The utility's one-time chief strategic officer filed a motion in federal court seeking to have Westar held in civil contempt. The motion came after U.S. District Judge Julie Robinson ordered Westar to pay half the past-due legal fees of Lake's attorneys and those of former Westar Chairman and Chief Executive David Wittig. Lake contends Westar willfully disobeyed Robinson's order by seeking to have him post an equivalent bond, plus $1 million to secure future fees.
"Westar's motion is a sham, with no basis either procedurally or substantively, designed only to delay compliance with the Court's Order," the motion alleges.
Karla Olsen, a Westar spokeswoman, declined to comment on the motion, saying the company had not had a chance to review it. Lake and Wittig were indicted on charges of looting the Topeka-based utility and face a third trial in January. Their first trial ended in a mistrial. The two were convicted in a second trial, but a federal appeals court this year tossed out the convictions.
Under Westar's articles of incorporation, the utility is required to pay any costs that Wittig and Lake incur in civil or criminal proceedings, unless they are found guilty of a crime. The battle over the men's legal fees is shaping up as a major bone of contention and could even lead to the dismissal of their indictment.
Earlier, a federal judge in New York dismissed indictments against 13 of 16 former executives of KPMG after finding the government had pressured the accounting firm to cut off payment of their legal fees. Westar paid the attorney fees incurred by Wittig and Lake in their first trial, nearly $4.7 million in Lake's case. But asserting that the fees were excessive, the utility refused to pay the fees they incurred in their second trial.
Lake claims his fees amounted to $7.3 million. In her order, Robinson directed Westar to pay more than $3.15 million in past-due fees to Lake. She also told Westar to advance all of his legal fees and expenses in his third trial and, if necessary, appeal.