process in Atlanta. Rhode did not agree…strongly. Nevertheless, Miller was approved to go to Georgia.
When Miller arrived at Foley & Lardner’s office, she literally had no seat at the long massive meeting room table. Instead, she found a small chair, sat by the window, using her lap and the floor as desks and the window sill for her coffee cup.
Miller had concerns that some of the “shade” negotiations should have been public. The ethics attorney began emailing OGC’s Jason Gabriel, with concerns. She copied Rhode on the emails, which made Rhode’s face turn red. Rhode emailed Gabriel saying the ethics attorney’s assumptions were “plain wrong” and based on “a personal and political agenda rather than any legal basis.”
It was a ho-hum moment for all, except the other bidders, when NextEra-FP&L was finally named the successful bidder for the sale of the JEA.
The Finale
Mayor Curry seemed a little desperate. On Dec. 12, Curry sent a letter to JEA’s board recapping the false narrative of the utility’s death spiral. His letter insinuated most of the folks in Jacksonville weren’t smart enough to know what was going on with JEA’s business and, thus, should not be commenting. Although the sale of JEA was under the city charter and had to go through the city council, Curry advised the Board to “tell senior leaders and their advisors to conclude” the sale by the end of January.
On Dec. 16, City Council Member Rory Diamond called the Circus together. Most all of the stars showed up, except the Ringmaster himself, Mayor Lenny Curry.
The big bulging elephant in the room was Aaron Zahn. Wannemacher, Vinyard and Rhode appeared, but Dykes was conspicuously absent. Many from the Bucket Brigade were there, too. But this time they were not catching anything; instead, they were hurling it back during the comments section of the meeting. And the TU was there to tell the people of Jacksonville all about it.
Many of the council members had hard questions for Zahn, his SLT and some board members. But Zahn and his team seemed to have memory issues.
Final records show that NextEra-FP&L’s $11.05 billion bid for JEA would have allowed Zahn and his team to divvy up the payout of approximately $1.1 billion. Yet, Zahn didn’t remember who started the PUP, who got the PUP or how much they would get. He said he didn’t know he was the person who would divide up the PUP to anyone he wanted. He also failed to recall there was no cap on payouts.
Materials from Busey’s firm proved Zahn had tasked Wannemacher with creating the formula. Spreadsheet calculations were found in Wannemacher’s possession and he had modified them, but he had PUP-amnesia as well.
Two JEA board members said they voted for the PUP because Lynne Rhode confirmed that her Office of the General Counsel approved its legality. Yet, the OGC had not approved it. When asked about her statement that the OGC had approved the plan, Rhode said she understood the OGC had given “authority” for the plan to move forward.
Time to Take a Bow
The JEA board of directors met on Dec. 17, 2019.
Board Chairperson April Green made a motion to officially terminate the PUP. She also made a motion to terminate their CEO. And Zahn’s golden parachute was not going to fly with Green. She insisted on firing him “with cause” and had a list of the causes. Green might have had another good reason to be perturbed. The board’s blind acceptance of Zahn’s plans made them look like a bunch of clowns.
Aaron Zahn did not win. He was fired “with cause.” Melissa Dykes was at the meeting. Although she had played a large part in Curry’s Circus, she was made interim CEO. “We have work to do to restore trust with the community,” Dykes said with a straight face.
On Christmas Eve morning, Chairwoman Green called the board for an emergency meeting “based on the recommendation of Mayor Curry… .” The board cancelled the sale of JEA. The meeting was called, affectionately by some and bitterly by others, “The Christmas Eve Massacre.”
Lenny Curry’s Circus sale was over.
The City of Jacksonville, with Mayor Curry and pseudo-mayor Hughes, was no longer a welcome place for those who held the buckets for the people of the Jacksonville area. Kyle Billy and Carla Miller retired. Members of the council who publicly battled the sale and Curry felt they would face Baker and Hughes’ wrath, come re-election time. Some say they won’t run because they don’t want to put their family or themselves through “malicious, and/or false allegations and rumors.” They point to Council President Scott Wilson’s race for Duval County Clerk as an example. Wilson opposed the sale. Ironically, the Braves photo, with Wilson sitting with Baker, Curry, Mousa and Hughes, was used to vilify Wilson during the election. He lost.
As interim CEO, Melissa Dykes fired Ryan Wannemacher who had helped Zahn create the PUP. She fired him by email and “with cause.” He took nothing with him.
Every member of the Curry-appointed JEA board of directors left voluntarily, citing reasons nobody believed. The rules for nominating JEA’s board were changed, allowing city council to appoint board members.
When JEA’s new board took over, they fired Dykes…in person. Dykes and the remainder of the senior leadership were terminated “without cause.” They were able to keep the lucrative employment package Zahn had arranged for them.
Paul McElroy came back as interim CEO. The new board of directors offered him his job back. He resolutely declined but agreed to stay until a new CEO could be hired.
Lynne Rhode anticipated things were not going her way and resigned. On her way out, she hurled some allegations at General Counsel Jason Gabriel, and he flung them back.
Council members and eminent citizens in Jacksonville have called for Hughes to be removed as Curry’s mayor-man. Curry just looked the other way. Baker and Hughes still roam the halls of the city.
There were others who either willfully or unwittingly boarded Curry’s Circus train. Their names were left out of this account, not because they were innocent, but for lack of space.
The Investigatory Committee officially began work on January 20, 2020. Steve Busey and Kevin Blodgett spent over a year investigating the sale of JEA and the PUP. They interviewed 47 people and gathered 600,000 documents before issuing the Report of the Special Investigatory Committee on JEA Matters for the City Council.
The first page of the report is bright white paper with a single quote in bold script in the center of the page. The quote is by Michael Ward, former CEO of CSX Railroad. “Government without transparency is a breeding ground for mischief.” The attorneys found lots of mischief and little transparency in the city government and JEA during the ill-fated sale of the utility.
The reports revealed “evidence of coordination” among the Curry administration and FP&L regarding the attempt to sell JEA. It also revealed that Aaron Zahn had lied during the process. The sale was fraught with conflicts of interests.
In his book Crusader’s Cross, James Lee Burke wrote, “Our undoing is in our collective willingness to trust those who we shouldn’t.” Indeed, Jacksonville’s undoing was their willingness to trust those in Mayor Lenny Curry’s Circus. But then, in the battle of good versus evil, the redemption came from the heroes, the Bucket Brigade, who fought the untrustworthy—and won—and are still standing watch. Now it’s up to the FBI, the U.S. Attorney’s Office and the Federal Grand Jury to sort it all out.
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