Washington ? Two former executives of Westar Energy Inc. — the power company that serves Lawrence and much of Kansas — face dozens of charges alleging they stole millions of dollars from the utility and destroyed evidence to try to cover up the crimes, federal officials said Thursday.

A federal grand jury in Kansas returned indictments against former Westar chief executive officer David Wittig and former executive vice president Douglas Lake.

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The indictments alleges Wittig and Lake “sought to systematically loot Westar of money and assets” and hindered the grand jury’s investigation by deleting or destroying records.

Federal authorities are seeking the return of $25 million from Wittig — including the restored mansion of the late Kansas Gov. Alf Landon in Topeka — and $7 million from Lake, money prosecutors say was derived from illegal activities.

The 40-count indictment, returned Wednesday by a federal grand jury in Topeka, charges Wittig, 48, of Topeka, and Lake, 53, of New Canaan, Conn., each with one count of conspiracy to defraud Westar, 14 counts of circumventing internal accounting controls and falsifying books and records, eight counts of wire fraud, 10 counts of submitting false statements, and six counts of engaging in monetary transactions derived from an unlawful activity. The indictment also seeks forfeiture of proceeds derived from criminal activity.

Wittig and Lake are each scheduled to make their initial appearance at 11 a.m. Dec. 30, at U.S. District Court in Kansas City, Kan., before U.S. Magistrate Judge James P. O’Hara. The charges carry penalties ranging from five to 20 years.

Wittig, former Westar chief executive officer, was indicted last year and convicted this year on federal fraud charges, but they were unrelated to Westar business. Wittig, a Kansas University alumnus, resigned as Westar’s chairman, president and CEO a year ago to defend himself against those federal charges.

In May, Westar’s board of directors issued a 376-page report charging that Wittig sought to enrich himself, tried to stifle dissent within the company and misused corporate aircraft. The report also accused Wittig of having aircraft flight logs falsified.

The directors’ report also raised questions about political activity involving Wittig and other Westar executives.

E-mails disclosed by the company earlier this year detailed a plan for Westar and its top executives to give $56,000 to Republican congressional campaigns last year “to get a seat at the table” of a House-Senate conference committee on an energy bill. House members on the committee supported a regulatory exemption sought by Westar.

Following the disclosures, the Westar board revised its policy for making political donations.

Westar is the state’s largest electric company, serving about 640,000 business and residential customers.

In an announcement Thursday, Eric Melgren U.S. Attorney for Kansas; Acting Deputy Attorney General James B. Comey, Jr., and FBI Assistant Director Grant Ashley explained the charges.

They said in Wittig and Lake’s brief tenure with Westar, the company’s stock prices went from a high of $44 a share to less than $9.

As utility rates soared and debt increased to more than $3 billion — placing the company on the brink of bankruptcy — Wittig and Lake allegedly received more than $25 million and $7 million, respectively, in compensation and benefits, according to the prosecutors.

The indictment alleges that Wittig and Lake deprived Westar and its shareholders of the right to honest services and obtained compensation, bonuses and assets under false pretenses from 1995, when Wittig was hired, through 1998, when Lake was hired, until 2002.

“Top executives hold a company in trust for the people who really own it — the shareholders. They are obligated to tell the truth to their shareholders, their boards, and regulators,” said Comey, who is the head of President Bush’s Corporate Fraud Task Force. “Whether they work on Wall Street or on Main Street, executives who violate that responsibility — and the law — must be held accountable.”

The federal officials said the indictment alleges that Wittig and Lake “sought to systematically loot Westar of money and assets; circumvented internal controls, programs and practices designed to insure the accountability for Westar assets; sought to consolidate all power and authority in themselves in ridding the Board of Directors of Westar of outspoken and independent members, reducing the size of the Board when independent members resigned in protest, reducing management, and conducting investigations and monitoring phone calls of employees to identify employees contacting the press or the Kansas Corporation Commission.”

According to the indictment, Wittig and Lake structured a subsidiary, Westar Industries, Inc.,
“to loot assets from the utility and leave debt behind for ratepayers; structured employment agreements with Westar containing ‘change in control’ provisions that allowed Wittig and Lake to dictate the terms and timing under which they left the company while reaping substantial rewards; and hindered the grand jury investigation of their activities including deleting and destroying or attempting to delete and destroy records of Westar,” the federal officials said.

The indictment also alleges that, “Wittig and Lake made systematic use of the corporate aircraft for their personal benefit, while falsely reporting such use as being for business, and caused false corporate reports and false personal and corporate tax returns to be filed,” the federal officials said.

The indictment also alleges that Wittig forbade the company’s director of internal auditing from doing an audit on the use of the corporate aircraft, according to the federal officials.

If convicted on the indictments, Wittig and Lake would each face a maximum of five years in federal prison, without parole, for each count of conspiracy; a maximum of 10 years for each count of circumventing internal accounting controls; a maximum of 20 years for each count of wire fraud; a maximum of five years for making false statements to an agency of the United States; and a maximum of 10 years for each count of engaging in a monetary transaction from property derived from an unlawful activity, the federal officials said.

The grand jury indictment also seeks forfeiture of all the real and personal property traceable to these offenses, which includes about $25 million from Wittig and more than $7 million from Lake in salary, compensation and benefits paid during their employment at Westar.

The indictment also seeks forfeiture of the Landon Mansion; nearly $2 million in art and interior furnishing; a 2001 Ferrari; and all remaining stock held by Wittig or Lake of Western Resources, Westar or any affiliated corporation, the federal officials said.

“Senior executives have an obligation to manage the publicly traded companies with which they
are entrusted in the best interests of the shareholders,” Melgren said in a prepared statement. “To manipulate a company for their own financial interests, as alleged in this indictment, would be a breach of this obligation.”

Melgren said the indictment “alleges nothing less than theft from innocent shareholders. This type of alleged conduct is not only bad for business, it is illegal and such conduct will be prosecuted like the serious crime it is.”

Ashley, the FBI assistant director, said the FBI, working with the Bush Corporate Fraud Task Force, the IRS and the SEC, “will continue to devote whatever resources necessary to uncover evidence of
impropriety and breaches of integrity that empty the pockets of investors.”