Sunday, November 23

Media Wrong About Bluff, Death Penalty, and NCAA Influence

The preponderance of the evidence to date shows there was no death penalty ultimatum or bluff and that PSU was behind the narratives of the Freeh Report and the NCAA Consent Decree

By
Ray Blehar


Since November 10th, there has been a deluge of documents flooding the legal system.  The November 10th Corman v. NCAA filing alone was 325 pages. That was followed by more Corman filings on the 12th, 13th (2), and then a Paterno v. NCAA filing on  the 20th.

As in any case, the more information/evidence that is found, the clearer the picture gets.  

For those in the media who have not kept a close watch on the case, it was easy for them to (again) jump to conclusions based on a word or two in emails and a few other documents.

From their abbreviated review, the media concluded that PSU was bluffed into believing that the NCAA could sanction them.  They also jumped to the conclusion that the NCAA had influenced the Freeh Report  and that PSU came close to getting the death penalty.

Those stories are all wrong.


PSU influenced Freeh Report, not NCAA 

Nothing the NCAA briefed to the Freeh group about major violations or lack of institutional control was mentioned in the report.  In fact, the NCAA is only mentioned three times in the report and the best the Freeh report could muster was that the PSU compliance staff was understaffed.  This allegation, of course flies in the face of over a half century of results showing that PSU never had a major rules violation...and still doesn't.

The end notes of the Freeh Report reveal that it was mostly sourced from discussions with the PSU BOT members, Cynthia Baldwin, and the 1998 University Park police report.  The claims of being an exhaustive review are greatly exaggerated.  More was left out of the Freeh Report than was put in it.

Emails obtained by Ryan Bagwell and Bill Cluck revealed the "Core Group" who guided the construction of the report were PSU's Frazier, the PA government's Tomalis, FSS's Omar McNeil and Louis Freeh.  PSU BOT leaders, Karen Peetz and Keith Masser, were infrequent addressees on the emails.

Finally, the "culture" allegations lodged in the Freeh Report originated with the PSU Board and Erickson's Five Point Promise, specifically point number 1.


1.  I will reinforce to the entire Penn State community the moral imperative of doing the right thing - the first time, every time

-- We will revisit all standards, policies and programs to ensure they meet not only the law, but Penn State's standard. To oversee this effort, I will appoint an Ethics Officer that will report directly to me. 


-- I ask for the support of the entire Penn State community to work together to reorient our culture. Never again should anyone at Penn State feel scared to do the right thing. My door will always be open.


After Freeh proclaimed PSU's culture to be corrupt - based mostly on a dubious hearsay account of a crime allegedly witnessed by a demented janitor - PSU had Gene Marsh let the NCAA know that PSU agreed with the Freeh Report's assessment of Penn State's "culture" problem.




As Marsh would later explain in August 2012, the NCAA believed the so-called lack of institutional control was caused by the "culture," not a violation of NCAA rules.  He pointed to Article 2.1, which states the President or Chancellor has authority over athletics, as the primary reason for the sanctions.  However, an honest interpretation of the language reveals that the scope is compliance with NCAA rules and regulations, not ensuring coaches police the conduct of retired coaches or second guess the decisions of child welfare officials.


Principle of Institutional Control - NCAA Constitution Article 2.1.1
It is the responsibility of each member institution to control its intercollegiate athletics program in compliance with the rules and regulations of the NCAA. The institution's chief executive officer is responsible for the administration of all aspects of the athletics program, including approval of the budget and audit of all expenditures.

Winding back the clock to November 10th, 2011, Emmert in an ESPN interview stated that the NCAA would wait for the outcome of the criminal investigation before deciding how the NCAA would address the Penn State issue.  






The criminal cases against PSU officials were not concluded, however the NCAA decided to abandon their normal processes, citing the "unprecedented" nature of the case.

But the real reason the NCAA got involved was because: 1) Penn State wanted them to and 2)  coming down hard on PSU would boost the embattled organization's image.

