UW-Oshkosh Criminal Charges a Mistake

The criminal charges filed by the Wisconsin attorney general’s office against the former chancellor and vice chancellor of UW–Oshkosh have the smell of prosecutorial overreach, scapegoating and missing of the mark.

UWO’s two top officers, Rick Wells and Tom Sonnleitner, have been charged with the fuzzy crime of “acting beyond their authority” as parties to a crime. Beyond their authority? They were the top executives of the university. That charge is going to be very hard to prove in court.

At the heart of their alleged “crimes” are financial interactions and obligations between the UWO Foundation and the university. But, let us take note at the outset that the foundations were set up to provide support for their campuses and students. So, why would it be a crime for a university administration to provide help for foundation projects and initiatives?

(Disclosure: I am a director of both the UW-Milwaukee Foundation and its subsidiary UW-Milwaukee Research Foundation.)

There are matters of judgment involved in executive actions and decisions, and executives don’t always get things right. They make some bad calls, but usually make more good calls than bad calls.

Executives are generally given wide latitude on decisions; else they would become too careful when bold decisions are called for. Poor decisions are fair game for criticism, even removal from office. Fair enough, that’s part of taking the job. But jail time?

There are several extenuating factors to take into account as three different lawsuits proceed with millions in legal fees attached:

• If UW System had a consolidated set of audited financial statements, the issues surrounding UWO and its associated foundation would have come to light early on and corrective action, if needed, would have ensued. Thanks to Rep. Dale Kooyenga, a CPA, Act 59 will require just such an independent audit starting next year. The new auditors will be looking at all the “off balance sheet” assets and connections.
• Wells was open about his projects at UWO and economic development in the Fox Valley region. He talked often and publicly about the initiatives that are now under fire. He was especially proud of the R&D associated with then two manure digesters and what they might do to help with major water pollution issues in the state. Cheap-shot jokes about manure aside, surely the UW System administration knew about what he was doing.
• All five of the projects were intended to help USO and the community. There has been no claim that the two officers got anything personally from the five deals.
• Wells was considered an exemplary, innovative chancellor prior to his successor raising the foundation issues. Wells loved and worked hard for UW-Oshkosh and was a regional leader in economic development. (I recommended him for president of the whole system.)

In the aftermath of the UWO controversy, UW System leaders conducted a 2017 audit of unaffiliated organizations and found that there were 90 of them, of which 37 were attached to UW-Madison. There are 13 more entities attached to UW Health that were not addressed.

In the end, there were some minor issues, but no major issues made headlines at the 25 other UW campuses. We made a few adjustments in governance at UWM.

This does not constitute an epidemic of abuse, but there is a major lack of transparency. Still to be disclosed are the extra out-of-pocket UW System costs for lawyers, accountants, bankers and investment bankers for now over 100 separate but affiliated entities.

This should not be a partisan set of issues. Not everything has to be a partisan issue, as is the pathology these days.

What’s needed here is clear direction to the UW campuses and their wonderful foundations about the protocols, rules and reporting of fund-flows back and forth. A tightening was in order, as the USO situation has taught us.

Not so incidentally, the lion’s share of the funds flow from the foundations to the colleges and their students, not the other way around. That’s the big picture that the attorney general missed.

Sadly, the prosecutorial fervor may have a chilling effect on donors and on competent people willing to serve on foundation boards.

The even bigger picture that UW Regents need to address is the overall organizational structure and governance of the system. The Madison-centric management of the sprawling system has proved unwieldy.

A reorganization along regional lines would better serve the state in terms of economic development and connection to the issues. It would allow more hands-on management by regional chancellors and regional boards of regents.

That’s a long shot. There has been no major reorganization for more than four decades. But, at least, there will be more transparency going forward.

John Torinus is the chairman of Serigraph Inc. and a former Milwaukee Sentinel business editor who blogs regularly at johntorinus.com.