Second Mile Financials Don't Add Up, Part 3

The Salary Hikes of Jack Raykovitz and Katherine (Kitty) Genovese Far Outpaced Those of the Staff After 2001 -- Did They See The Writing On The Wall?

In the first two installments of this series, we covered the inconsistent reporting of revenues in the form of donations to The Second Mile (TSM) and the possible overstatement of expenses in the Foster Care and Friend/Friend Fitness Programs.  We also examined the total compensation expenses that comprised nearly 60% of TSM's total expenses.  

This installment examines the salary histories of Dr. Jack Raykovitz, his wife, Katherine Genovese, and the staff averages from 1998 to 2009. The chart below gives a snapshot of the histories.

Analysis - Raykovitz and Genovese

From 1998 to 2001, the increases in salaries among Dr. Raykovitz, Ms. Genovese, and the staff were all rising at similar rates between 7 and 10% each year.  After 2001, the staff rate dropped precipitously, while the Raykovitz's salaries continued to on an upward trajectory. 

From 2001 to 2008, Dr. Raykovitz's salary increased by 33% -- rising from $99,699 in $138,279 (or a total increase of $38,630).  Over that same timeframe, Katherine Genovese's salary rose 48% -- from $68,058 in 2001 to $106,013 in 2008 (or a total increase of $37,965). 

The average American worker saw his/her salary increase 23% over the same timeframe (or about 3% per year).

Based on the timing of the abuse reports of Sandusky, it appears that TSM knew it had a ticking time bomb on its hands and Dr. Raykovitz took the opportunity to raise he and his wife's salary before the bomb went off.

In 2009, Sandusky was indicated as a child abuser by Clinton County Children and Youth Services and subsequently resigned from TSM (although his name and images were still used for fundraising efforts until 2011).   In that year, Raykovitz and Genovese dropped their salaries by about $6K each, likely in anticipation of increased scrutiny of the charity's finances.

Despite the late drop in salaries, a number of TSM board members voiced their displeasure over what they considered exorbitant salaries for Raykovitz and Genovese.   At least one board member resigned over it.

Analysis - Staff Salaries

Meanwhile, the average staff salary was fluctuating up and down from 2001 to 2007, until 2008 when TSM increased the number of total staff (less highest paid) from 19 up to 92.  The IRS 990s did not provide a full listing of the staff employees, however, the increased number of staff in 2008 is an interesting development, considering that the total compensation expense increased by approximately $12K over 2007 (see below). 

As was the case with revenues and expenses, it was difficult to reconcile the headcount numbers with the total compensation of the staff.   Without going into great detail, there is little correlation between headcount and total compensation.  In the early years, with a stable number of staff, the compensation costs are on a steady rise until 2002, then eight staff are added with hardly any increase in compensation.  From 2003 to 2006,  staff is relatively stable but compensation continues to escalate.  And, again, in 2008 the staff jumps to 92 people and the compensation topline stays relatively flat. 

Based on a source close to the charity, the staffing at the two regional offices were between 3 to 4 people, thus the staff of twelve appeared to be a good fit considering the organizational structure.

So, who was on TSM's staff and what were they doing?

It appears that the additional 73 people who were added to employment rolls in 2008 weren't being compensated very much.  Or perhaps their value to the organization was simply being a number and dropping the charity's average salary to a paltry $12,215 per employee n 2009 instead of the $50,763 it was in 2007.

Conclusions

The IRS 990 forms submitted by TSM were difficult to reconcile and were often incomplete or did not include the correct forms.  However, the sloppy book keeping was the least among the financial issues at TSM.   From the preceding analysis, it appears that the books were being cooked at TSM and that a thorough audit (using forensic accountants) should be conducted.


Next installment:  Where did the money go?

Yes, Virginia, There Is A Penn State

Top of Form

By Deborah  C. Beidel

"This letter to Virginia is based on the original editorial that appeared many years ago in the SUN as written by then editor Francis Pharcellus Church. The original piece was entitled 'Yes, Virginia, there is a Santa Claus.' Francis Pharcellus Church is the author of the original letter - a small number of words were changed from the original to make this Penn State version." 

