The University of Wisconsin System regents have filed a lawsuit against the UW-Oshkosh’s former chancellor and chief business officer over alleged improper financial transactions with the school’s foundation.
The lawsuit, filed Wednesday in Dane County Court, alleges Chancellor Richard Wells and Chief Business Officer Thomas Sonnleitner illegally transferred millions of dollars from the university to the UW-Oshkosh Foundation between 2010 and 2014 to help the foundation participate in five real estate projects in the city-area. Neither of them properly recorded those transfers in the school’s accounting records.
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The lawsuit also alleges the two executed illegal guarantees pledging the university would back foundation loans related to the projects. The state Constitution and UW System policies don’t allow a public entity, such as a university, to support a private organization. The foundation is a nonprofit.
The lawsuit is the product of an investigation that began in June. The investigation looked at the the financial relationship between UW-Oshkosh and the foundation after the current chancellor questioned funding arrangements for the multi-million dollar UW-Oshkosh Alumni Welcome and Conference Center, according to the Milwaukee Journal Sentinel.
The lawsuit claims money was allegedly illegally transferred to fund a Foundation hotel development project — the Best Western Premier Waterfront Hotel and Conference Center — the alumni welcome center, Oshkosh Sports Complex, Witzel Dry Fermentation Anaerobic Biodigester facility and a Rosendale Dairy biodigester.
Wells was chancellor from October 2010 to Aug. 31, 2014. He was direct supervisor to Sonnleitner, who worked as vice chancellor of administrative services from 2000 through the end of February.
In addition the Board President of the UW-Oshkosh Foundation, Arthur Rathjen, was fired Tuesday, the Milwaukee Journal Sentinel reported.
The university is not commenting publicly on the situation.
Three Republican lawmakers, including Assembly Speaker Robin Vos, released a statement calling the alleged misuse of funds “alarming” and said the “situation” undermines the “integrity of UW-Oshkosh and the UW System as a whole.”
Rep. Michael Schraa, R-Oshkosh, said he was surprised by the allegations.
“Obviously there was intent here,” Schraa said. “So it’s a black eye I think for UW-Oshkosh but I don’t think it’s a death blow.”
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