In order, I'd probably place the fault at: Police, media, then university.
Police cutting him loose merely hours (minutes?) after his arrest is wild. Apparently "the guy" responsible for letting him walk is a huge Michigan football fan and it's all over his social media...
Couple that with the lack of details, and differing details, and the police look incredibly bad in this situation IMO.
Secondly, the lack of reporting from the media on this is pretty astonishing. The police should be getting lambasted for how they've handled this. And the media should be asking hard questions to Michigan about it as well. Instead, they asked one time, Manuel & Harbaugh made a statement and its largely been ignored ever since.