"DEAR EDITOR: I am 8 years old. 
"Some of my friends say the Penn State we believed in no longer exists. 
"Papa says, 'If you see it in THE SUN it's so.' 
"Please tell me the truth; is there still a Penn State?

"VIRGINIA O'HANLON.
"115 WEST NINETY-FIFTH STREET."

VIRGINIA, your little friends are wrong. They have been affected by the BOT and the NCAA. They do not believe except what they read on ESPN. They think that nothing can be which is not comprehensible by their little minds. All minds, Virginia, whether they be men's or children's, are little. In this great universe of ours the BOT and the NCAA are mere insects, ESPN a mere ant, as compared with the boundless world about us, as measured by alumni intelligence capable of grasping the whole of truth and knowledge.

Yes, VIRGINIA, there is a Penn State. It exists as certainly as WE ARE and Success with Honor and Thon exist, and you know that they abound and give to your life beauty and joy. Alas! how dreary would be the world if there were no Penn State? It would be as dreary as if there were no VIRGINIAS. There would be no Peachy Paterno then, no academic excellence, no 500,000 alumni and friends to make tolerable this existence. We should have no enjoyment, except in sense and sight. The eternal light with which Penn State fills the world would be extinguished.

Not believe in Penn State! You might as well not believe in Joe Paterno! You might get someone to hire men to search the campus for the Joe Paterno statue, but even if they did not find it, what would that prove? Nobody sees Penn State, but that is no sign that there is no Penn State. The most real things in the world are those that neither children nor men can see. Did you ever see the Nittany Lion dancing on Old Main lawn? Of course not, but that's no proof that it is not there. Nobody can conceive or imagine all the wonders there are unseen and unseeable in the world.

You may tear apart Old Main to see what makes the noise inside, but there is a veil covering the unseen world which not the Emmert, nor even the united strength of the BOT and the entire NCAA, could tear apart. Only thousands of college students standing in the cold collecting $10,000,000 for kids with cancer, can push aside that curtain and view and picture the supernal beauty and glory beyond. Is it all real? Ah, VIRGINIA, in all this world there is nothing else more real and abiding. 

No Penn State! Thank God! Penn State lives, and lives forever. A thousand years from now, Virginia, nay, ten times ten thousand years from now, Penn State will continue to exist – for the glory, for the founders, for the future.

Part 2: Second Mile's Financials Don't Add Up

A Comparison Between The Second Mile's 2006 Annual Report and its IRS 990 Shows That The Organization May Have Overstated Expenses -- Deceived Donors

This is the second installement of a mult-part series looking into The Second Mile's (TSM's) financial matters, in an attempt to follow the money in the Sandusky Scandal.

In the last installment, TSM's revenues didn't add up. There were discrepancies between what was donated, reported to donors, and reported to the IRS.  Based on the analyses, it is possible that TSM had between $400,000 and $1,900,000 in donations that went unreported to the IRS and/or donors in 2006.

Let's take a look at how  TSM handled their checkbook and managed their programs.  Was the money donated to TSM use to help the youth of Pennsylvania or was it used for something else?

Using the publicly available 2006 Annual Report and the IRS 990, the first issue is that Management and General (M&G)expenses, which include compensation is understated.  Compensation and benefits at TSM totalled over $1.2M in 2006 and made nearly 60% of the charities expenses, yet M&G is reported at $283,207.  The second issue is that the costs for some of the programs appear to be inflated for the type of services delivered. 

Management and General Expenses (M&G)

M&G expenses are those expenses that cannot be allocated to specific programs.  These expenses include administrative portions of salaries, rents, utilities, and miscellaneous expenses.  The Second Mile reported M&G expenses of $248,208 to the IRS, while reporting $283,207 to its donors.  

While the report to donors overstates the Management and General expenses claimed to the IRS, the more interesting fact is that the total compensation, before being allocated to various programs, totalled $1.26 million, or nearly 60% of the Second Mile's operating costs.  However, this number was not visible to the donors because compensation costs were allocated against the the various programs (see below).

