Westar to pursue civil case against former execs

TOPEKA, Kan.

Westar Energy Inc. said it will continue to pursue civil claims in arbitration against two Westar Energy Inc. executives who were accused of looting the Kansas utility, despite criminal charges being dropped.

The U.S. Department of Justice said Friday it would drop criminal charges against former Westar CEO David Wittig and his top strategy officer, Douglas Lake. Wittig and Lake had been charged with conspiring to inflate their compensation and taking steps to hide their actions from the Topeka, Kan., company. 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.

Westar Executive Vice President Jim Ludwig said the company is "extremely disappointed" in the decision by federal prosecutors to drop charges.

"Our investors still deserved an opportunity, after this long ordeal, to see whether a jury would hold them accountable for their actions," he said in a statement late Friday. "Our investors, who have borne the damages and expenses from this process, have not received any restitution."

The company plans to pursue civil claims in an arbitration proceeding that had been put on hold until the criminal proceedings were completed.

A federal judge on Friday dismissed the criminal charges after prosecutors requested that they be dropped. The request came hours after Barry Grissom was sworn in as the new U.S. attorney for Kansas.

Patrick McInerney, an attorney for Lake, said that he credited the Justice Department "for recognizing how flawed this case was."

McInerney said a recent U.S. Supreme Court ruling narrowing the scope of the "honest services" law -- which made it a crime to "deprive another of the intangible right to honest services" -- crippled the government's case against Wittig and Lake. 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.

Shares of Westar rose 16 cents to $23.58 in afternoon trading.