Advertisement

Archive for Saturday, November 23, 2002

President and CEO steps down amid federal investigation

November 23, 2002

Advertisement

— David Wittig, under indictment on federal fraud and money-laundering charges, resigned Friday as president and chief executive officer of Westar Energy Inc.

Wittig, 47, is under federal indictment for bank fraud unrelated to Westar and was suspended Nov. 7 from his duties at the company.

âÂÂI look forward to a new style of management and new objectives,â said John Wine, a member of the Kansas Corporation Commission, which recently ordered a reorganization of Westar.

The resignation was accepted by WestarâÂÂs board of directors and was effective immediately. The company would say only that it had not made, nor had it agreed to make, any payments to Wittig in connection with his resignation. The resignation also covered WittigâÂÂs positions on the board of directors and all Westar subsidiaries.

Westar already was seeking an interim CEO after a federal grand jury indicted Wittig on money laundering, conspiracy and four counts of submitting false entries, books, reports or statements to a federally insured bank, among other charges.

The indictment involves an alleged scheme between Wittig and Clinton Odell Weidner II, 49, former president of TopekaâÂÂs Capital City Bank, to illegally funnel money to the bank official for use in a real estate deal. The two men, both Kansas University graduates, have pleaded innocent and are to stand trial Jan. 22 in U.S. District Court in Topeka.

Federal regulators also are looking into the accounting practices of Westar, which is the stateâÂÂs largest electric utility.

In addition, the federal government is investigating aircraft leased by the companyâÂÂs subsidiaries and compensation to company executives, including Wittig.

Wittig earlier asked WestarâÂÂs board to place him on administrative leave without pay while he fought the federal charges.

Company spokesman Doug Lawrence declined to comment on when a new president and chief executive would be named. Currently, WestarâÂÂs daily operations are being handled by members of the board and other top executives.

While not connected to the issue of replacing Wittig, the Kansas Corporation Commission has ordered Westar to reorganize its business to protect electric consumers from risks associated with WestarâÂÂs nonutility business interests. Those include an 88 percent share of Protection One, a monitored security firm.

The commission also ordered Westar to reduce its more than $3 billion in debt and move its utility operations into one or more subsidiaries.

James Zakoura, an attorney representing the trade group Kansas Industrial Consumers, said he was âÂÂvery surprisedâ Wittig resigned.

âÂÂWestar has the opportunity to go forward and be the great utility that it once was,â Zakoura said.

Westar, formerly known as Western Resources Inc., provides electric service to about 647,000 Kansans through KGE, its utility subsidiary in southern Kansas, and KPL in northern Kansas, including Lawrence.

Wittig is not the only recent departure from Westar. John C. Dicus recently retired from the companyâÂÂs board of directors. Dicus, 69, who has served on WestarâÂÂs board since 1990, is chairman and chief executive officer of Capitol Federal Savings in Topeka. He also serves on the Kansas University Endowment AssociationâÂÂs executive committee.

Before the announcement, WestarâÂÂs stock closed up 63 cents Friday at $9.75 in trading on the New York Stock Exchange.

Commenting has been disabled for this item.