Archive for Saturday, May 17, 2003

Westar raises campaign-finance questions

Internal report’s authors say utility may have broken federal law with contributions to congressional candidates

May 17, 2003


— Political contributions made to federal candidates by former Westar Energy Inc. executives may have been illegal, according to an investigative report commissioned by the company.

Corporate donations to candidates for federal office are prohibited by law, but former top leaders of Westar rounded up contributions from company executives to give to candidates for Congress, the report said.

The 367-page report detailed numerous allegations against Westar's former chief executive David Wittig. A portion of the report analyzed political contributions made by Westar executives under Wittig's tenure.

One internal Westar memo in the report suggests the company through its campaign contributions was buying "a seat at the table" of a congressional conference committee working on legislation that would have affected Westar.

Wittig resigned in November after he was indicted on charges of falsifying bank documents related to a $1.5 million personal bank loan. He has pleaded innocent.

A federal grand jury is looking into other aspects of his management at Westar, the largest electric utility in Kansas. Westar also is being investigated by the Securities and Exchange Commission and is under orders to restructure by state regulators.

The investigative report was commissioned by Westar after the grand jury started issuing subpoenas for Westar documents.

Wittig has declined to comment on the investigative report.

Candidates were picked

According to the report, Wittig, former chief administrative officer Carl Koupal, and former vice president of public affairs Doug Lawrence, would work together deciding which candidates to support, how much money should be given and then ask other officers of the company to contribute certain amounts.

Koupal, who retired in fall 2001, could not be reached for comment. Lawrence, who left Westar five months ago but still lobbies for the company, said the report indicated "there needs to be a closer look at these issues and that policies need to be established." He declined to comment further.

According to the report, some officers said they felt pressured to contribute to the chosen candidates, though none reported having been told that his or her job was in jeopardy if they didn't.

The solicitation of contributions was legal, the report said, but added that Koupal and Lawrence may have violated federal elections law by becoming "conduits" for the contribution checks. That means they may have been acting on behalf of the corporation rather than as individuals.

"I can't say that they have violated the law," said Kelly Huff, a spokeswoman with the Federal Election Commission. Though when told details of the report, she said, "there could be a problem with that."

Huff said the only way the FEC would investigate was if someone lodged a complaint or if the matter drew the attention of one of the commissioners.

'Seat at the table'

Carol Williams, executive director of the Kansas Governmental Ethics Commission, said she didn't believe there were any violations of state campaign finance law by Westar. Kansas law does not prohibit corporate contributions to state candidates.

But state utility consumer advocate David Springe said the biggest eye-opener of the section of the report dealing with corporate political activity was the memo from Lawrence to former Westar executive vice president Douglas Lake.

In the May 20, 2002, memo, Lawrence explains that certain congressmen, or their designees, were getting contributions because they were part of leadership on a conference committee dealing with a controversial regulatory issue.

"We have a plan for participation to get a seat at the table, which has been approved by David (Wittig) the total package will be $31,500 in hard money (individual) and $25,000 in soft money (corporate)," the memo said.

"As an American, that's a really troubling statement on the nature of things," Springe said.

Lawrence confirmed writing the memo, but declined to elaborate. "The document speaks for itself," he said.

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