Criminal charges were filed Thursday against two former UW-Oshkosh officials accused of misconduct in public office in connection with loan guarantees of more than $31 million to real estate ventures of the UW-Oshkosh Foundation.
The Wisconsin Department of Justice brought five felony counts of misconduct in public office each against former chancellor Richard H. Wells and former vice chancellor of administrative services Thomas Sonnleitner.
According to a criminal complaint filed in Winnebago County, the men knowingly made financial guarantees in excess of their authority to four limited liability companies established by the foundation: UW-Oshkosh Foundation Hotel Project, the UW-Oshkosh Foundation Rosendale Biodigester, UW-Oshkosh Foundation–Witzel, and UW-Oshkosh Foundation Alumni Welcome and Conference Center. The men made additional guarantees on behalf of the campus to the foundation in connection with its obligations related to the renovation of the Oshkosh Sports Complex, according to the complaint.
Wells and Sonnleitner made specific loan guarantees of $31.2 million between June 2012 and the present in connection with projects undertaken by the foundation or its associated companies, according to the complaint. In addition the men pledged that the university would cover all debts related to a hotel renovation, construction of two biodigesters, construction of a welcome and conference center, and renovation of a sports complex.
The UW System Board of Regents filed a civil lawsuit against Wells, Sonnleitner, and the UW-Oshkosh Foundation in 2017 in Dane County Circuit Court. The case is currently stayed.
Regents also asked DOJ to pursue civil and criminal charges against Wells and Sonnleitner, Michael M. Grebe, chair of the Regents Audit Committee, said Thursday in a statement.
The former campus leaders “broke the sacred trust” they carried as public UW officials, Grebe said. “The board took this unprecedented action because Dr. Wells and Mr. Sonnleitner failed to follow rules and statutes that govern university operations,” Grebe said. “We are working diligently to rebuild confidence in our institutions and to improve the transparency of foundation transactions. We support these charges by DOJ, and will continue to seek justice in this case while serving students with integrity and transparency.”
After allegations surfaced of inappropriate loan guarantees surfaced, legislators ordered a state audit of UW campus dealings with their affiliate organizations like foundations. A Legislative Audit Bureau report released in March found lax reporting procedures at some campuses, leading to the university covering some costs of organizations created to support the campuses.
Milwaukee attorney Raymond Dall’Osto, representing Wells, did not immediately respond to messages seeking comment, but the Wisconsin State Journal reported that he said in a statement that Wells is "saddened that the Attorney General's office has chosen to issue criminal charges against him, based upon memoranda of understanding, loans and undertakings through the UW-Oshkosh Foundation, which were intended to benefit the university."
Sonnleitner’s attorney Steve Biskupic, a former U.S. Attorney for the Eastern District of Wisconsin, did not immediately respond to a request for comment.
Each charge of misconduct in public office brought against Wells and Sonnleitner carries a penalty, upon conviction, of up to 3 years, 6 months in prison and fines of up to $10,000.