NextEra Energy’s failed attempt to purchase JEA highlights web of murky spending, lobbying

NextEra Energy, the parent company of Florida Power & Light and Gulf Power, offered $11 billion in a failed attempt to purchase Jacksonville-based JEA that would have netted former JEA executives millions of dollars in bonuses. In its attempt to acquire JEA, NextEra and its subsidiaries hired lobbyists and advisors with deep ties to leadership in the City of Jacksonville, according to extensive reporting by the Florida Times-Union. 

One lobbyist, Sam Mousa, resigned as the Chief Administrative Officer of the City of Jacksonville and within one month had simultaneous contracts to represent the interests of Florida Power & Light (FPL) and the City of Jacksonville worth at least $200,000 annually.

Another lobbyist, Tim Baker, was under contract with NextEra or one of its subsidiaries at the same time that he was acting as an informal adviser to the now fired ex-CEO of JEA, Aaron Zahn. Baker was also a political consultant and friend to Jacksonville Mayor Lenny Curry.

NextEra and Florida Power & Light lobbyists’ conflicts of interest

Mousa and Baker were key players in NextEra’s attempts to purchase JEA from the City of Jacksonville. Mousa, the former Chief Administrative Officer of the City of Jacksonville, left government service at the end of June 2019. Two weeks later, Mousa, via Mousa Consulting Group, signed a $90,000 contract with FPL “in connection with the JEA” sale process, according to FPL records submitted to a special investigative committee of the Jacksonville City Council. Mousa’s signature on the FPL contract took place on July 13, 2019, ten days prior to a key vote by JEA’s board of directors to pursue privatization on July 23, 2019. JEA released its formal “Invitation to Negotiate” (ITN) on August 2, 2019.

Three days after the consequential JEA board vote, Mousa submitted a consulting proposal to the City of Jacksonville for $120,000 a year, despite his already existing contract to lobby for FPL in connection with the JEA sale. The scope of Mousa’s contract with the City included “special projects or initiatives as may be issued by the Mayor.” The City of Jacksonville executed its contract with Mousa on July 29, 2019.

Mousa’s contract with FPL contained a conflict of interest clause requiring him to notify the company of any conflicts “with or adverse to the interests” of FPL. His contract with the City of Jacksonville contained no such clause. Presumably the City of Jacksonville’s ethics rules would still apply to Mousa’s contract with the city, according to the Jacksonville Procurement Code. David Cook of Foley and Lardner, a law firm hired to represent JEA during the privatization process, complained that the “City waived conflict issues and at same time has him [Mousa] hired as a consultant.” Mousa received a waiver to work for the Jacksonville Jaguars, which was seeking public money for a proposed project, while also under contract with the City. It is currently unknown whether Mousa asked for, or received, a waiver in relation to his conflict with FPL and the City on the JEA sale.

Florida Power & Light did not respond to a request for comment.

Mousa separately formed another company, Conventus LLC, on July 10, 2019 with one of Mayor Lenny Curry’s top advisors, Tim Baker. Conventus LLC paid to take Curry, Council President Scott Wilson, and ex-JEA CEO Aaron Zahn to an Atlanta Braves playoff baseball game in Atlanta, according to reporting from the Florida Times-Union. How Conventus was paid to organize the Atlanta trip is currently unknown.

Baker, too, was under contract, via BCSP LLC, to support NextEra’s pursuit of purchasing JEA. The Florida Times-Union revealed that Baker pushed JEA officials to privatize the utility in secret meetings while under contract with FPL. Ex-JEA CEO Aaron Zahn even expressed interest in hiring Baker after he provided “policy advice”. Foley and Lardner lawyer Kevin Hyde, who attended the secret meetings, suspected Baker would work to get the JEA sale approved by the voters of Jacksonville, according to Hyde’s deposition transcript. Hyde commented, “When I see Tim Baker at a meeting, I assume there’s a campaign going to occur.”

NextEra’s lobbying web echoes scandals in Ohio and Illinois

NextEra’s attempts to curry favor in Jacksonville echo recent scandals in Ohio and Illinois in which utility political and lobbying spending has come under increased scrutiny. In late July, federal agents arrested Ohio Speaker of the House Larry Householder, along with several lobbyists, on charges that the group used $60 million of funds provided by the monopoly utility FirstEnergy Corp. in exchange for passing a law that bailed out that company’s nuclear and coal plants. 

On July 17, ComEd in Illinois agreed to pay $200 million to resolve a federal criminal investigation into a years-long bribery scheme, as part of a three-year deferred prosecution agreement. ComEd admitted that it arranged jobs, vendor subcontracts, and payments associated with those jobs and subcontracts for various associates of a high-level elected official for the state of Illinois – reported to be Speaker Michael Madigan – to influence and reward the official for his efforts to pass legislation favorable to ComEd. 

NextEra is one of the largest spenders on politics among utilities, one of the worst for disclosure policies

In light of the Ohio and Illinois scandals, investors have taken notice of potential risks to utilities posed by their dark money spending. 

“[W]ell what about other utilities that are very powerful, like the Southeast utilities and Virginia utilities and New Jersey utilities and North Carolina utilities … is this going to bleed into those utilities that have been able to get legislation and everything else given to them?” Guggenheim Securities LLC analyst Shahriar Pourreza said to S&P Global.

Another prominent stock analyst noted that NextEra’s political spending, at least as defined by certain FERC filings, is the largest among utilities, and that the company lags behind other utilities for its refusal to disclose many types of political spending, including any spending on 501(c)(4) groups which aim to influence elections without disclosing donors. 

While NextEra does not disclose its individual expenditures, some of its federal disclosures indicate that the company’s political spending has almost tripled over the last five years, with more than $60 million in 2019 alone. 

NextEra received one of the worst disclosure scores among utilities, according to data compiled by the Center for Political Accountability.

Image sources: NextEra Energy and YouTube