[MSN] Museum's ex-financial chief to stand trial. Former Milwaukee Public Museum official Terry Gaouette will stand trial on felony charges that he drained museum endowment funds for operations and then lied about it, a court commissioner ruled Friday.

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Museum's ex-financial chief to stand trial
Gaouette accused of improperly shifting endowment funds
By STEVE SCHULTZE
sschultze at journalsentinel.com
Posted: July 15, 2007

Former Milwaukee Public Museum official Terry Gaouette will stand trial 
on felony charges that he drained museum endowment funds for operations 
and then lied about it, a court commissioner ruled Friday.

Milwaukee County Court Commissioner Barry Slagle agreed with prosecutors 
that there was enough evidence for the case to proceed. Gaouette will be 
arraigned Aug. 8 before Milwaukee County Circuit Judge William Sosnay.

If convicted of all four felonies, Gaouette could face up to 28 years in 
prison.

The museum's former chief financial officer, Gaouette is accused of 
falsifying museum records and improperly shifting almost $4 million from 
the museum's endowment in 2004 and 2005 to hide the museum's deepening 
financial troubles. He's not accused of taking any museum money for himself.

Assistant District Attorney David Feiss argued that Gaouette's actions 
constituted "theft by officer" of a company. Gaouette's transfer of 
money from the museum's endowment fund to the museum shifted it from one 
legal entity to another, Feiss wrote in a legal brief.

Gaouette's lawyer wrote that statements by former museum board member 
Kenneth Kerznar should clear Gaouette. Kerznar testified in January that 
commingled museum operating and endowment funds all were for the 
museum's benefit.

Spending down the endowment to pay for museum operations was 
"unfortunate and financially ruinous in the long run," wrote Dean 
Strang, Gaouette's lawyer. "But it is not a crime."

Strang acknowledged that Gaouette violated museum rules by transferring 
endowment money for operations without approval. But Strang said that 
wasn't criminal, either.

Gaouette's falsely rosy reports about the museum's finances allowed him 
to hang on to his job, Feiss wrote. Gaouette's salary went from $97,500 
in 2002 to $148,000 by the time he quit in April 2005.

The museum's financial plight forced the layoffs of more than 40% of the 
museum staff and led to a bailout plan approved last month by the county 
that calls for $39 million in county payments over the next 15 years, as 
well as interest reductions in museum bank loans and an ambitious 
fund-raising campaign.

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