Although overshadowed by the Lay-Skilling trial, former Westar Energy, Inc. CEO David Wittig and his corporate right hand man Douglas Lake were sentenced yesterday to 18 and 15 years in prison after being convicted last year of looting the utility of millions of dollars in unapproved compensation. An earlier contentious trial of the two former executives had ended in a mistrial in late 2004 after another federal jury in 2003 convicted Mr. Wittig of bank fraud charges in a case that was not directly related to Westar. Federal prosecutors had sought life sentences against the 50 year-old Wittig and the 55 year-old Lake.
Wittig and Lake each faced charges relating to allegations they looted the largest electric utility in Kansas after the pair left Westar late in 2002 amidst allegations of misuse of corporate funds. Subsequently, Westar under Mr. Wittig was implicated in the scandal surrounding efforts to fund Houston Congressman Tom DeLay’s political action committee. Westar’s contribution of funds during 2002 to the DeLay’s PAC was among the allegations of wrongdoing that led to DeLay’s indictment in Travis County last year.

Wittig, who was a former star deal maker at Salomon Brothers, became CEO of Westar in 1998 and immediately turned the sleepy Midwestern utility into a deal machine. Wittig was paid compensation of more than $25 million in his seven years Westar, and had no reservations about showing it in staid Topeka, where Westar is based. He bought the largest home in town, which is a 17,000-square-foot mansion that former Kansas governor and one-time presidential candidate Alf Landon built. Wittig then spent over $2 million in art and interior decoration on the pad while driving around Kansas in a $230,000 Ferrari 550 Maranello. After some early success, Mr. Wittig’s fast deal plan at Westar faltered and the company’s stock price fell from $44 to $9 as Westar came under increasing pressure from shareholders and investigators, including the Travis County grand jury.
The first trial of Wittig and Lake was particularly wild. U.S. District Judge Julie Robinson, who is a former prosecutor, battled constantly with Wittig’s defense attorneys — Adam Hoffinger and Edward Little — as the defense accused the judge of favoring the prosecution in her rulings. At several points during that trial, Judge Robinson angrily lectured the attorneys for their courtroom demeanor, which included rolling their eyes during witness testimony. Finally, a day before closing statements, the friction between the judge and the defense attorneys boiled over as Judge Robinson took the extraordinary measure of barring one of Mr. Lake’s lawyers from the courtroom for the remainder of the trial.
For excellent background on Westar’s involvement with Rep. DeLay, the PAC, and the Travis County investigation, check out Charles Kuffner’s comprehensive posts on the subject.