David Wittig
Encyclopedia
David Wittig is the former chief executive officer
of Topeka, Kansas
-based Westar Energy
, a utility company.
Born in Kansas City, Missouri
, Wittig became a Wall Street
investment banker.
In 1995, Wittig, having earned millions in New York, was asked to return to Kansas as an executive at Western Resources (later re-named Westar Energy
) by John E. Hayes, then CEO of Western and a customer of Wittig's at Salomon Brothers
. At that time, Warren Buffett
had taken over Salomon in the wake of a trading scandal "and decided to cut the exorbitant compensation of the firm’s managing directors." Wittig accepted the Western invitation, an d was named President in 1998 and Chairman and CEO in January 1999. He quickly became one of Topeka's most prominent citizens and was a generous contributor to local charities. Wittig started the Multi-cultural Business Scholars Program at the University of Kansas
and established a $250,000 scholarship in his family's name. He then purchased and renovated the mansion of former Kansas governor Alf Landon
, the 1936 presidential nominee of the Republican Party
. Wittig's remodeling of the home (appraised at roughly $2 million, compared to the median Topeka single family home value of $125,000) later became subject to much controversy.
Among other unconventional initiatives taken by Wittig at Westar, he "bought around 30 percent of ADT
, the home-security company, and then sold it for a pre-tax profit of $865 million to Tyco
, making more for the staid utility in one year than it had made in many."
In 2002, it was revealed that there was some evidence that a Topeka banker had entered into an illegal loan with Wittig. The banker, Clinton (Del) Weidner, well known in Topeka for his charitable efforts, had informed Wittig that he was considering investing in a property development in Arizona
and was in need of a $1.5 million loan to make a proper investment in the venture. Wittig loaned Weidner $1.5 million and Weidner increased the bank's line of credit to Wittig, ultimately by $2 million. The two men faced trial in 2003, and both were found guilty as charged. In February 2004, Weidner was sentenced to six years and six months in a federal prison in North Dakota
. Wittig that same month was sentenced to four years in prison and fined $1 million.
Concurrent with the loan to Weidner becoming public, Wittig and corporate strategy vice president Douglas Lake resigned from Westar amid charges of "looting" the utility company. Prosecutors contended that the two men had unjustly compensated themselves and used the company jet for non-business-related matters. The two men were put to trial on 39 charges in fall 2004. The tide seemed to be in favor of the prosecution, but the trial ended with a hung jury in December. A retrial with an added 40th charge was conducted during the late summer of 2005. On September 12, Wittig was convicted of 39 counts while Lake was convicted of 30; both were convicted of the 40th charge, forfeiture, later that week. On April 4 2006, US District Judge Julie Robinson sentenced Wittig to 18 years and ordered him to pay a $5 million fine in addition to $14.5 million in restitution. Wittig faced a maximum of 455 years behind bars and intended to appeal.
On January 5, 2007, the 10th U.S. Circuit Court of Appeals overturned the convictions of Wittig and Lake in the Westar Energy case. Wittig was freed from prison on February 12, 2007.
Wittig was scheduled to be retried for the third time for looting Westar in September 2008. With delays, in July 2010, the new trial was set to begin September 20. However, the trial judge first was "expected to rule whether to proceed at all (and, if so, on what basis), in light of the Supreme Court’s ruling
[in June] on the conviction of the former Enron executive Jeffrey Skilling
, which appears to limit the government’s use of the so-called honest services statute
to seek convictions in corruption cases. A motion to dismiss the case is before" the judge, Julie A. Robinson
.
In 2010 all charges against Wittig were dismissed.
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of Topeka, Kansas
Topeka, Kansas
Topeka |Kansa]]: Tó Pee Kuh) is the capital city of the U.S. state of Kansas and the county seat of Shawnee County. It is situated along the Kansas River in the central part of Shawnee County, located in northeast Kansas, in the Central United States. As of the 2010 census, the city population was...
-based Westar Energy
Westar Energy
Westar Energy is an investor owned electric utility headquartered in Topeka, Kansas. Westar is the largest electric company in Kansas, serving 687,000 residential, commercial and industrial customers in the eastern third of the state. Westar Energy generates more than 27,000,000 megawatt-hours of...
, a utility company.
Born in Kansas City, Missouri
Kansas City, Missouri
Kansas City, Missouri is the largest city in the U.S. state of Missouri and is the anchor city of the Kansas City Metropolitan Area, the second largest metropolitan area in Missouri. It encompasses in parts of Jackson, Clay, Cass, and Platte counties...
, Wittig became a Wall Street
Wall Street
Wall Street refers to the financial district of New York City, named after and centered on the eight-block-long street running from Broadway to South Street on the East River in Lower Manhattan. Over time, the term has become a metonym for the financial markets of the United States as a whole, or...
investment banker.
In 1995, Wittig, having earned millions in New York, was asked to return to Kansas as an executive at Western Resources (later re-named Westar Energy
Westar Energy
Westar Energy is an investor owned electric utility headquartered in Topeka, Kansas. Westar is the largest electric company in Kansas, serving 687,000 residential, commercial and industrial customers in the eastern third of the state. Westar Energy generates more than 27,000,000 megawatt-hours of...
) by John E. Hayes, then CEO of Western and a customer of Wittig's at Salomon Brothers
Salomon Brothers
Salomon Brothers was a bulge bracket, Wall Street investment bank. Founded in 1910 by three brothers along with a clerk named Ben Levy, it remained a partnership until the early 1980s, when it was acquired by the commodity trading firm Phibro Corporation and then became Salomon Inc. Eventually...
