KANSAS CITY, KAN. — A former Westar Energy Inc. executive vice president accused of looting the Topeka-based company testified Tuesday that he had nothing to do with several of the charges against him and a former CEO, including allegations that they misused corporate planes.
Douglas T. Lake took the stand after attorneys for co-defendant David Wittig, former chief executive officer of Westar, rested their case.
Each man, on trial in U.S. District Court, faces 40 various counts of fraud-related charges and could spend at least 10 years in prison if convicted.
Lake, the only one of the two men to take the stand, testified that he did not misuse company jets, did not abuse the company relocation program and did not have a split-dollar life insurance policy like the one that allowed Wittig to sell death benefits back to the company for $2 million. Lake also testified that he was not involved with controversial renovations to Westar offices, which he said were under way before he arrived at the company in Sept. 1998.
Prosecutors have charged both Wittig and Lake with routinely using Westar's jets for personal travel and failing to report that benefit to securities officials or the Internal Revenue Service. Defense attorneys have responded by saying the two men were never told to report the trips as income and arguing most company officials used the planes for personal travel.
Although the federal indictment alleges that he used Westar jets "as a shuttle to and from his primary residence in New York and his vacation home in West Palm Beach, Fla.," Lake said that was not the case. He was told by Wittig before he was hired that corporate planes would be made available to him because of his extensive business travel to New York, Lake said. Further, Lake testified that he didn't have a vacation home in West Palm Beach and that when he traveled there, he usually stayed with his in-laws.
In testimony Tuesday morning, Keith Swirsky, an aviation law attorney, said the use of corporate jets, such as those owned by Westar, could increase a company's profitability by reducing the time executives spent traveling. That allows executives to attend more meetings, which can develop into greater business opportunities for their firms.
Through the company relocation program, Lake received $262,000, representing 15 percent of the $1.7 million New York home he did not sell. But Lake testified Tuesday that he did not abuse that program, because he subsequently purchased a $410,000 home in Topeka. Lake said it would have been silly to sell his former residence because he would be spending much of his time in New York working with investment bankers.
Tuesday was the fourth day of defense testimony, which began after prosecutors rested last week. The trial, which began on Oct. 19, will break for Thanksgiving and resume Nov. 29.
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