Nass warns against using state funds to ‘bail out’ UW-Oshkosh Foundation

Photo by Michelle Stocker, The Capital Times

Sen. Steve Nass clashed with the UW System Thursday on whether it’s trying to use public funds to “bail out” the UW-Oshkosh Foundation.

The UW System is currently suing a former UW-Oshkosh chancellor and former vice chancellor in a lawsuit that alleges the two approved “illegal transfers” of money for five real estate projects managed by the private UW-Oshkosh Foundation.

Nass, R-Whitewater, sent a note to UW System President Ray Cross saying he had heard “efforts are underway to reach a deal on the UW-Oshkosh scandal” that would potentially include state funds.

Michael Grebe, the chair of the Board of Regents Audit Committee, responded that any settlement discussions are preliminary “and no agreement has been reached.”

He said the state Department of Justice, which is representing UW in the case, has worked to determine if a settlement can be reached. He added that DOJ has said if banks can’t collect from the UW-Oshkosh Foundation, it’s “likely the banks will attempt to seek funds from the UW System.”

“DOJ and the UW System will continue to act responsibly to protect our taxpayers, students and families, and our campuses,” he said. “Namely, we are aiming to safeguard state assets, as well as Foundation funds which are used to provide scholarships for UW-Oshkosh students and support university programs.”

Nass said state officials cannot “rush a bailout that benefits the private foundation and the banks/investors involved at the expense of the taxpayers or students.”

“In other words, President Cross, you need 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,” he said.

Mike Mikalsen, a Nass spokesman, also said the UW’s “tune has changed.”

He pointed to a January release from the UW System saying UW-Oshkosh and the UW System “cannot be held responsible for the Foundation’s project expenses or debt service,” as the actions of the two former UW-Oshkosh officials were unconstitutional.

Now, Mikalsen said, they’re “trying to rush a deal” that could include state funds. He said Nass would approve of any settlement that uses private money but he is “adamantly opposed and will work very strenuously” to avoid having the state pitch into a settlement.

UW System spokeswoman Stephanie Marquis said the system still believes that legally, it can’t be held responsible for those projects and debts but any party could decide to sue the system if it wanted to challenge that.

She also emphasized there isn’t a settlement agreement and that any comments regarding one are “speculative.”

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