Tag Archives: University of Wisconsin Oshkosh

UW Won’t Cover UWO Foundation Debt

Good.

The University of Wisconsin System will not use taxpayer money to pay the debts of the troubled UW-Oshkosh Foundation, officials said Tuesday, and has backed out of talks with the nonprofit’s creditors about a potential settlement.

It would be “inappropriate” to use public funding to cover what the foundation still owes for a series of improper real estate projects orchestrated by two former top administrators at the Oshkosh campus, said Regent Michael Grebe.

UW officials acknowledged in May that they were in “preliminary discussions” on a settlement with banks that loaned the UW-Oshkosh Foundation money, prompting an outcry from lawmakers who said they opposed a taxpayer-funded “bailout” of the private nonprofit.

 But Grebe said Tuesday that the System is “no longer engaged in settlement discussions, and there is no indication as to if (or) when those talks would resume.”

Nass Pushes Back on Taxpayer Bailout for UWO Foundation

Nass is spot on.

Sen. Steve Nass (R-Whitewater) on Thursday released a letter he wrote to Cross that states he’s aware of efforts to reach a deal that potentially would use public funds “to assist in what would be a bailout” of debts of the UW-Oshkosh Foundation.

“I am aware that such a bailout might need action by the Legislature to include elements of a deal in the 2017-’19 biennial budget,” Nass wrote. He said he hoped no one involved planned to “rush a bailout that benefits the private foundation and the banks/investors involved at the expense of the taxpayers or students.”

He urged Cross “to keep your commitment that the public won’t be forced to fund the inappropriate decisions of two campus administrators and the failed oversight of the System.”

[…]

At issue is the fact UW-Oshkosh’s private fundraising foundation does not have enough cash to cover $14.5 million in debt for several real estate projects under investigation by the state Department of Justice.

The Department of Justice is negotiating the settlement on behalf of the UW System and Board of Regents.

The UW-Oshkosh projects were the subject of a suit the UW System filed in January against former Chancellor Richard Wells and his chief business officer, Thomas Sonnleitner, for allegedly funneling millions of dollars in university money into real estate projects through the private foundation to push that work despite a weak economy.

The UW System ideally wants the UW-Oshkosh Foundation to remain solvent so that its assets are not frozen or at risk. That includes scholarship support for students. The UW-Oshkosh Foundation in fiscal 2016 provided $1.3 million in scholarships.

Note that despite the name, the UW-Oshkosh Foundation is a private organization that raises money to support UWO. There’s no good reason for the taxpayers to be on the hook for their bankruptcy.

Former UWO Chancellor Responds to Allegations

And it’s laugh out loud funny.

In Wells’ response, his lawyers wrote that Wells was acting “within the scope of his employment” when carrying out the acts described by the UW lawsuit, and that collaboration and cooperation with the UW-Foundation was undertaken “with actual authority derived from the board,” along with the authority of state law, administrative code and practices and procedures of the UW System.

None of his actions, the document states, “constitute intention or negligent conversion,” but if they are ultimately found by a court to have happened as a result of Wells’ discretion as chancellor, Wells should not be held personally liable for them. His acts “were not malicious, willful or done with the intent” to violate any law or policy, the response states, but “were done for the benefit of UW-Oshkosh” and its students, “and in fact did provide significant benefits to UW-Oshkosh.”

Wells’ response also states that the UW System did not have in place a clear and concise set of rules, best practices and guidelines for universities and affiliated foundations that were applicable to UW-Oshkosh or known to Wells.

So how can he argue both that he followed the “practices and procedures of the UW System” AND “UW System did not have in place a clear and concise set of rules, best practices and guidelines?”

This looks like a “kitchen sink” response from someone who is caught dead to rights.

Shady Dealing at UWO

This stinks.

The University of Wisconsin-Oshkosh Foundation bought Chancellor Richard Wells’ home for roughly $120,000 more than it arguably was worth before he retired — the same foundation he’s accused of illegally using to help cement his legacy.

In addition to that windfall, Wells saved roughly $27,000 in Realtor commission because the sprawling, classic midcentury modern ranch house with brick privacy walls never went on the market.
The chancellor continued to live in the house about a half mile from campus rent-free per a standard contract until he moved to Florida 20 months after the sale. After he left, the foundation sank another $62,000 into the 3,247-square-foot home on top of the $450,000 sale price. They updated the kitchen, added a half-bath and coat room, resolved serious water drainage issues and made extensive repairs, including replacing two bulging concrete patios, according to UW-Oshkosh records obtained by the Milwaukee Journal Sentinel through an open records request.

UWO In Deep Poo

smh

UW-Oshkosh’s foundation has spent heavily in recent years on technology that converts manure and other organic material into electricity — a strategy that is both legal and mirrors a trend among colleges of using private foundations to generate revenue.

But the university is running into problems for funneling public money through its foundation for projects, which UW System officials say is illegal.

The funding included the development of a waste-to-energy system at Wisconsin’s largest dairy farm, where costs escalated, prompting administrators to divert school funds to help pay for the project, according to court records.

UW System officials filed the suit Jan. 18 against former Chancellor Richard H. Wells and Thomas G. Sonnleitner, the former vice chancellor for administrative services, for tapping school funds that should have come from the foundation.

This is a big poo storm that involves the illegal use of taxpayer funds and such, but it also reveals some more fundamental problems with the decision making within the UW System. The University and the Foundation are allegedly committed to providing an excellent education for students. The Foundation’s webpage even says:

The University of Wisconsin Oshkosh Foundation contributes to academic excellence. It is an organization committed to advancing higher education and ensuring that UW Oshkosh students enjoy successful futures.

