The university, however, says it has always acted in the public interest and when advised of new funding rules six years ago adapted accordingly.
The Wildrose party, in a news release, said freedom of information searches reveal the university has donated more than $15,000 to the Tories dating back almost eight years.
The lion's share of the funding has gone to fundraising dinners for former premiers Ralph Klein and Ed Stelmach.
None involve current Premier Alison Redford.
Wildrose deputy leader Paul Hinman said while the figures point blame at the university, they're not the ones who belong under the microscope.
He said public officials and municipal leaders have told him over the years there is a culture of intimidation and an expectation from government politicians that anyone who receives funding should tithe back through party donations.
"This is such entrenched behaviour with the PC party they don't even know that they're doing something wrong," said Hinman.
"It's just business as usual, and they really do believe that if the law does exist that they're above it.
"It's like going to a banana republic."
About $10,000 of that money was spent before the university became aware in the fall of 2005 of new, stricter restrictions on campaign funding laws, said Bob Turner, the university's chair of the board of governors.
Turner said once university officials became aware of the new rules, they immediately changed their own policy to comply.
Since then, he said, any money that individuals give to political parties has not been reimbursed.
"As soon as we became aware (of the legislative changes) we made the appropriate policy change," said Turner in an interview.
"There's not a whole lot we can do about (the donations) before the policy (change)."
The issue comes amid a backdrop of broader allegations of impropriety.
Chief electoral officer Brian Fjeldheim is currently investigating allegations that municipalities illegally donated to Tory riding associations in 10 of Alberta's 83 ridings.
Fjeldheim cannot by law name the riding associations unless charges are laid.
PC party president Bill Smith sent an open letter to all ridings last week pledging to co-operate with the investigation and asking the other associations to check their books to ensure there are no conflicts with elections rules.
Smith has said any irregularities could be chalked up to isolated mistakes and human error.
Party officials did not respond to requests for an interview Tuesday on the University of Lethbridge issue.
Fjeldheim's probe comes on the heels of a CBC-TV report last fall detailing numerous cases in which municipalities either illegally donated to the PC party or a PC riding association mistakenly asked for the money.
Under the Election Finances Act, it is illegal for a political party to solicit or accept money from any group that receives public funding. Those groups include municipalities, Crown corporations, post-secondary institutions, and Métis settlements.
The opposition Liberals say they have documented 25 cases in which municipalities supported the Tories.