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Former UW-Oshkosh administrators fined in building-finance misconduct case

Former University of Wisconsin-Oshkosh administrators Tom Sonnleitner, left, and Richard Wells listen during a court hearing in Winnebago County Circuit Court in Oshkosh on Wednesday The two former administrators of the University of Wisconsin-Oshkosh pleaded guilty to felony misconduct in connection with a financial scandal involving five building projects. (Doug Raflik/The Fond du Lac Reporter via AP)

Former University of Wisconsin-Oshkosh administrators Tom Sonnleitner, left, and Richard Wells listen during a court hearing in Winnebago County Circuit Court in Oshkosh on Wednesday. The two former administrators of the University of Wisconsin-Oshkosh pleaded guilty to felony misconduct in connection with a financial scandal involving five building projects. (Doug Raflik/The Fond du Lac Reporter via AP)

Two former administrators of the University of Wisconsin-Oshkosh pleaded guilty Wednesday to felony misconduct in connection with a financial scandal involving five building projects.

Former Chancellor Richard Wells, 72, and former Vice Chancellor Tom Sonnleitner, 79, pleaded guilty to one count each of misconduct in office. Wells and Sonnleitner entered their pleas as part of a deal with prosecutors. The two were the only people to be faced with criminal charges in connection with the scandal.

Wells and Sonnleitner admitted to presiding over a scheme that shuffled taxpayer money to a private foundation in order to finance several big construction projects – including an off-campus hotel in downtown Oshkosh and a biodigester nearly 20 miles from the city.

During a hearing on Wednesday, Winnebago County Circuit Court Judge John Jorgensen approved the pleas and dismissed four other counts against each defendant, the Milwaukee Journal Sentinel reported. Each defendant was ordered to pay a $5,000 fine plus more than $70,000 in restitution.

Wells and Sonnleitner apologized in court.

“It was never my intent to hurt the institution; it was to help, and I’m sorry,” Wells said.

Sonnleitner said he only wanted to make sure that students and staff employees had resources they needed to succeed. Neither he nor Wells was alleged to have personally profiting from the arrangement.

Instead, Wells and Sonnleitner were accused of illegally funneling $11 million in university money to the UW-Oshkosh Foundation to help it execute building projects. The law generally allows money to flow from such private foundations to a university, not the other way around.

Wells and Sonnleitner also used illegal “comfort letters” promising that the university would back up loans for the five projects – which also included a campus visitors center, a sports complex and a second biodigester.

The foundation ultimately defaulted on millions of dollars of those loans and went bankrupt in 2017, leaving taxpayers on the hook for debt. Next came a legal fight over whether the illegal comfort letters had in fact been enough in themselves to put taxpayers on the hook.

After a marathon meeting between state officials, banks and the foundation in late 2018, the UW System agreed to use $6.3 million in tax money to pay back outstanding loans on the construction projects. UW-Oshkosh, for its part, agreed to use revenue from an existing biodigester to pay back part of that sum over 18 years.

– The Associated Press contributed to this story

About Nate Beck, nbeck@dailyreporter.com

Nate Beck is The Daily Reporter's construction staff writer. He can be reached at (414) 225-1814 (office) or 414-388-5635 (mobile).

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