During his brief career in “public service” Aaron Zahn made out all right.
Eye on Jacksonville has learned that Zahn was paid $882,712.17 while head of the JEA, a period of less than two years.
While that certainly beats flipping burgers, Zahn might have done even better.
Had it worked out differently, Zahn would have had good reason to thank his friend Lenny Curry, mayor of Jacksonville.
It was Curry who pushed and prodded Zahn into the position of chief executive officer of the city-owned utility.
Zahn had a bachelor’s degree in philosophy and psychology from Yale, but no experience working with an electric utility. That didn’t seem to matter. He, at least, was convinced that he was up to the job
“I spent a lot of time talking with my wife about the fact that the community needed a bold leader to step up and actually demonstrate some character, integrity and leadership in order to get the train back on the tracks,” Zahn told The Daily Record.
Once there, Zahn launched an effort to sell the utility.
At least, that’s what it appeared to be, although Curry and Zahn always portrayed it as merely an effort to find out the value of the JEA.
As it turned out, it was/is worth at least $11 billion to one private utility in Florida – about twice the estimated value.
Curry, Eye always has speculated, wanted to cash out and use the money for financing his pension reform and infrastructure plans, and to pay down debt.
(Eye had to speculate because Curry does not comment to Eye on Jacksonville or allow anyone in his employ to do so. Was it something we said?)
But all that free money comes at a cost. The JEA pumps more than $100 million into the city’s coffers each year. As a private company it would pay something but likely not that much. It also would pass along part, if not all, of the cost of the purchase to its new customers in Jacksonville.
If the money from the sale were invested it would produce a revenue stream of some size, but it isn’t clear the city could do so even if so inclined.
Instead, it would have been spent, perhaps forestalling the tax increase that took place after the sale fell through. And perhaps enriching more of the mayor’s friends.
All very clever. It only fell apart because those in the plan apparently got a bit greedy.
Zahn and the former chief financial officer now stand accused of fraud and face the possibility of spending years in a federal prison.
They allegedly devised a scheme that would have increased Zahn’s earnings considerably, to the tune of millions. It was a bonus plan contingent upon the sale of JEA.
It also is alleged that Zahn doctored the JEA’s finances to make it appear the utility was doomed under city ownership. Eye noticed and commented on this, and others did as well.
The City Council auditor wasn’t fooled. He looked at the bonus plan and found it more bogus than bonus.
His report started the unraveling of the plan. Within a few months afterward, the plan was dropped, the sale was stopped and Zahn – along with the entire board of directors – were gone.
Maybe it was all a big misunderstanding. Zahn pled not guilty and will have a chance to disprove the accusations in court.
But Zahn has been described as “the principal architect and ringleader of perhaps the largest fraud in Jacksonville history.”
And it all began when Curry tried to help a friend.