As Marsh wrote above -- Erickson accepted the Freeh Report (on behalf of the Board) and then threw Spanier, Paterno, Curley, and Schultz and the "PSU culture" under the bus.  

The Board's  "goals," so to speak, were to get one more authority to confirm their decisions from 11/9/11 and to continue to assist the OAG in prosecuting PSU officials in the court of public opinion, if not in the eventual criminal trials.  

PSU was not "bluffed," communicated with NCAA all along

In January 2012, Erickson knew that the NCAA was informed of McQueary's gambling issues and some other potential minor rules violations.  

Evidence shows that both issues were uncovered during the criminal investigations relating to Sandusky, Curley, Schultz, and Spanier, given that Frank Fina advised PSU to not represent one of the possible criminal defendants allegedly related to the aforementioned issues. 

The NCAA rejected using this information in sanctioning PSU (i.e., no mention of them appear in the Consent Decree) because the information was obtained through the criminal justice system -- and not the so-called "independent" investigation by Freeh.

PSU Athletics:  "Fastidious on rules violations."
In the same time-frame, the NCAA also was told that the PSU Athletics Department compliance officials were "fastidious on rules violations (e.g., giving donations)."  The NCAA, likely realizing a case of Lack of Institutional Control (LOIC) couldn't be made on legitimately obtained evidence, responded that it would "wait for Freeh Report."   

Prior to the publication of the Freeh Report, emails were leaked to the press that resulted in reports that PSU officials were more concerned with the "humane" treatment of Sandusky, had no concern for victims, and that Graham Spanier may face charges in the case.  Not so ironically, PSU's comment on the email leaks/press reports was that "it would wait for the Freeh Report."

PSU, NCAA made case with media events
In short, PSU and the NCAA used every means at their disposal to dig up evidence that could be used to nail Paterno and PSU Athletics - but that evidence was hard to come by, even with Freeh using intimidation tactics on witnesses. 


Louis Freeh:  All show, no substance....
...and the media keeps falling for his act.
In the end, PSU and the NCAA were banking on Freeh's reputation and well crafted media events to overcome the lack of evidence in the case.  As history shows, the Freeh Report could not be delivered to the media in advance of his press conference due to a (planned) server crash.  The media simply ran with Freeh's press conference remarks without doing any fact-checking.

The quick acceptance of the report by Erickson, Frazier, and Peetz was astonishing to Penn Staters, who at this point, still believed that the PSU BOT was capable of rational thought and were somewhat honest people.  

However, the quick "approval" and the even quicker move to reach a settlement with the NCAA indicated that the two parties had prior knowledge of the flimsy evidence in the Freeh Report and were moving fast before the public learned the report was a sham.

It appears that by the morning of July 13th, PSU and the NCAA had been engaged in discussions and had formulated a plan among the top brass. That group likely included  Erickson, Tom Poole, and Frank Guadagnino for PSU and  Emmert, Remy, and Jim Isch for the NCAA.





















In Erickson's interview on July 17th, he stated that Penn State would be responding to the four questions asked by the NCAA on November 17th,  2011 -- after which PSU would negotiate "appropriate sanctions."    

It's likely that this was one of the "bluffs" involved in this case, given that Erickson had already agreed to using the Freeh Report as the response to the questions and emails indicate the NCAA was already discussing sanctions.

The next passage will show that Erickson and high ranking PSU officials -- to include Gene Marsh -- lied about what transpired with the NCAA.  


Don Remy's email destroys myth of Death Penalty "Ultimatum"

The November 13th  Penn State filing in response to Corman's request for documents appears to hold the most important e-mail (Exhibit M) to date.  Correspondence of September 7, 2012,  between Don Remy and Gene Marsh revealed how the PSU/NCAA Consent Decree was developed.  Note that Remy stated the following italicized remarks are the statement he would make to the public, however the front end of his email to Marsh confirmed that the Death Penalty controversy resulted from Penn State's PR plan.


