TOPEKA — Former Westar Energy executive David Wittig will receive $36 million plus legal fees to settle a long-running dispute with the utility company.
Wittig served prison time before federal charges that he looted Westar were dropped.
The settlement also will give Wittig $3.1 million in legal fees. The company also will release $2.7 million in stock compensation to Wittig. An arbitration settlement was completed in July, the utility said.
Westar spokeswoman Gina Penzig said the sum will be paid with money shareholders set aside, not by ratepayers.
"We believe this closes the chapter," she added.
Wittig and former top strategy officer Douglas Lake were indicted in 2003 on charges they conspired to inflate their compensation at the Topeka-based company and then tried to hide their actions. They also were charged with wire fraud and money laundering.
The first trial ended in mistrial when jurors couldn't reach a verdict. Convictions stemming from a second federal trial were overturned by the 10th U.S. Circuit Court of Appeals in Denver.
Federal prosecutors filed new charges against Wittig and Lake before ultimately dropping the criminal case in August 2010.
Wittig faced one count of conspiracy and 14 counts of circumvention of Westar's internal financial controls. Lake, of New Canaan, Conn., faced one count of conspiracy and 13 counts of circumvention of internal financial controls.
Lake settled with the company this spring for $21 million and $5.3 million in legal fees.
Dan Lykins, a Topeka attorney and Westar shareholder for more than 25 years, has been critical of Wittig for years. He said the outcome was expected, although he was extremely disappointed.
"I knew with him basically winning in court, I knew he was going to get a huge payday from Westar Energy," Lykins said.
Lykins, also a member of the Kansas Board of Regents, said he was disappointed Westar's directors didn't take steps to control Wittig's actions while he was running the company.
The two former executives claimed the Topeka-based Westar owed them compensation because the utility ended their employment contracts early, as well as for legal fees incurred while defending themselves in federal court on Westar-related charges.
Westar had set aside nearly $90 million to cover Wittig and Lake's claims, according to the Kansas Corporation Commission, which regulates utilities.
"Westar shareholders will pay the dollar amounts associated with this settlement, not customers," KCC Chairman Mark Sievers said. "Not through increased electric rates or billing fees, or any other means, now or in the future."
Lykins said even though the settlement is paid by money the shareholders set aside, those funds are raised by utility bills paid by customers who purchase electricity, "so indirectly everyone's paying."
Wittig served time in federal prison for an unrelated banking case not tied to his tenure at Westar.