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State joins case against former UWO officials

File photo (WLUK/Jerry Van Handel)

MADISON (WLUK) - The state of Wisconsin's request to become a party in a lawsuit by the UW-System Board of Regents against two former UW-Oshkosh officials was granted Wednesday by a Dane County judge.

The UW System filed a civil lawsuit against former UW-Oshkosh Chancellor Richard Wells and former Vice-Chancellor of Administrative Services and Chief Business Officer Thomas Sonnleitner for allegedly improperly managing university funds for five projects.

According to the DOJ complaint, Wells and Sonnleitner made illegal financial transfers from UWO to the UWO Foundation related to these five real estate projects. Wells was Sonnleitner’s supervisor, and neither properly recorded those transfers in the UWO’s accounting records. The UWO Foundation was established to provide support to the university, and funding should have only flowed from the foundation to UWO.

The five projects are: Best Western Premier Waterfront Hotel and Conference Center, Oshkosh Sports Complex, Witzel Dry Fermentation Anaerobic Biodigester, Rosendale Dairy Biodigester, and the Alumni Welcome and Conference Center.

In their responses, both Wells and Sonnleitner deny any wrongdoing.

It is the response by Sonnleitner which prompted the state to ask to intervene in the case and become a party in it. Sonnleitner argues he is entitled to indemnification, saying his actions were done in the course of his job duties at UWO.

The Department of Justice says indemnification could expose the state to financial risks, so it wants to protect itself by having participation in the case - and will oppose any such efforts. The judge agreed Wednesday, allowing the state to be added to the case.

Meanwhile, both Wells and Sonnleitner have asked for the case to be dismissed. The judge is expected to issue a written ruling on those in the next two months.

A status conference is scheduled for May 30. No trial date has been set.

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