COMMENTARY | In more than 100 pages of legal filings submitted in court in recent days, federal prosecutors slammed the legal arguments JEA’s former CEO and CFO have raised in an effort to short-circuit their indictments on wire fraud and conspiracy, casting the two men as self-serving liars in search of a “get out of jail free card.”
The government, in scorching language, accused former CEO Aaron Zahn and CFO Ryan Wannemacher of outright lying as city officials began scrutinizing turbulence within the city-owned utility in 2019, a time during which Zahn and Wannemacher headed an effort to sell the agency to a private utility. Both men have questioned whether prosecutors may have violated their constitutional rights by using protected statements they provided city attorneys amid that controversy — the subject of a sprawling, eight-day hearing before a federal magistrate judge in May.
Both sides have since been given time to submit briefs summarizing their arguments for the court to weigh, and in two separate and extensive filings, prosecutors characterized the defense as using “tortured” logic that would require the court to essentially rewrite portions of constitutional criminal law. It also framed the two men as bad-faith actors whose penchant for lying was so well established the sworn statements they provided to city officials were likely of little use. In one public meeting, for example, prosecutors said neither Zahn nor Wannemacher “said anything worth using, or stated anything that was not obvious from watching publicly available (board of directors meeting minutes).”
Assistant U.S. Attorney A. Tysen Duva, who is leading the prosecution of the former JEA executives, told the court the defense team has meticulously avoided discussing the substance of what either man told city officials because, often, “the nature of the statements are obvious — they were self-serving and useless.”
In early 2020, as Zahn inched closer toward being fired by the board of directors, both he and Wannemacher sat for sworn interviews with city attorneys who were investigating Zahn’s tenure at JEA. The city provided them legal protections called Garrity rights, in essence meaning that prosecutors could not in the future use anything they said in those interviews to build a criminal case against them. Prosecutors have repeatedly told the federal judge overseeing the case, U.S. District Judge Brian Davis, they neither read those statements nor provided any aspect of them to the grand jury that ultimately indicted both men.
The indictment accused Zahn and Wannemacher of concocting a scheme — disguised as a modest employee bonus program — to extract millions of dollars out of the potential sale of the city utility, a conspiracy to which they pleaded not guilty.
The defense has argued the public dissemination of their sworn statements — which became public records that were reported on in the local media, though not as extensively as the defense sometimes seemed to indicate — has likely “tainted” the investigation by exposing members of the public to the substance of their sworn statements.
Prosecutors broadcast contempt for this argument in court papers, mocking the theory as arguing such information “must have, somehow, made its way, osmosis-like” into the minds of grand jurors, witnesses and the prosecutors themselves.
“If the Defendants’ theory … were correct, every time the news media obtained a (protected) statement and reported on it, that would entirely absolve a public employee from prosecution in any jurisdiction,” Duva wrote. “This would be the consummate ‘get out of jail free card,’ and it is the result that the Defendants advocate for.”
Wannemacher’s defense team has taken the argument a step further, arguing that comments he made during a public City Council meeting should also be considered protected and barred from use by prosecutors.
In the fall of 2019, two City Council members — Rory Diamond and Ron Salem — convened a public meeting where they hoped to grill JEA executives about the roiling, real-time controversy around JEA’s potential privatization and the bonus plan, which by then had been exposed as a potentially lucrative golden parachute. Wannemacher testified in May he believed he was required to attend that meeting, otherwise he faced termination by Zahn — factual elements his attorneys have said should qualify his comments that day as legally protected.
In a Garrity setting, the employee has two choices: get fired or sit for a sworn interview and answer every question asked, even if it might implicate them in a criminal matter. Courts have said in such a situation, the employee’s answers are protected and can’t be directly or indirectly used by prosecutors in a future criminal investigation. Wannemacher’s defense team has argued the fall 2019 council meeting was, in essence, a de facto Garrity situation because he believed he had to attend, otherwise Zahn would have fired him over that act of “public insubordination.”
In their court filings, prosecutors seemed to project the most scorn for this particular line of logic.
“Zahn was a powerless CEO on his way out, as the process to remove him because of his failed leadership during the ITN, and the conjuring up of a bonus plan to enrich himself and others, was underway,” Duva wrote. “Zahn had no real authority to do anything at that point, much less terminate subordinates.”
The resolution to this dispute won’t likely come until the fall.
The defense has one final chance to respond to the government’s legal arguments this month. The issue will then head to a magistrate judge, who will make a set of recommendations to Davis, the federal judge overseeing the case. Both sides will have a chance to weigh in on the magistrate’s recommendations before Davis makes a final call.