 

In 2006, the top officers at TSM (Jack Raykovitz, Katherine Genovese, Henry Lesch, Marc McCann, Sean Saunders, and Jerry Sandusky) combined compensation totalled $521, 977 according to the IRS 990. However, only $81,427 of the amount was attributed to Management and General expenses, while $331,977 was allocated to Program Services and $108,573 to fund raising.   However, adding the salaries of the top officers listed on the IRS 990 falls about $200K short of the half million plus reported.  As we stated earlier, the numbers don't add up.

Additionally, TSM paid out another $630,010 in compensation (it is not clear who was paid on the IRS 990), but only $98,282 was allocated to Management and General expenses, while $400,686 was allocated to Program Services and $131,042 to Fundraising.  There were approximately 19 people covered by this compensation expense according to the math from the IRS 990, averaging out to approximately $33K per employee.  These employees are not listed on the 990 and we could not verify who they were before publishing this post.

Foster Care

The expenses from the Annual Report are shown above.  

The first major discrepancy is Foster Care ($199K)  is not reported as one of the major programs on the IRS 990, while the Leadership Institute ($162K) is reported.  That is another indication that something is not quite right with the expenses because the largest of the expenses typically appear on the 990.

According the Annual Report, Second Mile's foster care activities were aimed at recruiting and retaining foster families in partnership with Children and Youth Services agencies.  The foster care activities consisted of rewarding families for program participation by sending them on day trips to local amusement parks and other recreational events.  In addition, the families were also provided with complimentary dinners to Hoss's Steak and Seafood restaurants.

Carol Smith, director of Centre County Children and Youth Services, in an interview with the Pittsburgh Post Gazette, stated that her agency's dealings with The Second Mile were minimal -- the nonprofit had provided plaques and restaurant gift certificates to CYS foster parents who reached certain milestones of service.

In 2006, 55 recreational events were conducted with 3,800 foster families participating. One hundred and fifteen foster families received the free dinner.  However, both the IRS 990 and the Annual Report concurred: Hoss's, Allenberry Playhouse, Knoebels Grove, Hersheypark, and other venues made in-kind donations to support the activities, that would have defrayed or completely covered the costs of these activities.  Also, in-kind donations were made by restaurants, transportation companies.  All told, in-kind contributions to TSM totaled $364,741.

Given the fact that foster care was not listed as a major program expense on the 2006 IRS 990 and has not been reported as a major expense since 2000 (when the cost was $46,426), it appears that this cost may be overstated.

Friend/Friend Fitness

The Friend and Friend Fitness programs are staffed with volunteers who serve as mentors and workout partners, respectively. 

The Friend Program provides a supportive environment for approximately 500 elementary school children who participate in activities with collegiate mentors from Penn State, Millersville, Lock Haven, and Villanova Universities.  In addition to the mentors, another 600 adult and student volunteers supported these activities by contributing time to present activities and/or providing materials for activities.


The Friend Fitness program is an individualized strength and fitness program for male and female adolescents.  In 2006, 93 teenagers participated in the program, with assistance from 79 adult mentors during twice-weekly sessions.  Students and mentors also participated in activities such as picnics, group workout, and luncheons.  While there was some cost associated with the latter, for the most part, this is program conducted by volunteers at facilities that are provided at no costs.

According to the IRS 900, the Friend Program costs were $234,365. There was not a separate breakout for Friend Fitness.  The Annual Report stated the combination of the two programs cost $263,254. While these costs are close in value, the overriding question is how do two programs staffed by volunteers end up costing a quarter of a million dollars?

Conclusions

 The numbers at TSM don't seem to add up.  Revenues appear to be understated while costs are overstated and the compensation figures are excessive when compared to other charities and foundations. A 2006 study by the Foundation Center revealed that the average compensation costs for a community charity/foundation averaged 12.1%, while the overall compensation costs for TSM were nearly 60%.

It's clear that a comprehensive financial analysis of The Second Mile should be conducted by forensic accountants and auditors to determine where the money was really spent.

Part 3:  Compensation at TSM

The Third Mile

In honor of Karen Peetz stepping down as President of the Penn State Board of Trustees.

