The Board of Regents and UW System have asked the Wisconsin Department of Justice to pursue civil legal action against former UW-Oshkosh Chancellor Richard Wells and former Vice-Chancellor of Administrative Services and Chief Business Officer Thomas Sonnleitner. Wells and Sonnleitner are being sued for improper financial transactions that occurred under the former administration from 2010-2014 related to five real estate projects.
Wells was chancellor from October 2000 to August 2014. Sonnleitner served as Vice Chancellor of Administrative Services from 2000-2016. Sonnleitner stepped down from his Vice Chancellor and CBO roles on March 1, 2016. He retired on May 30, 2016.
From 2010-2014, the UW-Oshkosh Foundation participated in the renovation of the downtown Oshkosh Best Western Waterfront Hotel and Oshkosh Sports Complex. The UWO Foundation also constructed two biodigesters and the Alumni Welcome and Conference Center during this time frame. The UWO Foundation is an independent 501(c)(3) non-profit entity.
According to the DOJ complaint, Wells and Sonnleitner made illegal financial transfers from UWO to the UWO Foundation related to these five real-estate projects. Wells was Sonnleitner’s supervisor, and neither properly recorded those transfers in the UWO’s accounting records. The UWO Foundation was established to provide support to the university, and funding should have only flowed from the foundation to UWO.
In addition, Wells and Sonnleitner executed illegal guarantees pledging UWO’s financial support for the Foundation’s bank loans related to the projects. The guarantees asserted that UWO would make debt payments for the UWO Foundation if it could not meet its financial obligations. The Wisconsin Constitution and UW System policies do not allow a public entity to support a private organization.
“This is both unacceptable and appalling. Dr. Wells and Mr. Sonnleitner were top personnel who were far afield from the rules and statutes that govern university operations. They had no right to make these promises or sign these documents. They created a mess, which we are acting swiftly and decisively to clean up and show our citizens this will not be tolerated,” said Board of Regents Audit Committee Chair Michael M. Grebe on behalf of the Board.
“We expect our employees to conduct themselves in an honorable, accountable manner. Regrettably, their actions do not represent the values and integrity of the System, which is why we must take this legal action,” said UW System President Ray Cross.
“We take pride in the strength of our reputation at UW-Oshkosh. While Dr. Wells and Mr. Sonnleitner were long-serving members of our campus community, they broke a sacred trust. I hope our citizens recognize this was isolated behavior and it is not indicative of how we run our institution,” said UW-Oshkosh Chancellor Andrew Leavitt. “We will continue to serve our students with integrity and move forward together.”
Because the actions of Wells and Sonnleitner were unconstitutional, UWO could not legally guarantee the Foundation’s bank loans. UWO and the UW System cannot be held responsible for the Foundation’s project expenses or debt service.
