Thursday, January 28

Larry Schultz: Chronicle commentary

Trust is reciprocal. I can love you, but that does not mean you will love me. You might hate me, but that does not necessarily mean I will hate you.

But if you do not trust me, I am very unlikely to trust you. If you ask me to make a list of all the people I do not trust, I would begin by making a list of those who do not trust me. Masser publicly speaks the language of distrust about his fellow trustees. In the Chronicle, no less.

If the PSU BoT is riven by distrust, then it is the job of leadership to rebuild the broken trust. Given an opportunity to reach out, in even a tiny way, to the other side, in a publication devoted to Higher Ed topics, so that plenty of people who work in universities all over the country can read it, Masser punts. He believes that the way I will begin to trust him is by getting over it, by "moving on," by ignoring the massive failures of leadership he and his friends enacted, like he does.

That is not going to work for me, for thousands of other Penn Staters, for the Alumni Trustees he despises so much, or for the good of PSU. The Board Mr. Masser runs is now made up of people who ignored the blooming Jerry Sandusky matter until it blew up in their faces. Some of them left over the last few years, but were replaced by virtual clones, selected by organizations which know for a fact that running PSU in secret, with hidden agendas instead of transparency, is best for them.

Mr. Eckel seems to think the bottom line reason why we got caught flatfooted in the Sandusky case is because we did not have enough committees. "If anything, he says, the Sandusky scandal demonstrated that Penn State needed more committees, including audit and risk, and people of diverse experience were required to lead them." I guess the idea is that if we had more committees maybe someone would have passed the word when we had a warning a week or ten days before the indictments were handed down that it was coming. Maybe had a meeting to talk about it. You know, rather than Garban and Surma and Broadhurst simply sitting on it.

Having never publicly admitted that there was any problem with the failure to act, there is zero likelihood that in the over 100 Freeh recommendations they claim to have implemented there is anything that solves that problem. If anything, the instincts of the Board are worse, more closed off, more akin to a dictatorship than ever before. Which means this could happen to PSU again tomorrow.

When a person assumes fiduciary duties s/he undertakes to do whatever is necessary within the law to protect the beneficiary (in this case, PSU). Suppose you sit on a board in 2010 and you find out that in the 1990s some contracts were let to the relatives of a Board member without competitive bidding, and you hear an allegation that there were kickbacks to a Board member. You do not have to call a press conference, but you have to find out if it is true and determine whether it is still going on. It is the basic and prudent thing to do to protect PSU.

Today the Alumni Trustees need to know whether the University spent $8+ million on a report that is untrue. We need to know because based upon that report, with little review and no vote of the board membership, the University torched its own reputation. You cannot pretend that did not happen. The Alumni Trustees have a clear fiduciary duty to investigate this fateful waste of the University's assets. To deny them the records of the Freeh Report is to deny them the tools to do the job the law requires them to do. To make them pay their own lawyers to find out the truth in the service of their fiduciary duty is likely an untenable position for the University.

"Where’s the decision that we’re going to make that’s based on the Freeh report?" asks Mr. Barron, Penn State’s president. "It’s hard to see that there is one."

How about a decision regarding whether we wasted $8+ million on a report full of falsehoods which injured the University? How about an after-action report regarding the sloppy, slow, ad hoc nature of the entire response to Sandusky? Those seem like worthwhile endeavors to me. Of course, the construction of Barron's question is interesting. Of course there is no decision anyone is going to base on the Freeh Report, because everyone knows it is a bad report, even those who studiously ignore that fact. That is why we have to study it--so there can no longer be any question about what a colossal tragedy it is.

The central thesis of the Chronicle article is that there is no trust on the PSU Board. Masser's and Eckel's comments show that to be undeniable. The rather simple fix is to build trust, but their comments rule that out. 

The decision we are going to make based on the Freeh Report, Dr. Barron, is whether and how the University might have done a better job of confronting this disaster. More committees? In a word, no. We are not going to have a quarter billion dollars to waste on this stuff every couple of years. Perhaps seeing how we made these mistakes will cause us not to repeat them. The only thing stopping us from repeating them right now is there is (apparently) no Jerry Sandusky operating in our midst. Of course, that is what we thought when there was a Jerry Sandusky operating in our midst.

Larry Schultz is a candidate for the Penn State Board of Trustees

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