On July 10, 2012, the media disclosed that the Freeh Report would be issued and a
press conference would be held on July 12, 2012. I contacted the Penn State University Office of
General Counsel to inform them of the NCAA's position on this Report. Because Steve Dunham had
not yet taken office...

...on July 11, 2012, I spoke with acting general counsel Mark Faulkner and
others. I informed them that it would be the NCAA position when the Freeh Report was released that
we expected Penn State to respond to the November 17 letter and then the NCAA would determine
our course of action. That course of action could include anything from doing nothing to conducting a full blown enforcement investigation and going through the infractions process.

On that same day, July 11, 2012, President Emmert delivered a similar message to President Erickson. On July 12, 2012 the Freeh Report was issued and the NCAA released the message we had communicated to PSU: we expected a response and then we would see what was next. 

On July 12, 2012, you (Gene Marsh) contacted me for the first time and indicated that you would handle drafting the response for PSU, that you would be vacationing but would be available by mobile and we should try to connect the following week. We tried to connect over the weekend and...

...on Monday, July 15, 2012, you and I spoke and recognized that our clients (NCAA and Penn State) were contemplating the possibility of resolving matters without a response to the letter and without an enforcement investigation and infractions hearing, but rather through some summary resolution wherein Penn State would agree to the findings of the Freeh Report and the NCAA would impose a set of penalties based upon those findings.


Death Penalty: ..there's a chance...
On that same day, President Emmert appeared on a pre-scheduled interview with PBS where he discussed the Freeh Report and indicated that the NCAA was waiting for Penn State's response to his letter. In that interview he acknowledged that the traditional enforcement process was available and that all penalties, including the so-called death penalty were in play.

On July 17, 2012 the NCAA Executive Committee met and discussed the approach of a summary resolution based upon Penn State's adoption of the Freeh Report that would include various penalties. On that same day, David Berst and I communicated to you the proposed penalties and the approach of a binding consent decree. You will recall that the proposed fine was originally discussed to be $30 million and subsequently raised to $60 million and we initially neglected to report on the vacation of wins, but immediately followed up the call with an e-mail to that effect. President Emmert had a similar conversation with President Erickson.

Late night on July 20, 2012 you were sent a draft of the consent decree, pending NCAA Executive Committee approval. On July 21, 2012, the Executive Committee voted to approve the concepts of the penalties as they were spelled out in the final consent decree and that was communicated to you.

On July 23, the consent decree was executed and announced.

The Erickson video, as well as emails and drafts of the NCAA press release show that the penalties were changing as the process moved toward the 23rd.  

For example, the fine changed from $30 million to $60 million.  Emmert originally planned to rescind Paterno's 2010 Ford Foundation Award, but later relented.   

This was no take it or leave it, Death Penalty ultimatum -- it was just as Ed Ray truthfully reported.  

Ray's correspondence noted that the EC was overwhelmingly against suspension of play when it took its final (unanimous) vote on the penalties that would be enumerated in the NCAA Consent Decree.  The deposition of David Berst (page 221) revealed it was "understood by Gene (Marsh) that we might not ever get to the point where we could prove a case that would finally result in the death penalty."

So if Gene Marsh understood that the NCAA would have a difficult time justifying a case for the "death penalty," it would defy logic that he would get upset over Ed Ray's comments that the Death Penalty was quickly dispensed with by the NCAA Executive Committee.  

Of course, the reason he was upset was because Ed Ray's comments contradicted those of his client's (Penn State).


Collaboration on Public Relations

Based on the evidence above, the premise that the NCAA imposed the "unprecedented" process on PSU is clearly a lie. The vast majority of evidence to date supports the theory that it was a collaborative process.  

The Board also collaborated on the public statements that were devastating to the University, but amazingly kind to Karen Peetz and Rod Erickson.   

