Recent documents show that not only did PSU fail to properly vet claims, but it also very likely attempted to use their insurance coverage to pay for Freeh's phony investigation
Penn State University paid $260,626.31 to Louis Freeh for work allegedly done with regard to the first claim made by John Doe A.
Exhibit G of the most recent document dump confirms that an October 2013 Penn State University (PSU) letter (at 7) asked that the Pennsylvania Manufacturer's Association Insurance Company (PMA) reimburse PSU for the settlement amount, alleged investigative work done by Louis Freeh, and the negotiations conducted by Feinberg Rozen.
PSU paid the claimant $1.25 million and the Maytag men of Feinberg Rozen picked up $29,788.12 for their "work."
PMA eventually rejected PSU's request for reimbursement based on its 1992 insurance policy's sexual molestation exclusion.
No Work By Freeh
While PSU alumni and followers were recently appalled to hear that the University paid around $93 million for unvetted claims, it is even more disturbing to think that PSU tried to fraudulently pay Louis Freeh out of this boondoggle.
According to the timeline of the settlements, John Doe A filed suit on November 30th, 2011 and that PSU submitted its coverage claim to PMA on January 6, 2012. On January 30th, PMA notified PSU it was not entitled to coverage.
That means Freeh was on the job for about seven weeks -- including Thanksgiving, Christmas, and New Years holidays -- when his firm allegedly racked up $260K of investigative and risk reduction services.
According to a detailed analysis of the Freeh Report, the investigative activities in November were mostly interviews and background information provided by then-PSU General Counsel Cynthia Baldwin.
December investigative activities shifted to the football program, discipline related to football through interviews with student affairs, and investigation into possible NCAA violations.
According to documents in the Corman case, Freeh's team was involved in setting up meetings with the NCAA and Big Ten at this time.
It appears that investigative activities ceased around December 19th. It is notable that on December 19th, the Freeh group interviewed officials in charge of football sports camps, who informed the investigators of Joe Paterno's lack of involvement in the football camps (Freeh Report at 36).
In early January, Freeh's team met with the NCAA and then followed up with PSU Athletic Department officials on January 10th. On January 12th, they began looking at Sandusky's retirement benefits then moved on to investigating the Clery Act.
Finally, Exhibit Z (at 63) of the lawsuit contained a summary of a February 16, 2012 discussion written by PSU's Risk Officer Gary Langsdale. The document noted that PSU had no idea what Louis Freeh's group had gathered that might be available for discovery in the case.
The available evidence reveals that Freeh's team did no work in conjunction with the John Doe A lawsuit during the time PSU was negotiating with PMA and provided no materials to the University related to the lawsuit (as of February 16, 2012). As such, it appears PSU attempted to fraudulently bill PMA for Freeh's work that was unrelated to the pending lawsuit.
If this isn't malfeasance, I don't know what is.