Wichita A recent U.S. Supreme Court ruling requiring proof of kickbacks or bribes in prosecutions involving the theft of so-called honest services left prosecutors with "little choice" but to dismiss charges against two former Westar Energy executives, the U.S. attorney's office said Monday.
"The law no longer supported our position," U.S. Attorney Barry Grissom said in a statement. "We were duty-bound not to go forward with the prosecution."
Former Westar Chief Executive David Wittig and his top strategy officer, Douglas Lake, were charged in 2003 with conspiring to inflate their compensation from the Topeka-based utility and taking steps to hide their actions.
U.S. District Judge Julie Robinson dismissed all charges against them on Friday at the request of federal prosecutors.
That prompted Jim Ludwig, Westar Energy's executive vice president, to issue a statement late Friday saying the company disagreed with the Justice Department's decision and planned to pursue civil claims in an arbitration proceeding that had been put on hold pending the criminal case. He noted that investors, who had borne the damages and expenses, had not received any restitution.
"We are extremely disappointed that the Department of Justice has given up pursuing justice against Wittig and Lake because we believe our investors still deserved an opportunity, after this long ordeal, to see whether a jury would hold them accountable for their actions," Ludwig said.
A third trial date for the men, who were forced out of Westar in late 2002, had been pending. Their first trial ended in a hung jury and a conviction in their second was overturned.
In June, the U.S. Supreme Court narrowed the scope of the "honest services" law, which made it a crime to "deprive another of the intangible right to honest services." The high court's ruling in the case against former Enron CEO Jeffrey Skilling found that theft of honest services is only relevant in cases involving bribes and kickbacks.
"A great deal of consideration was given to this decision, both here and in Washington" Grissom said.
The government had been forced to return a more than $7 million settlement to Wittig after the 10th Circuit overturned the last conviction.