With regard to the latter, the PSU Executive Committee's (handwritten) meeting notes from 7/22/2012 reveal that "inner circle" requested Mark Emmert praise them, while throwing Paterno and others under the bus.




























Emmert's press conference reveals he did a great job praising the Board and condemning Paterno (e.g., hero worship) and PSU athletics.  












As you read the preceding passage, I expect you were as dumbfounded (and quite possibly, as seething) as I was that the PSU Board and Erickson never spoke up to correct the record, even if just about academics.

There is no question that these individuals only cared for their own self-interest -- not the University's best interest.

Maintaining the Lies: The August 12, 2012 BOT Meeting

On August 12, 2012, the Board called a special meeting to discuss the process by which the NCAA imposed the consent decree and the sanctions on PSU and to affirm support of Rodney Erickson, whose authority to sign the CD was challenged by some trustees. 
  
As the discussion of the meeting turned to supporting Rod Erickson's decision to sign the CD, Peetz, Erickson, and Marsh all had their lies straight.


I absolutely support President Erickson and his  decision to accept the consent decree as the only real  option in the extraordinarily difficult circumstances  and the choices we were presented.  -- Karen Peetz



The next most substantive discussion was on Thursday evening (July 19th), and that message was loud and clear.   I was told that I should know that the majority of the  board of directors at the NCAA believe that the death  penalty should be imposed.  That was as late as Thursday evening and that's the first time that I heard, although I understand other places -- other    
numbers may have been tossed around, but that's the first time that I heard a multi-year death penalty. -- Gene Marsh


 Our legal team then began discussions with  NCAA legal counsel on Monday, July 16th, and it was clear that the NCAA was not interested in negotiating  the terms of the consent decree.  It was a take it or  leave it proposition, and despite our attempts to push  back on the sanctions as we learned about them we  didn't, as Gene indicates, receive the draft consent  decree in writing until the early hours of Saturday  morning then.  -- Rodney Erickson

Erickson's August 12th  statement contradicted his remarks on July 17th, which clearly were that PSU would be negotiating the sanctions.  As much of the evidence above shows, Erickson is guilty of lies of omission about quite a few things in this case -- some things could be considered an obstruction of justice.

Marsh, who had considerable experience with the NCAA, knew that the option to go the traditional enforcement route was available and his discussions with Remy and Berst revealed that he knew the NCAA would be hard pressed to make a case for the death penalty. 

His remarks to the Board about Article 2.1 being the "law of the land" for LOIC in this case were indeed a lie.


Peetz:  No mastermind.
As for Karen Peetz, she was not the mastermind behind any of this, but was willing to assist with the PR campaign to make her "leadership" of the BOT look good, while smearing Paterno and the football program.  

Peetz, who played field hockey at PSU, held a grudge against the football program, which unbeknownst to her, funded her own sport.  

Obviously, Karen is just as brilliant now as she was then.

Conclusion

As more evidence has come out, proper interpretation of the information reveals that select members of the PSU Board of Trustees, such as Erickson, Frazier, Tomalis, Peetz, and Surma, as well as key members of the PSU legal team, were firmly supporting the OAG's narrative that Paterno and key members of the administration had covered up Sandusky's crimes.

They hoped that the NCAA Consent Decree, with provisions stating that PSU could not challenge or appeal it through the NCAA's process or a judicial process would convince Penn Staters and supporters that it (and the Freeh Report) was the final word -- and the only solution was to "move forward."

They failed.

8 comments:

  1. Ray,

    Thanks again for a great job on this. One suggestion is that you paste a copy of the above into an email to President Barron for use in his upcoming Freeh report review. I have little hope that his review will amount to anything of substance and be a repeat of the "move on" culture. The one glimmer will come if he actually reads some or all of your work.

    ReplyDelete
  2. You continue to put reporters to shame with your expert analyses.

    You suggest Erickson as a key player but he could just as easily have been a puppet of the core BoT members. Erickson stated publicly he never wanted to be President because he didn't like to make decisions.

