Archive for Tuesday, August 24, 2010

Frustrating end

It’s frustrating to see federal charges dropped against former Westar Energy executives, but civil actions may still hold the two accountable.

August 24, 2010


After nearly eight years of expensive prosecution, it was frustrating Friday to see federal charges against two former Westar Energy executives simply dismissed.

Federal prosecutors gave no reason on Friday for the motion they filed to dismiss the indictments against David Wittig and Douglas Lake, who were accused of bilking millions of dollars from the company they led. On Monday U.S. Attorney Barry Grissom confirmed speculation that the motion was prompted by a recent U.S. Supreme Court ruling that undercut the prosecution’s case. The charges were dismissed without prejudice, which means they could be refiled, but Grissom’s comments make that seem unlikely.

The first trial for Wittig and Lake ended with a hung jury in December 2004. In a second trial, six months later, the two were found guilty on several counts related to their looting of Westar and were ordered to pay millions of dollars in restitution. That never happened because the 10th Circuit U.S. Court of Appeals threw out their convictions, citing a lack of evidence and problems with a ruling and jury instructions.

Key players in the drama, as well as many in the public, were stunned by Friday’s dismissal. Attorneys for the defendants, predictably, were elated.

An attorney for Lake contended, “This case should not have happened.” And yet, the defendants’ opulent lifestyle, coupled with a rapid decline in Westar finances under their leadership couldn’t help but make the public think otherwise.

Westar officials indicated Friday that the company will continue to pursue civil claims against the two through an arbitration hearing that had been put on hold by the criminal proceedings. Westar owes it to its customers and stockholders to pursue that case vigorously. As Westar executive vice president Jim Ludwig noted, Westar and its stockholders “have borne the damages and expenses from this process” but have received no restitution.

There may have been good reasons for federal prosecutors to drop the indictments on Friday, but Westar also has good reasons to pursue civil claims to hold Wittig and Lake accountable for their actions.


terrapin2 5 years, 1 month ago

Simply more rubbish from the LJW editorial board. Wittig and Lake have suffered enough already. Let it go and let them move on with their lives. While their actions at Westar may been offensive to many, they were not criminal. I assure you that Westar is going to pay far more for this situation than they would have if they had allowed the arbitration panel to issue their decision in 2003.

just_another_bozo_on_this_bus 5 years, 1 month ago

" they were not criminal"

Only because bilking utilities, and in turn their investors and ratepayers, has been ruled not to be criminal by the Supreme Court.

That may be a good thing for the Jeffrey Skillings and Wittigs and other corporate thieves of the world, but this is one area where Congress should work overtime to correct it.

mbulicz 5 years, 1 month ago

Oh no! The unethical people who swindled from millions of captive customers are having a tough, tough time trying to defend their ill-gotten fortunes. O, cruel world!

Westar needs to sue these two into oblivion and get back what was stolen from their customers. Of course, a company that takes out life insurance on its lowest level uninsured employees in order to collect when they die from uncovered illnesses is probably not going to take the high road on this matter either.

Also, I don't think this is merely an editorial board's prerogative. I think that the public at large, and certainly the legal system, heavily favor pursuing thieves and seeking remedy after customers were defrauded. I don't know where I got that from.... maybe centuries of case precedent and legal code?

terrapin2 5 years, 1 month ago

Westar started this whole thing because they wanted scapegoats for their declining stock numbers back in 2002. They did not want to pay Wittig and Lake what was owed them in their employment contracts, so they spent 7 million dollars on an investigation in an attempt to come up with some criminal charges that would prevent them from paying. This money was compensation in the form of stock options etc., money that is still there by the way. They were the biggest stockholders in the company. That is where most of their money came from so why would they steal from themselves? What Westar came up with was bogus. Unless you are a stockholder, which I was at the time, you have not been personally effected by this at all. It has nothing to do with your rates. You were not defrauded personally. If you look at the records of utility companies at the time as a whole, no one was doing particularly well. The industry was being deregulated at the time and you can't blame two men solely for that decline. You seem to forget the approximately 800 million dollars Wittig made for the company when ADT was sold to Tyco. Seems like that profit alone has payed for this 8 year debacle and then some. If they had simply gone to arbitration in 2002 and paid these men what they were owed in their contracts, Westar would have saved a whole lot of time and money. After losing two trials, incurring 8 years of legal fees, and wasting the governments time, they will probably still have to pay them a very large sum of money in arbitration anyway.

olddognewtrix 5 years, 1 month ago

Does Wittig still have his front row seats at Allen Field House?

frank regnier 5 years, 1 month ago

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KS 5 years, 1 month ago

Westar should sue its own Board of Directors and be done with this. Enough already!

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