Second Mile's Financial Statements Don't Add Up - Part 1

A Comparison Between The Second Mile's 2006 Annual Report and its IRS 990 Shows That The Organization May Have Understated Revenues  -- Deceived Donors 

Many in the public have questioned why no one at The Second Mile (TSM) was charged with failure to report child abuse in the Sandusky case.  TSM's Executive Director, Dr. Jack Raykovitz,  was informed that Sandusky showered with a child, yet the Pennsylvania Office of Attorney General did not see fit to charge Dr. Raykovitz.  Deadspin.com and others pointed to donations by TSM's Board to Tom Corbett's 2010 gubernatiorial campaign as a possible reason for the favorable treatment.

Along the same lines, many have questioned why the Penn State Board of Trustees (BOT) have barely, if at all, mentioned TSM during the course of the Sandusky Scandal.  As a result of the Board's avoidance of any discussion of PSU's relationship to the charity,  many have wondered  if there is something worse than the current scandal between the BOT and TSM. And is that "something" the impetus behind the BOT's "moving forward" effort?

With any scandal, the rule of thumb is "follow the money" -- and it appears that Second Mile may have had quite a bit of money on its hands that the IRS and its donors didn't know about.  Frankly, the IRS 990s and the Annual Reports prepared for donors just don't add up.  In fact, getting anything to add up on the TSM's reports is a maddening experience.

While we know there have been investigations of TSM by the U.S. Postal Inspectors and various others, it is not known if any investigative agency has done a thorough examination of the organization's finances. TSM's IRS 990 forms were completed by the accounting firm Richey, Cox, Hollis, Mock and Klein, PC of State College, but tax accounting firms generally assume that the client is being honest about the information provided on their returns. 

It is important to note that the analyses that follow have not been conducted using the rigor required by an audit, but provide examples of differences between the various statements about the financials of TSM using publicly available documentation.  

Annual Reports (the typically glossy publications sent to shareholders) are composed of two parts.  The first part - or the Management Discussion and Analysis - is the company putting its best foot forward and telling about all the great things it's done.  The second part is typically composed of the company's annual financial statements -- balance sheet, statements of cash flows, income statements, and notes pages.  The financial statements will differ between for profits, not for profits, and government.  All statements should follow generally accepted accounting principles.

TSM's 2006 Annual Report did not use a "two-part" format and only included selected financial data -- limited to its statements of revenues and expenses.  Most annual reports include audited statements; TSM's Annual Report did not.  This is an important distinction because people who routinely read annual reports may have assumed that TSM's financial information was from their audited report.  It clearly was not because all of the numbers between the two statements are different.

In terms of information about the financial health of the charity, the data the annual report provides was very limited.  However, one of the more revealing details in TSM report was its Angel Donor list, which included the names/company of each donor and the range of donation (see chart at left).  Companies and persons on the 2006 Angel Donor list with ties to the November 2011 Board of Trustees included:

-- United States Steel (John Surma),
-- Merck (Kenneth Frazier),
-- PNC Bank (Ted Junker*),
-- Lloyd Huck*, and
-- James Broadhurst
*indicates Emeritus Trustee

Angel Donors vs. IRS 990 Forms

The Angel Donor list was unlikely to be accurate because some donors named may not have followed through on their promised donation and/or they could have been categorized in the wrong category, however, one would expect that the total donations computed from the donor list would be within a reasonable range of the donor revenues on the IRS Form 990.  Our analysis determined that the Angel Donors contributed a minimum of approximately $1.8M in donations in 2006 and an approximate maximum of $3.8M.   Comparing the Angel Donor list to the revenues on the 2005 IRS 990 (approximately $1.3M), there was a difference in TSM 2006 donations between $498K and $2.5M.   The real number was likely somewhere in between, but here's how the figures looked based on the computations (note that the donations in the "$50,000 and more" category are capped at that amount and the Under $500 donations are based on figures based on the 1998 IRS990):

IRS 990 Form vs. Annual Report Donor Revenue

TSM's Annual Report contained selected financial information, including general statements of revenues and expenses.  For 2006, the Annual Report stated $1,395,108 in donations (see table at right), while the IRS 990 claimed $1,329,465 -- a discrepancy of $65,643.  This difference can be reconciled, however, because the IRS report contains restricted assets and the Annual Report includes in-kind donations.  When each variable is subtracted the IRS990 matches the Annual Report -- but the Angel Donor considerably larger than either figure.

What is the real number for donor revenues?

