February 26, 2013

by Sara Hoffman

Penn State was at the forefront of sports news throughout 2011 and 2012 as the scandal surrounding former defensive coordinator Jerry Sandusky’s child sex-abuse unfolded amidst national media attention.  The media attention continues in 2013 as the fallout from Sandusky’s molestation acts and the failure of university officials to report and prevent further abuse persists in the form of a new report rejecting the Freeh Report, lawsuits, and civil settlements.

The Paterno Family’s Commissioned Review of the Freeh Report

On February 10^th, Joe Paterno’s family released its long-awaited expert report which the family vowed to commission following the release of the Freeh report in July 2012.  The expert team commissioned by the Paternos to review Louis Freeh’s independent report included former U.S. Attorney General Dick Thornburgh, attorney Wick Sollers, former FBI profiler Jim Clemente, and John Hopkins sexual disorders expert Dr. Fred S. Berlin.  The Paterno report criticizes the Freeh report’s findings based on utilization of incomplete evidence such as partially expired email chains and for failing to interview key witness, stating that the Freeh report was “factually wrong, speculative and fundamentally flawed.”  The review rejects the Freeh report’s finding that Paterno and other university officials conspired to cover up Sandusky’s acts in order to preserve the reputation of the university and its football program.  According to Wick Sollers, Managing Partner of the D.C. Office of King & Spalding, “The Freeh Report isn’t a little wrong on the minor issues; it is totally wrong on the most critical issues.”

Since the release of the Freeh Report in July 2012, numerous authorities have voiced criticism in addition to the Paterno family.  A letter appealing the consent decree was sent to the NCAA Infractions Committee in August 2012 on behalf of Ryan McCombie and three other Penn State trustees who also claimed that the Freeh report “contains findings and conclusions that are contrary to the evidence presented and/or unsupported by credible evidence.”  According to the trustees’ letter, the Freeh report “failed to consider evidence or afford certain individuals an opportunity to be heard, failed to acknowledge the absence of important and material evidence in reaching its findings, and reached conclusions based on assumptions, conjecture and misplaced characterizations that are contrary to the available facts and evidence.”  ESPN reported that trustees and another close source said that the appeal letter was “a precursor to a federal lawsuit asking a judge to invalidate the sanctions, because trustees expect the NCAA to reject the appeal.”

Paterno’s family also sent a letter of appeal requesting an open hearing before the Infractions Committee, asserting that the NCAA was wrong to rely on the Freeh report and take unprecedented measures without following infractions procedures.  As expected, however, NCAA spokesman Bob Williams emphasized that Penn State agreed to the consent decree and the decision was not subject to appeal and refused to consider the Paterno family’s appeal.  Phil Knight, a Nike co-founder, also released a statement criticizing the Freeh report’s conclusions related to Paterno. In addition, former running back Franco Harris has openly rejected the Freeh report’s conclusions regarding alleged conspiracy and Paterno’s involvement.   Following the release of the Paterno report, Penn State trustee Alvin Clemens and several other trustees said that the Board should re-examine the Freeh report’s findings.   Trustee Anthony Lubrano went so far as to state that he believes the University is entitled to a refund for at least part of the $6.5 million paid for the Freeh report.  While these statements and scrutiny of the Freeh report highlight the fact that there are more sides to the story than the Freeh report uncovered, it seems unlikely that the statements or the Paterno report will have a material impact on NCAA sanctions or ongoing legal disputes.  The goal of the Paterno report was to critique the Freeh report’s investigative process and findings rather than to undertake an investigation of its own.  While it will not affect Penn State’s consent decree with the NCAA, it does bring out reasons to doubt Paterno’s involvement in a cover-up (which the Freeh report supported), although it is doubtful that this step or any other can remedy his fall from grace.

Photo by Gene J. Puskar, Associated Press

Remember, there were no criminal charges brought against Paterno. Former Pennsylvania Attorney General Linda Kelly stated that her office would not charge Paterno for any failure to report a 2002 on-campus sexual assault of a child involving Sandusky to law enforcement authorities. Grand jury testimony revealed that Paterno reported the incident to former athletic director Tim Curley after former graduate assistant Michael McQueary conveyed what he saw in a university locker room, thus satisfying his legal obligation under Pennsylvania’s Child Protective Services Law.  Curley, former University President Graham Spanier, and former University Vice President Gary Schultz face numerous criminal charges including failing to report child abuse, criminal conspiracy, endangering the welfare of children, obstruction, and perjury.  The three are awaiting trial.

Ongoing Legal Matters and Other Issues at Penn State

Penn State is currently serving out punishments specified in the NCAA’s consent decree accepted by University President Erickson to avoid the daunting alternative of a four-year death penalty.  In the consent decree, the NCAA states: “In particular, the egregiousness of the predicate conduct is unprecedented, amounting to a failure of institutional and individual integrity far exceeding a lack of institutional control or individual unethical conduct.”  The unprecedented NCAA-imposed penalties include a four-year ban from post-season football play, vacating of past football wins from 1998-2011, a reduction in scholarships, five years of probation, and a $60 million fine to be paid out over five years.  According to the consent decree, the fine is an “approximate average of one year’s gross revenue from the Penn State football program,” and the money will be designated for an endowment for organizations and programs that fight child abuse and help victims.