. At that time, Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
had taken over Salomon in the wake of a trading scandal "and decided to cut the exorbitant compensation of the firm’s managing directors." Wittig accepted the Western invitation, an d was named President in 1998 and Chairman and CEO in January 1999. He quickly became one of Topeka's most prominent citizens and was a generous contributor to local charities. Wittig started the Multi-cultural Business Scholars Program at the University of Kansas
University of Kansas
The University of Kansas is a public research university and the largest university in the state of Kansas. KU campuses are located in Lawrence, Wichita, Overland Park, and Kansas City, Kansas with the main campus being located in Lawrence on Mount Oread, the highest point in Lawrence. The...
and established a $250,000 scholarship in his family's name. He then purchased and renovated the mansion of former Kansas governor Alf Landon
Alf Landon
Alfred Mossman "Alf" Landon was an American Republican politician, who served as the 26th Governor of Kansas from 1933–1937. He was best known for being the Republican Party's nominee for President of the United States, defeated in a landslide by Franklin D...
, the 1936 presidential nominee of the Republican Party
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
. Wittig's remodeling of the home (appraised at roughly $2 million, compared to the median Topeka single family home value of $125,000) later became subject to much controversy.
Among other unconventional initiatives taken by Wittig at Westar, he "bought around 30 percent of ADT
ADT
ADT, as an acronym, may refer to:*Abstract data type, a computer programming term*Alternating decision tree, another term in computer programming*Algebraic data type, a term from functional programming...
, the home-security company, and then sold it for a pre-tax profit of $865 million to Tyco
Tyco
Tyco may refer to:* Tyco International, a diversified industrial conglomerate* Tyco Electronics, a former segment of Tyco International* Tyco Toys, a division of Mattel...
, making more for the staid utility in one year than it had made in many."
In 2002, it was revealed that there was some evidence that a Topeka banker had entered into an illegal loan with Wittig. The banker, Clinton (Del) Weidner, well known in Topeka for his charitable efforts, had informed Wittig that he was considering investing in a property development in Arizona
Arizona
Arizona ; is a state located in the southwestern region of the United States. It is also part of the western United States and the mountain west. The capital and largest city is Phoenix...
and was in need of a $1.5 million loan to make a proper investment in the venture. Wittig loaned Weidner $1.5 million and Weidner increased the bank's line of credit to Wittig, ultimately by $2 million. The two men faced trial in 2003, and both were found guilty as charged. In February 2004, Weidner was sentenced to six years and six months in a federal prison in North Dakota
North Dakota
North Dakota is a state located in the Midwestern region of the United States of America, along the Canadian border. The state is bordered by Canada to the north, Minnesota to the east, South Dakota to the south and Montana to the west. North Dakota is the 19th-largest state by area in the U.S....
. Wittig that same month was sentenced to four years in prison and fined $1 million.
Concurrent with the loan to Weidner becoming public, Wittig and corporate strategy vice president Douglas Lake resigned from Westar amid charges of "looting" the utility company. Prosecutors contended that the two men had unjustly compensated themselves and used the company jet for non-business-related matters. The two men were put to trial on 39 charges in fall 2004. The tide seemed to be in favor of the prosecution, but the trial ended with a hung jury in December. A retrial with an added 40th charge was conducted during the late summer of 2005. On September 12, Wittig was convicted of 39 counts while Lake was convicted of 30; both were convicted of the 40th charge, forfeiture, later that week. On April 4 2006, US District Judge Julie Robinson sentenced Wittig to 18 years and ordered him to pay a $5 million fine in addition to $14.5 million in restitution. Wittig faced a maximum of 455 years behind bars and intended to appeal.
On January 5, 2007, the 10th U.S. Circuit Court of Appeals overturned the convictions of Wittig and Lake in the Westar Energy case. Wittig was freed from prison on February 12, 2007.
Wittig was scheduled to be retried for the third time for looting Westar in September 2008. With delays, in July 2010, the new trial was set to begin September 20. However, the trial judge first was "expected to rule whether to proceed at all (and, if so, on what basis), in light of the Supreme Court’s ruling
Skilling v. United States
Skilling v. United States, 561 U.S. ___ , is a United States Supreme Court case interpreting the honest services fraud statute, . The court held, in the case involving former Enron CEO Jeffrey Skilling, that the honest services fraud statute, which prohibits "a scheme or artifice to deprive another...
[in June] on the conviction of the former Enron executive Jeffrey Skilling
Jeffrey Skilling
Jeffrey Keith "Jeff" Skilling is the former president of Enron Corporation, headquartered in Houston, Texas. In 2006 he was convicted of multiple federal felony charges relating to Enron's financial collapse, and is currently serving a 24-year, four-month prison sentence at the Federal...
, which appears to limit the government’s use of the so-called honest services statute
Honest services fraud
Honest services fraud refers to a 28-word sentence of , added by the United States Congress in 1988, which states: "For the purposes of this chapter, the term, scheme or artifice to defraud includes a scheme or artifice to deprive another of the intangible right of honest services."The statute...
to seek convictions in corruption cases. A motion to dismiss the case is before" the judge, Julie A. Robinson
Julie A. Robinson
Julie Ann Robinson is a United States federal judge.Born in Omaha, Nebraska, Robinson received a B.S. from the University of Kansas in 1978 and a J.D. from the University of Kansas School of Law in 1981. She was a law clerk, Private practice, Kansas in 1981. She was a Law clerk, Hon. Benjamin E....
.
In 2010 all charges against Wittig were dismissed.