Photo by Miles Maguire
Lawyers Steve Biskupic and Raymond Dall'Osto lead clients Richard Wells and Tom Sonnleitner out of court.
By Miles Maguire
Two former UW Oshkosh officials pleaded not guilty Monday to accusations of misconduct in office and asked that the charges against them be dismissed.
The officials, former Chancellor Richard Wells and former Vice Chancellor Thomas Sonnleitner, have been accused of abusing their authority by entering into loan guarantees on behalf of the UW Oshkosh Foundation.
In a court filing a lawyer for Wells said that the charges did not include "sufficient facts to establish probable cause" and were unconstitutionally vague.
Wells and Sonnleitner were released on $10,000 signature bonds.
The two were originally slapped with civil suits in January 2017. That case was stayed earlier this year, however, as various parties, including the state of Wisconsin, acknowledged that the legal issues are far from clear.
The state is arguing that Wells and Sonnleitner "knowingly made financial guarantees which were in excess of their authority and contrary to the Wisconsin Constitution and state law." But the only judge who has reviewed the legal questions to date has said the state has misinterpreted the relevant legal provisions. That ruling came in bankruptcy proceedings in which the foundation is suing the university.
The case against the two former UWO officials does not charge them with gaining any financial benefits for themselves. "They are not accused of taking any funds, pocketing any funds for personal use or whatever," said Raymond Dall'Osto, an attorney for Wells. "All of this was for the purposes of the university."
Dall'Osto said he is "still questioning why" criminal charges were brought.
Wells and Sonnleitner are not due back in court until Dec. 10. Until then their lawyers plan to seek out and review internal documents from the University of Wisconsin System. "The real meat is in the discovery," Dall'Osto said. "We've been told there are six-figure numbers of documents and maybe more."
One of the ongoing mysteries about the case is the role of former UW System Vice President for Finance Deborah Durcan. She refused to be interviewed by retired Judge Patrick Fiedler, who was commissioned to investigate the foundation’s real estate deals. Fiedler found that the foundation’s board relied on Durcan’s “silent acquiescence” during discussions about the projects to conclude that the loan guaranties were acceptable.
Durcan was an ex officio member of the board of the UW Oshkosh Foundation.
A federal bankruptcy judge "found that the vice president of finance for the [University of Wisconsin System] was present and aware when the defendants in the instant case are alleged to have made promises and [memoranda of understanding] to the foundation, and she did not object to same," lawyers for Wells and Sonnleitner said in their motion to dismiss the case.
"Given this factual context, how were the defendants provided adequate notice under state criminal statutes, so as to have a reasonable opportunity to know what is prohibited so that they could act accordingly, to avoid a violation of the criminal law," the motion says.
The criminal charges against Wells and Sonnleitner have been "personally crushing after a life experience of devotion to the university and particularly to the Oshkosh campus," Dall'Osto said. "This has been very painful for them. It has hurt their reputations. But there are a lot of supporters out there who have advised and commented to me and others."
The case against the two officials involves five real estate projects that were undertaken by the university's foundation. If they are found guilty they could be sentenced to up to 17 and a half years in jail and assessed fines of $50,000 apiece.
But one of those real estate projects, the Premier Waterfront Hotel in Oshkosh, has been a financial success and is earning money for the foundation. Another one of those projects, the Oshkosh Sports Complex, has recently been paid off. A sale is currently being negotiated for a third project, a biodigester at the Rosendale Dairy.
The other two projects, the Alumni Welcome and Conference Center and a biodigester on Witzel Avenue, are currently being used by the university. The Witzel biodigester is expected to be a financial drag on the university, but the university has been earning money on the welcome center by renting it to outside groups.