    I doubt the core BoT members would have allowed Erickson to craft his Five Point Promise all by himself. The BoT was upset that Spanier allegedly changed the script of his speech on Curley and Schultz so they would have kept a new President under their thumb.

    ReplyDelete
    Replies
    1. Tim,
      I agree that Erickson's five point promise was likely crafted by Surma and the others in the cabal that torched PSU. However, I have evidence that shows Erickson was a lot more savvy than people would ever expect, especially when it comes to investment management.

      Like Keith Eckel, Erickson's abilities (and his deceptiveness) is greatly underestimated by many....but not me.

      Delete
  3. Peetz was nothing but John Surma's lap dog and he made sure she was head of the Board when he stepped down as de-facto Chair. Since he was now known as the man who fired Joe Paterno, he wanted a lower profile and not be head of the BOT, which would have brought even more scrutiny to it, but Surma still waned significant influence over the BOT. Peetz's grudge against the football team was ancillary.

    Karen Peetz has been an executive at the Bank of New York Mellon and worked on the executive committee that reported to BNY Mellon's Board of Directors, which just happen to contain John Surma, until he stepped down in April 2012. So Surma had some influence on Peetz's compensation and stock grants from his position on the BoNY BOD. Also very coincidentally, in January 2012, Peetz became a member of the Board of Directors for Suncoke Energy, a company that produces a key ingredient for making steel, and one of Suncoke's 3 main customers is U.S. Steel, in which John Surma was the CEO and Chairman.

    Peetz was doing whatever Surma wanted and it was obvious from the "Surma Vendetta" that he wanted Paterno gone. Which seemed to be his primary goal of being on the PSU BOT as he retired from the BOT after his term was up in June 2013. Corbett wanted Spanier gone and Surma wanted Paterno gone and they both helped each other to get what they wanted. Peetz was just used by Surma to make sure the message with Board stayed consistent with their actions in November 2011. They used the Freeh Report, the NCAA, and the sanctions to ram home the notion that PSU's "culture" of hero worship, which further degraded Paterno, to the delight of Surma.

    ReplyDelete
    Replies
    1. Rums,
      Agree with you assessment.

      Back in the early days, SMSS published a piece about Karen Peetz being a puppet of Surma and pointed out many of the same relationships you mentioned.

      http://notpsu.blogspot.com/2012/11/the-difficulty-of-being-karen-peetz.html

      However, expanding on the business end of things, other BOT members with connections who were members of the Boards of Directors in the petroleum industry were Surma (Marathon Oil/Ashland Petroleum), and Frazier (Exxon Mobile).

      Ever notice all of the "coincidences" involved in this scandal? I guess it was a no brainer for the BOT to approve a natural gas fired power plant for PSU.



      Delete
    2. The connections on the BOT with natural gas and fracking in the Marcellus Shale were ever bigger than with petroleum, especially when you considered how much money it contributed Tom Corbett's campaign. A lot of steel is needed to drill the wells into the Shale and this greatly benefited US Steel. While ExxonMobil made billion dollar purchases of companies exploring in the Shale in Pennsylvania and other surrounding states.

      Plus, Terry Pegula made billions in natural gas and donated almost $100 million to PSU to build a hockey arena and fund a Division I hockey program. He also owns the NHL Buffalo Sabres and just paid over $1 billion for the Buffalo Bills. Pegula is also very good friends with John Surma with both of the playing hockey at PSU at different times. And don't forget, Pegula also gave a press conference after Sandusky's arrest to reinforce his financial donation to PSU and said that everyone needs to be investigated to find out their responsibility in this including "you know who", which was an obvious reference to Joe Paterno.

      http://www.blackshoediaries.com/2011/11/17/2569479/terry-pegula-defends-penn-state-while-digging-at-joe-paterno

      Delete
  4. Another connecting thread is the giant insurance broker Marsh, who was the insurance broker for many if not all of the various parties involved

    ReplyDelete