According to the Penn State’s Progress website, the University spent over $27.6 million for costs related to the Sandusky scandal as of November 2012.  This number is not inclusive of the first $12 million payment toward the $60 million NCAA fine.  The largest component of the $27.6 million is $13 million spent on Board of Trustees internal investigation and communications, including the Freeh report.  University legal services/defense fees totaled over $7.4 million as of November 30^th.  Other expenses include approximately $1.3 million for externally initiated investigations, $3.95 million for legal defense of indemnified persons, and $1.8 million for other institutional expenses.  The website maintains that Penn State expects to finance these expenses through the University’s insurance policies and interest revenues from loans to its “self-supporting units” such as athletics.

Penn State University is currently in the midst of ongoing civil settlement negotiations with victims’ attorneys.  In October, the Board of Trustees unanimously approved a resolution granting authority for approval of possible legal settlements to an authorized committee.  Feinberg Rosen is also assisting with the discussions between involved parties, and Penn State is expected to begin extending settlement proposals this week.  Kenneth Feinberg emphasized the dialogue with victims’ attorneys is expected to extend over several weeks.  A reported twenty-eight claimants presented settlement demands to Feinberg, which were given to Penn State officials earlier this month, and Feinberg stated that not all claimants made demands.

The University is also fighting a lawsuit filed in October 2012 by former graduate assistant Michael McQueary.  McQueary’s complaint alleged whistleblower, defamation, and misrepresentation counts, seeking $4 million in damages.  Penn State is seeking dismissal of the case, which is ongoing.

Further, the NCAA consent decree stipulated that Penn State must implement various governance recommendations advanced by the Freeh report.  A majority of the 119 recommendations have been implemented according to the Penn State website, which includes a Progress page to track the progress of Freeh report recommendations and other matters pertaining to the University’s response.

A New PA Law, Lawsuits with the NCAA, and PA Attorney General Investigations

On February 20, 2013, Pennsylvania Governor Tom Corbett approved a new state law that would require the $60 million in fines to be paid by Penn State to be used solely for organizations within the state, rather than settling for only 25% use within the state.  The NCAA immediately filed a lawsuit in federal court on February 20^th to block the Pennsylvania law, alleging that the law is unconstitutional due to unlawful government interference and a lack of state jurisdiction under the interstate commerce clause.  In addition to interfering with a valid contract between the NCAA and Penn State, the NCAA’s constitutional argument alleges that the PA law is an attempt to dictate where private parties spend money and divert funds from intended child abuse victims throughout the country.

The lawsuit over PA’s law is not the only legal drama between Pennsylvania and the NCAA.  On January 2^nd, 2013, PA governor Tom Corbett called NCAA’s sanctions “overreaching and unlawful,” vowing to file a federal antitrust lawsuit against the NCAA asking the court to throw out the sanctions.  Corbett filed suit on behalf of the state, seeking to have all of the NCAA sanctions voided, alleging economic detriment and NCAA involvement in a criminal matter that did not violate its rules.  Although it seems to be a good political move, many legal experts have expressed doubt regarding possible success of Corbett’s lawsuit due to a possible lack of standing and some questionable legal arguments.[i]

PA Attorney General Kathleen Kane is continuing a probe into how the Sandusky case was handled by Governor Corbett and other officials involved in the overdue charging of Sandusky.  In early February, Kane appointed H. Geoffrey Moulton, Jr. to lead the investigation. Moulton is a former federal prosecutor, Supreme Court law clerk, and U.S. Treasury Department Project Director, and he is currently an Associate Professor at Widener University School of Law.  Moulton will be reporting on the ongoing internal investigation directly to Kane.

Sandusky Appeal

Jerry Sandusky is currently serving time in a maximum-security prison, and his lawyers filed a notice of appeal with the Superior Court of Pennsylvania on February 21, 2013.  In October 2012, Sandusky was sentenced to thirty to sixty years in prison following his June conviction on forty-five counts of child sex abuse related to ten victims.  According to Bloomberg.com, Sandusky previously requested the trial judge to vacate his conviction or alter his sentence based on insufficient time to prepare his defense; his request for a new trial was rejected on January 30^th, 2013.  It is expected that the defense’s appeal will be rooted in the same arguments it advanced last month.

Truth

On February 8^th, just prior to the release of the Paterno family’s report, Joe Paterno’s widow, Sue, sent a letter to all Penn State football lettermen in which she explained her reasons for commissioning the review.  Criticizing the Freeh report process and the Penn State board’s response, Sue wrote: “To claim that this ill-considered and rash process served the victims and the university is a grave error.  Only the truth serves the victims.  Only the truth can help prevent this sort of crime from occurring again.”  It remains to be seen whether any expert report can uncover the true details of Sandusky’s criminal activity scheme.  For now, we’ll have to settle for seeking truth and justice through ongoing criminal trials.