CEO says policy limited loans to bank president

? Company policy prevented former Capital City Bank president Clinton Odell Weidner II from borrowing more than $100,000 from the bank for a real estate investment, according to testimony Thursday in Weidner’s bank fraud trial.

At the center of the trial, which began Wednesday after two days of jury selection, is a $1.5 million personal loan made by former Westar Energy Inc. chief David Wittig to Weidner. Prosecutors claim Weidner approved a $1.5 million increase in Wittig’s $3.5 million personal line of credit at the bank so Wittig could loan the money to Weidner for a real estate investment in Scottsdale, Ariz.

The current CEO of Capital City Bank, Bob Kobbeman, testified Thursday that bank policy prevented Weidner from receiving a loan from the bank that exceeded $100,000, unless it was for education or home improvements.

Wittig and Weidner were charged with seven felony counts — one each of conspiracy and money laundering, four of making false bank entries and one seeking forfeiture of the $1.5 million plus the Arizona real estate.

On Monday, just as jury selection was about to start, Weidner pleaded guilty to two of the counts of making false bank entries. No plea agreement had been offered by prosecutors, and the jury will try him on the five remaining counts while trying Wittig on all seven.

Assistant U.S. Atty. Richard Hathaway also tried Thursday to show that Weidner used a $20,000 loan from Capital City Bank that was supposed to be for a new motorcycle to pay Wittig the first interest payment on the $1.5 million loan in August 2001.

Kobbeman testified that Weidner wanted the loan for the motorcycle quickly and only for 30 days, though Kobbeman did not know why.

“I believe he was working on a credit facility at another institution,” Kobbeman said, adding that Weidner eventually asked for an extension on the motorcycle loan.

The money was deposited in an account at another bank, which Weidner used to make interest payments to Wittig, according to prosecutors. Days after the deposit, Weidner gave Wittig $26,177.97, court documents show.

When Weidner’s attorney, Pedro Irigonegaray, asked Kobbeman if Weidner bought a Harley Davidson motorcycle, Kobbeman said he didn’t know.

Weidner resigned from the bank after company officials learned about the $1.5 million loan from Wittig. Bank officials said at the time that Weidner was leaving to pursue real estate interests. Weidner’s separation agreement prevented both parties from saying anything negative about each other, Kobbeman testified.

Under cross examination by Irigonegaray, Kobbeman said that at the time his understanding was that bank officials wanted to make sure Weidner was not prematurely accused of wrongdoing.

“It was not up to us to make those judgments,” Kobbeman said.

Weidner’s separation agreement also called for him to continue as a consultant with the bank.

Kobbeman said that Wittig still had checking and trust accounts at Capital City Bank.

Testimony finished at midday Thursday and was expected to continue Monday morning. Prosecutors said they planned to call three more witnesses and could be done presenting their case as early as Monday.