Nate Monroe: Feds plan to call dozens of witnesses in upcoming JEA conspiracy, fraud trial

COMMENTARY | Federal prosecutors plan to call dozens of witnesses at the upcoming trial of former JEA executives Aaron Zahn and Ryan Wannemacher, including former city and utility officials, bankers, lawyers, consultants and at least two employees with NextEra, the utility giant that bid $11 billion in an unsuccessful effort to acquire JEA in 2019.

The government's list, filed Friday morning, identified 36 witnesses it plans to call at trial, which is currently scheduled to begin Feb. 5 and could last up to a month. The witness list is neither comprehensive nor binding — prosecutors could add witnesses or never call some of the people it identified — but the filing reveals some insight into the government's trial strategy.

Zahn and Wannemacher were indicted in March 2022 on conspiracy and wire fraud charges, to which they pleaded not guilty. Federal prosecutors accused the two men of planning in secret to skim tens of millions of dollars in profits off the top of a sale of JEA, a 2019 privatization campaign the two were leading but that imploded amid scandal before a transaction was ever finalized. Zahn, JEA's former CEO, and Wannemacher, the utility's former finance chief, are accused of disguising their scheme as a modest employee-incentive program to get sign off from the utility's board of directors, who were appointed by the mayor and approved by the City Council.

To prove their case, prosecutors plan to call all of the former JEA board members, some of whom have publicly said they were led to believe the incentive program was only estimated to cost about $3.4 million, not the hundreds of millions that auditors and, later, prosecutors said was its true potential payout.

Prosecutors previewed major aspects of their trial strategy during an eight-day hearing over the summer, when they were required to disclose much of the evidence they'd gathered during the prolonged federal investigation into the privatization effort. That included calling potential trial witnesses, but the list the government filed Friday included a slew of names of people who have never publicly spoken about their experiences working with and for Zahn.

The most substantive — and damning — testimony is likely to come from current and former employees in the City Council Auditor's Office, who first deciphered the opaque and explosive math behind the payout scheme in the fall of 2019. Prosecutors indicated they planned to call Jeff Rodda, the auditor who did the lion's share of the work decoding the payout scheme, as well as the current and former leaders of the office, Kim Taylor and Kyle Billy.

Here are other notable witnesses prosecutors included on their list:

∙ Pam Rauch and Mark Hickson, vice presidents with NextEra and its subsidiary, Florida Power & Light. NextEra submitted an $11 billion bid to purchase JEA, the highest of any other bidder. When prosecutors unsealed the grand jury indictment in early 2022, they revealed a previously unknown story: In the days just before Zahn announced his intention to put JEA up for sale, he met with the CEO of an unnamed power company in West Palm Beach and disclosed his plans. That company was later revealed to be FPL.

∙ Former JEA CEO Paul McElroy and current CEO Jay Stowe. Prosecutors accused Zahn of peddling a false narrative about JEA's financial health to make privatization appear to be the only viable option for the city agency. McElory and Stowe could offer testimony about JEA's finances in the years just before Zahn's tenure and after his ouster. They would almost certainly offer starkly different interpretations of JEA's finances.

∙ Former JEA chief operating officer Melissa Dykes, who worked closely with Zahn during the privatization campaign. Dykes had numerous leadership roles during her tenure at JEA, including stints as CEO, and was once a highly regarded protégé of McElroy. The board ultimately selected Zahn over Dykes to serve as the agency's CEO after McElroy's retirement, but she effectively became the agency's No. 2 official in charge of the day-to-day operations. Her testimony is likely to include an admission that she understood the highly lucrative potential payouts possible under the program that Zahn and Wannemacher presented to the board as a more modest incentive. No member of the utility's executive team explained that potential to the board during its vote.

∙ Tim Hunt, a JEA analyst who was among a group of utility employees who questioned some of the financial and operational justifications Zahn was sharing publicly to justify privatization. Prosecutors are also planning to call Navid Nowakhtar, an official with the Florida Municipal Power Agency. Like some of JEA's own employees, officials in the larger public power industry were perplexed by Zahn's doom-and-gloom forecasting about the direction of JEA, which is generally regarded as a well-run agency. Nowakhtar could give voice to some of that industry skepticism.

∙ Sam Mousa, the former chief administrative officer for Mayor Lenny Curry who later became a consultant for NextEra.

∙ Jeff Panger, an analyst for Standard & Poor's, one of the nation's major credit-rating agencies, who peppered JEA executives with pointed questions about the financial projections they were presenting to justify privatization. Instead of answering Panger's questions, JEA's leadership asked its banker to intercede with a more senior analyst over Panger, after which Panger's tone "softened."

∙ Stephen Amdur, a lawyer with New York-based firm Pillsbury, which was one of the lead law firms JEA hired to help solicit offers from private companies to acquire the utility. Amdur told the FBI that Zahn had mentioned to him in a private conversation that he expected to receive "approximately $40 million" from the payout scheme he's accused of concocting and that other executives were in line to get $10 million payouts.

∙ Elizabeth Columbo, an attorney at Nixon Peabody and one of the authors of a memo that warned JEA executives against adopting an earlier version of the payout plan that is now at the center of the indictment. JEA leaders disregarded that memo, which said a payout plan like the kind under consideration would likely not "clear legal hurdles under Florida law."

∙ Various employees with JP Morgan, Morgan Stanley and McKinsey — bankers and consultants who helped JEA executives in their privatization campaign and had an insider view of what was happening during the rapidly moving sales process. None of those people have publicly spoken about their time working with Zahn.

Jury selection is scheduled to begin Feb. 5, although U.S. District Judge Brian Davis could still delay the trial, a request the defense has made. A status conference is scheduled later this month to sort through the many outstanding pre-trial disputes Davis has yet to rule on.

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

This article originally appeared on Florida Times-Union: Nate Monroe: More than 30 witnesses on list for JEA fraud trial