That would depend on how honestly and accurately the TSM recorded their donations upon receipt and whether those records would be available for examination by an auditor or forensic accountant.

But revenues are just one part of the financial equation at TSM.  We found the accounting of expenses to have similar discrepancies and accuracy problems.


Part 2:  Expenses at TSM to be released Thursday.

UPDATE: Franco's Questioning of Mark Emmert

Franco asks pointed questions to Emmert about how Sandusky got due process, but Joe Paterno was found guilty.  Asks for explanation from Emmert, who weasels out of it.  See full transcript below.

Hear the audio here


Transcript

Franco: ..The investigation by the state and county agencies found Jerry not guilty in 1998. Concerning 2001, Attorney General Linda Kelly did not tell the truth when she stated that Mike McQueary saw a sexual assault at Penn State in 2001.  You know this case went to trial and due process was served.  Linda Kellys charge of sexual assault at Penn State in 2001 was thrown out by the jury.  Jerry was found not guilty of 2001 sexual assault at Penn State.  So in both these cases and these two timeframes, Jerry Sandusky was found not guilty by due process.  Mark, how did you find Joe Paterno guilty during these two time frames?

Emmert:  Well, first of all, let me clarify the process.  So this wasn't, again, doing anything on his own.  Because of the unique nature of the Penn State case, we handled the case differently that we have in other cases. And we can talk about, and we don't have a lot of time, why that was, but the decisions that were made were made by Executive Committee and the Division I Board of Directors, with me participating in the course, being an active part of that discussion.  That group of people I just described are a group of 20 university presidents from around the United States.  They represent a cross section of Division I.  This wasn't one guy sitting in his office and deciding here's what I'm going to decide what to do.  Thoughtful conversation and deliberation among a group of people...had access to and read the materials...looked thoroughly at the Freeh Report...and the other materials that were available and reached a conclusion.

Secondly, uh, we, in the findings that were delivered and the consent decree that was signed, explicitly didn't find any one individual guilty of anything.  We expressly don't mention any one individual.  We said expressly that we were reserving the right to pass those judgments in the future after due process works its course.  So there's been no comment from me or any official comment from me or the Executive Committee or the Division I board on any of the individuals involved in this except for Jerry Sandusky, whose had due process and was found guilty of those crimes you said he was found innocent of.  Uh, and, so the process was not as -- it was much more deliberative and thoughtful than most people realize.  The reliance on the Freeh Report was a clearly thoughtful decision and logical decision.  When you consider the fact that, as I described, we the NCAA, our investigators don't have anywhere near the authority granted to the Freeh group.  The Freeh group was given carte blanche to look anywhere and everywhere inside the university.  We would never have had that authority. They were essentially given a blank check for resources, spent six and a half million dollars, interviewed 450 people, read over three million documents and e-mails -- I could have sent my entire team in there for five years and couldn't have gotten anywhere near that level of detailed understanding of what went on there.  Everyone on the Executive Committee and Division I board understood that.  So, to suggest that we could somehow conduct, and by the way, spend another two years - I see () in the room can understand that and spend another two years debating and discussing what happened at Penn State didn't make sense to anybody involved.  When the probability of finding anything in addition to the Freeh Report was zero.

Note:  Freeh was prohibited (by the OAG) from doing anything that would have compromised the ongoing prosecutions of Sandusky, Curley, and Schultz.  In other words, if he found evidence that would have exonerated any of those three men, he was prohibited from further investigating it or releasing it publicly.

Emmert:  So, so, I know this is a point which you and I hope respectfully disagree on.

Franco:  (garbled)

Emmert:  I  happen to love your passion for your university.  I happen to understand clearly why you have a commitment and dedication to that program that did so many good things and I can't say I would feel any differently if I were in your shoes.  I get all that.  We may be, pardon me, made the best, most thoughtful decision that we could out of the situation that no one....felt good about...and that was unprecedented in so many ways.  But, but, I want to be clear, we never singled out any individual.  People say why did you take Coach Paterno's records away from him?  We didn't.  We vacated the university's.  We didn't vacate yours -- you played in 1998, I guess.