So during the years in which the Foundation and the University were planning and spending millions of dollars on a biodigester did anyone posit the question, “how does this contribute to academic excellence for our students?” If so, what was the answer? If not, why not? Why are they doing it?

Stories like this reaffirm the opinion that there isn’t too little money in our UW System – there is too much. There is so much money lying around that officials are literally throwing taxpayer, tuition, and donated money at shitty projects because they can’t think of a better use for it. When resources are truly scarce, things like this don’t happen.

UWO Foundation Paid off Former UWO Chancellor

Wow.

OSHKOSH – While the University of Wisconsin-Oshkosh foundation grapples with whether to declare bankruptcy to cover $14.5 million in debt, the fate of the chancellor’s foundation-owned residence remains unclear.

The foundation bought the home at 1423 Congress Ave. in January 2013 from then-Chancellor Richard Wells and his wife, Christie, according to Winnebago County property records. The foundation bought the home for $450,000 — nearly $120,000 more than fair market value — about 1 ½ years before Wells retired in August 2014 and moved to Florida.

Let’s understand what happened here… according to accusation in the lawsuit, then-Chancellor Richard Wells illegally used public funds to guarantee and fund private, for-profit building projects to the tune of millions of dollars. Now we find out that the same foundation bought Wells’ house for over $100k more than fair market value in the same time period that Wells was allegedly illegally funneling them public funds. Sure looks like part of a payoff…

Former UWO Chancellor Claims Widespread Knowledge of Illegality

Well, well… the plot thickens.

A former UW-Oshkosh administrator says the financial decisions that the University of Wisconsin System is now suing him for making were widely known and once encouraged by UW’s leaders.

That’s the opposite of what UW officials have claimed since they filed a lawsuit earlier this month against UW-Oshkosh’s former chancellor and Thomas Sonnleitner, its chief business officer from 2000 until last year, for using the university’s money and credit to help fund several UW-Oshkosh Foundation building projects.

System leaders said Sonnleitner and the former chancellor, Richard Wells, illegally arranged for the university to provide millions of dollars in funding and write guarantees backing the foundation’s loans for the projects. They described the actions of Wells and Sonnleitner as “isolated behavior” that was done without the knowledge of UW leaders, who said they quickly investigated the financing when they learned about it in 2016.

Hearkening back to my column that was published this morning, neither contradictory claim covers UWO administrators with glory. If the current Chancellor is right and the former Chancellor allegedly committed these illegal transactions on the sly, then it reveals woefully incompetent and/or corrupt oversight at the university. If the former Chancellor’s claims are accurate that he acted with the widespread knowledge and consent of the leadership at the university, then it reveals a poisonous culture that carelessly accepts the illegal and wasteful spending of public funds.

Either way, there’s a problem.

Former UWO Coach Says There’s More to be Found

This could be the grumbling of a disgruntled former employee, but the allegations paint a picture of rampant illegal mismanagement of funds.

OSHKOSH, Wis. (WBAY) – A former UW-Oshkosh baseball coach says he wasn’t surprised to hear about a lawsuit filed against two former UW-Oshkosh leaders accused of mishandling funds.

Tom Lechnir says he was let go in May of 2013 after 25 seasons with the school when he raised concerns about the university’s accounting practices.

[…]

He also secured donors who provided financing for Alumni Stadium, which opened in 2007, but he voiced concerns when he says the university diverted some of the funds to support other building projects, like the Oshkosh Sports Complex.

Lechnir said, “When I could not or would not ask them to donate more to give to other places, then obviously they threatened me with my job — and to my surprise he somehow followed through with it and got away with it.”

That sports complex was specifically named in court documents filed this week as one of five projects on which the university spent more than $11 million — funneling those funds through the UW-Oshkosh Foundation.

State law prohibits the use of public funds to support a private organization like the foundation.

“What I’m going to tell you guys is, don’t stop digging, because there’s a whole lot more than what’s out there,” said Lechnir.

Former UWO Chancellor Accused of Illegal Use of Tax Money

Amazing how this can go on for so long and with so much money.

OSHKOSH – Former University of Wisconsin-Oshkosh Chancellor Richard Wells is accused of overseeing the illegal transfer of more than $11 million in university funds to support five Oshkosh-area building projects.

A lawsuit filed Wednesday in Dane County by the UW System claims Wells and Tom Sonnleitner, retired UWO vice chancellor of administrative services, made illegal financial guarantees between 2010 and 2014 to secure backing for high-profile building projects on and around the Oshkosh campus and later used university funds to support foundation projects, which is prohibited by state law.

[…]

Wells and Sonnleitner are accused of authorizing multiple transfers to the projects between 2010 and 2016. They included $1.46 million for the Alumni Welcome and Conference Center; $2.17 million for Best Western Premier Waterfront Hotel and Conference Center in downtown Oshkosh; $4.14 million for a biodigester in Rosendale that converts waste to energy; $2.33 million for a second biodigester on Witzel Avenue; and $806,000 for the Oshkosh Sports Complex, which includes Titan Stadium, according to the civil complaint.

Sonnleitner also authorized transfers to the foundation that were not tied to a specific projects, one of which occurred a week after he was suspended by the university. Those transfers totaled an additional $344,000, according to the complaint.

In October 2014, Sonnleitner also entered the university into a lease agreement with the foundation that obligated the university to pay $700,000 a year to use the biodigester. The university payments required by the lease were unconstitutional, the lawsuit claims.

That $11 million could have funded a lot of education for students. Also, remember that these same folks were crying poor to the legislature and the public as they were illegally funneling money to private projects.

I would suggest that law enforcement look into who was actually receiving all of this money and who the owners and investors of those companies are. Someone was benefiting from this.