What funds will the University use to pay the fine included in the NCAA's Consent Decree
We expect to pay the fine, which is five annual installments of $12 million that will support initiatives for the prevention and treatment of child abuse, out of football reserves, the deferring of capital and maintenance expenditures, and an internal loan to the Athletic Department. We will not use state or philanthropic money to pay the fine.
At this time we fully expect that these funds will satisfy the $60 million and it is impossible to speculate beyond the life of the Consent Decree. Great care will be given to developing a budget that will protect all of our students, and the fine is expected to have no impact on the scope and quality of the University’s academic enterprise or on tuition costs to students. Penn State remains committed to keeping its opportunities affordable, as evidenced by the recent Board of Trustees approval of tuition increases far below the national average at public universities.
What initiatives has the University undertaken in the aftermath of the Sandusky matter on the issue of child abuse?
President Erickson and the rest of Penn State's leadership team, along with the entire Board of Trustees, are very concerned about victims of child abuse. To demonstrate the University's commitment to being a positive force for awareness and change, the University has undertaken the following initiatives:
- Penn State has donated $1.5 million of its share of Big Ten bowl game revenues to the Pennsylvania Coalition Against Rape and the National Sexual Violence Resource Center to assist in the efforts to raise awareness about child sexual abuse and develop outreach educational programming across the Commonwealth and beyond.
- The University launched a Center for the Protection of Children at the Penn State Hershey Children’s Hospital that will be devoted to the prevention and treatment of child abuse. The Center, which will also be supported initially by bowl revenues, is the first piece of a University-wide institute that will bring together many existing and expanding resources at Penn State related to the prevention and treatment of child abuse.
- In October 2012, the University hosted the Child Sexual Abuse Conference, which convened some of the nation’s top experts in child sexual abuse and child trauma research, prevention, and treatment for a public forum. The two-day conference was designed to help educate the public in Pennsylvania and across the nation about this critical issue, and addressed a variety of topics, including the traumatic impact of child sexual abuse, evidence-based methods of treatment and prevention, characteristics of pedophiles including their use of the internet as a gateway for child sexual abuse, and the legal issues involved in a child abuse investigation The event included remarks by Sugar Ray Leonard and Elizabeth Smart, both of whom suffered sexual abuse as children.
- In January 2013, Penn State announced it will be hiring a dozen new faculty members over three years as part of its Network for Child Protection and Well-Being. The goal of this initiative is to advance knowledge, practice, education and outreach to combat child abuse.
- In December 2011, the University opened a Sexual Assault and Relationship Violence Hotline at 800-550-7575 (TTY 866-714-7177) that can be accessed 24 hours a day, seven days a week, for all Penn State Campuses.
- Many other initiatives are under way, including enhanced staff training on the detection of potential child abusers. At President Erickson's direction, the criteria for reporting questionable conduct appearing to involve child abuse for all University officials must be beyond the legal requirements and must be driven by moral standards of what is right and what is wrong.
- Also, at President Erickson's direction, all deans and chancellors, vice presidents, vice provosts, and other senior officials and faculty of the University have received instructions on the reporting of actual or suspected instances of sexual abuse and harassment. The President has reminded all that there is a single reporting standard applicable to everyone in the Penn State community, without exception.
- We're also moving forward on the implementation of Judge Freeh's recommendations.
What is the status of civil cases filed against the University?
As of February 2013, six cases have been filed. The University is taking these cases very seriously but cannot otherwise comment on pending litigation. President Erickson and the Board of Trustees have publicly emphasized that their goal is to resolve these cases in a way that is fair, private and expeditious.
What investigations are currently under way at Penn State and how do we know they are sufficiently independent?
The University has been and is cooperating fully with all appropriate government authorities and all criminal and administrative investigations, including those described below. Out of respect for the legal process and the privacy of the individuals involved it would not be appropriate to comment on specific charges, evidence or individuals until the legal process and such investigations are completed.
- Attorney General: The Grand Jury investigation is ongoing, which means further questioning and charges may yet occur
- U.S. Department of Education: This review under the Clery Act has been underway since late November 2011 to examine University processes and policies regarding the reporting of and response to crimes committed on campus.
- United States Attorney, Middle District of Pennsylvania: This investigation is ongoing and the University is cooperating fully. For the University's statements on this investigation, visit http://live.psu.edu/story/58025.