Franco:  I graduated in, uh, 1972, but I guess my question was how did you or your Board come to that determination that Joe Paterno or whoever was guilty, when those two circumstances in 1998 did not even involve Penn State and in 2001, the jury found there was not a sexual assault at Penn State.  And, and, that's, so my question is...

Emmert:  Yeah, uh, you'll have to excuse me, but I want to make sure, as well, the time and I want to get to others, but the short answer is we relied heavily upon the voluminous evidence provided by the Freeh Report. (garbled)

Franco:  The report said in 1998 that Penn State was not involved in that.

Emmert:  Uh, uh, I read the report multiple times and I'm sure you have, and we'll have to agree to disagree.

From the Freeh Report, page 39, Key Findings:  While no information indicates university leaders interfered with the investigation, Spanier, Schultz, Paterno, and Curley were kept informed of the investigation.  

We've shown this Finding to be unsubstantiated based on the evidence.
----------------------------------------------------------------------------------------------------------
Franco asked Mark Emmert about the NCAA sanctions and the stripping of wins.  Emmert responded that the NCAA didn't find Paterno guilty and didn't strip away his wins.  Emmert claims the NCAA stripped away Penn State's wins.

Watch the video here

UPON FURTHER REVIEW: PPG's Collier Stated DPW and CYS Failed the Children

The biggest news coming from Franco's Town Hall was not John Ziegler's outbursts -- it was the writers' comments about the 1998 investigation and the NCAA sanctions.

By Ray Blehar

NOVEMBER 10, 2012, PITTSBURGH, PA:  During the panel discussion at Franco's Town Hall, long time Pittsburgh Post-Gazette sportswriter, Gene Collier, admitted that CYS and DPW failed in 1998.  The discussion followed presentations by Eileen Morgan and this writer, who covered the 1998 incident from a legal and evidentiary basis and in terms of investigative quality, respectively. 

"We've seen tons of convincing evidence here about the Centre County child youth services office, the Department of Public Welfare -- they're all part of the culture that doesn't want to find things out about someone like Jerry Sandusky," said Gene Collier.

Panelist Bob Dvorchak, co-author of Game Over, stated, "These are the kind of crimes that are invisible.  They happen right in front of you and you don't see them.  These people operate in secrecy.  They project an image, a personality, whatever you call it, it's a perfect cover. They're camoflaged. Sandusky was a saint. He was the male Mother Theresa of Central Pennsylvania until we found out he wasn't."  Quite an ironic statement considering Game Over was about the culture at Penn State and the alleged cover-up.

In response to John Ziegler's remark that media was promoting a false narrative, Collier stated,  "You're very anxious to show the failings of DPW, CCYS....and they should be.  They should be held to the fire because they failed these kids."

Panelist Rob Tribeck, a PSU graduate and attorney associated with PS4RS said, "What we're saying is the the trained professionals failed these kids - what about the people at Second Mile?"

Collier replied, "I agree with that."

Tribeck added, "The very people who are trained to investigate these kinds of people, investigated this in 1998 and let them walk out the door." He asked, "How is that not the story here?"

PSU Board of Trustee member, Anthony Lubrano, stated "we (Penn State) are the lead, and we're going to take it to a level that has never been before seen and, at some point, we are going to be very proud of that accomplishment....but we want to know what happened, how did it happen?  An inflammatory grand jury presentment that we know now was untrue and borders on prosecutorial misconduct? An organization responsible for the safety of these young children -- how are they not being held responsible.  Public organizations like child youth services and DPW, why aren't they being held responsible?  Why is it all Penn State?

Writers Weigh In on NCAA Sanctions

 As the topic turned to the NCAA sanctions, Gene Collier opined, "Regarding the NCAA sanctions, the columns I've written on this are at odds with the original columns" that called for the suspension of Penn State football.  I think the NCAA sanctions are psychotic."

"They pull out this sixty million dollar figure from the air, why not a billion?  Mark Emmert said that he admires the Freeh Report.  They vacate wins, Joe Paterno wins, back to 1998 when I think most of us would agree that 25 percent of Joe's wins or more were achieved against schools that were cheating like hell.  This is the NCAA overlooking itself and saying Penn State is dirty.  I mean it's preposterous."

Bob Dvorchak, stated, in response to a question on vacating Joe's wins: "I can't speak for the NCAA.  I've heard their reasons and much as you have.  I think they picked '98 because that is when an investigation was first done. How can vacating the victories of a coach or the players on the field helped to relieve to resolve this issue - I'm still at a loss to explain that."

Collier later stated, "I don't think the football program gave Jerry Sandusky unfettered access to the university. I think Old Main did that.  So I think it's still a Penn State scandal."

But not a Penn State football or athletics scandal.

An Ivory Tower Under Siege

by Deborah C. Beidel

"By the time someone gets here in 2014, it will be just a distant memory,” said Board of Trustees Chairperson Karen Peetz.

I’ve been counting and this week marked the 27th time that my Penn State pride has made me the recipient of a Jerry Sandusky remark. In a meeting with a number of health care professionals, I mentioned that I used to work at Hershey Medical Center. A physician said “Oh, Penn State.” I said, “Yes, I also did my undergraduate work there.” He said, “Did you know Jerry Sandusky?”

Everyone laughed – well, everyone except me.

So, Karen Peetz – that “moving on” and “distant memory” thing?

Not working so well outside your Ivory Tower.

At the Board of Trustees meeting on November 16, 2012, engaged alumni, some of them representing 15,000 other engaged alumni and supporters, asked specific questions regarding Board actions. Their comments made it clear that a significant rift remains between the Board and a substantial portion of the Alumni. Despite entreaties to move on and lip service to transparency, actual Board behaviors appear designed to confuse the alumni, students and the general public and to obfuscate/deny the truth.

Consider the following:

1. When a vote was necessary, Board resolutions were called by number, not a title or verbal description. The content of the resolution exists in agenda books not available to those in attendance at the meeting. How does a secret resolution satisfy the definition of transparency?

2. In August 2012, the Board established a public comment section of their meeting. Questions were submitted in advance so that answers could be prepared. At the September 2012 meeting, a non-scripted response “We did not read the entire Freeh report” resulted in negative publicity.

Well, that’s what happens when you go off script.

The truth sometimes slips out.

3. Questions were again invited for the November 2012 meeting and after submitting questions in good faith; rules were changed on meeting day and the Board refused to answer the invited questions. The Chair responded with an insincere and condescending “thank you”. Think about the optics of this decision. People are invited to submit questions, people travel to ask the questions and then they are refused an answer.

The cavalier decision-making and the insincere and condescending

 “thank yous” are behaviors characteristic of despots, not leaders.

4. When later questioned about the concerns raised at the meeting, the board chair replied, “That’s very disappointing. I would expect alumni to get behind the university when it needs them the most.”

Where was the Board of Trustees when the University needed them the most? Did they get behind the University? No. They were holding secret meetings, “losing” meeting minutes, structuring events to assure plausible deniability, and labeling people with legitimate questions “a bunch of anarchists”.

Let’s say it clearly – alumni are behind the University. Many alumni are not behind a Board of Trustees who act with callous disregard for University regulations, refuse to answer questions that it invites on its webpage, try to control the narrative by denigrating the concerns of the nation’s largest and most loyal alumni, and act dismissively of people raising legitimate issues - including the dismissal of recommendations from the State Auditor General by trustee Carl Shaffer who said “This is our university — this university is unique in a lot of ways from other universities. I think it’s up to this board to decide how we’re going to take this university forward.”

This Board’s arrogance and tone-deafness is mind-boggling.

The phrase “Ivory Tower” is defined as a state of sheltered and unworldly intellectual isolation. The term is usually applied to university faculty. However, if there is an Ivory Tower at University Park, it is inhabited by a Board of Trustees who engages in callous and condescending behaviors while displaying an elitist “we know better than you” attitude. Perhaps too many years in corporate businesses have built up ivory walls so insular that the Board has forgotten a University’s purpose. A University is a place of ideas – lots of ideas, different ideas and the right to challenge ideas. A University is a place for free thought and diverse thought. Imposing dogmatism, requiring adherence to groupthink, and squashing dissent is the antithesis of a University. It is far more representative of a dictatorship under siege.

Only when this siege mentality is replaced by thoughtful, collegial and transparent discussion, will this University “move on.”

Originally published Nov. 23, 2012

PS4RS.org