Was Judge Freeh, hired by the Board of Trustees, truly independent?
The Special Investigations Task Force, chaired by a member of the Board of Trustees, was responsible for hiring Judge Freeh and served as the liaison between Judge Freeh’s team and the Board to ensure Freeh’s team had the resources and access to the University’s people and information to fulfill their mandate. No one from the University or the Board, including the members of the Special Investigations Task Force, saw the report in either draft or final form prior to its public release. Judge Freeh and his team had access to all members of the Board of Trustees and the University.
How much money is the University paying for legal fees, consultants and PR firms associated with the Sandusky matter?
Some of the fees and costs set forth below are expected to be reimbursed under the University's insurance policies.
- NCAA Fine: $12,000,000
- Freeh Sporkin & Sullivan/Pepper Hamilton LLP: $8,159,083
Independent Monitor: $1,421,320
- DLA Piper, LLP
Board of Trustees - Legal Services, Consulting Services and Communications: $6,000,482
- Reed Smith LLP
- Daniel J. Edelman, Inc.
- Kekst and Company Inc.
- Domus Inc
- The Academy Group
- Guidepost Solutions
University Legal Services/Defense: $9,243,590
- Saul Ewing
- Duane Morris
- Lanny J. Davis and Associates
- Jenner & Block, LLP
- ML Strategies
- Lee, Green & Reiter Inc.
- McQuaide Blasko
- Document Technologies, Inc.
- White and Williams, LLP
- Feinberg Rozen, LLP
- Hamburg & Golden, PC
Externally Initiated Investigations: $593,038
- Margolis & Healy
- Lightfoot, Franklin, White LCC
- Buchanan Ingersoll
- Saul Ewing
Indemnified Persons' Legal Defense: $5,151,634
- Farrell & Reisinger
- Caroline M. Roberto
- Vaira & Riley
- Schnader, Harrison, Segal & Lewis, LLP
- Gover, Perry & Shore
- Gentile Meinert Assoc.
- Fox Rothschild LLP
- Hamburg & Golden, PC
- Cohen & Grigsby
- General Indemnified Persons' Defense
- Various Vendors
- Other Institutional Expenses: $1,883,096
Total as of February 28, 2013: $44,452,243
Please note: It routinely takes 40-45 days until The University receives all invoices for a particular month. Updates to this list will be made as soon as possible.
From where are the funds coming to pay for legal defense for the University and other public relations and costs associated with the Sandusky controversy?
The costs surrounding legal defense and public relations efforts for the University associated with the Sandusky matter are not funded by student tuition, taxpayer funds or donations. The University maintains General Liability and Directors & Officers insurance policies which are expected to cover the defense of claims brought against the University and its officers, employees and trustees. Legal and other expenses not covered by insurance are expected to be funded from interest revenues related to loans made by the University to its self-supporting units. As a common business practice, the central University -- which has the ability to finance bonds backed by its credit rating -- is able to loan its self-supporting units money for special projects. These units do not have their own borrowing authority, but they are all part of the University's credit profile. As an example, in the case of the most recent $100 million Beaver Stadium expansion, the University bore the risk to finance a bond at a variable rate during a favorable financial period. The University then loaned funds at a fixed interest rate to Intercollegiate Athletics, which then repaid the loan with interest from its ticket sales, club seats leases, sponsorships and other income generated. The interest from this loan is then placed into a fund that can be used for more projects in the future or in emergency situations. Therefore, uninsured expenses can be covered by this interest and will not be funded by student tuition, taxpayer funds or donations. Compensation paid to all such attorneys, consultants and firms will be regularly updated and all expenses are audited.
Does Penn State have any plans to honor/recognize Coach Paterno's contributions to Penn State?
This is a sensitive topic and one which has been discussed for some time. Joe Paterno did a lot of tremendous things for the University and we need to take appropriate time, reflection and distance to consider his life as a whole before deciding if and how best to honor his contributions to Penn State.
How are settlements with the victims progressing?
The settlement process initiated by the University with the assistance of Kenneth R. Feinberg and Michael K. Rozen is ongoing. The University remains committed to completing this process in a fair, responsible and timely manner. Read more here: http://news.psu.edu/story/146443/2012/09/20/firm-assist-possible-settlements-related-sandusky-matter.