The BOT's Rush to Settlements Is Almost As Fast As Their Rush To Judgment
By
Shari Copenhaver
While there are many reasons for settling lawsuits, any such settlements must
be well planned, researched, and have both a legal and moral basis on which to
stand for the party making amends. No party should ever be compelled to settle
a grievance unless and until that party has been legally proven to bear
culpability for the grievances enumerated in the complaint. Unless, of course,
that party’s intent is to distract from another issue or to otherwise realize a
separate goal.
First and foremost, the Board of Trustees must ensure its fiduciary duty to The
Pennsylvania State University. In so doing the Trustees should not only employ non-affiliated
experts in the fields of law, negotiation, and investigation, but fulfill their
duty to ensure those experts reach truthful, complete, unbiased and legal
conclusions and recommendations. It is critical that the Board establish the
criteria by which it considers the University liable for restitution in this
case, in which the responsible party or parties have not yet been clearly
determined. The Board has not yet thoroughly reviewed the facts by which it
could make such a determination, since those facts have not yet been fully
revealed due to pending criminal trials. The multiple missteps and blunders of
this Board over the past 15 months warrant close scrutiny through the
collective lens of questioning motive. This latest announced intent to move
quickly with victim settlements should create a sense of urgency in the minds
of all Penn Staters and concerned citizens.
Questionable decisions by the BOT
Given this Board’s questionable decisions over the past 15 months, a decision
which is this potentially costly – in terms of both treasure and prestige –
must be undertaken from the outset with nothing less than complete
transparency. Virtually nobody who has been witness to the Board’s various
meetings since November 2011, has come away from those proceedings with a
belief that the Board has been honest and forthright. To the contrary, the
majority of the witnesses to these Board Meetings have come away believing its
members were far less than honest and open, particularly with regard to the
Freeh Report. In fact, this Board
refuses to even take seriously the many legitimate points brought before it.
It is a great concern that the Freeh Report is apparently being used, once
again, as the basis for another series of University actions which, like the
NCAA sanctions, are simply not proven to have any reasonable degree of merit.
Certainly, in the wake of the most recent disrepute of Freeh’s report, the Trustees
should be eagerly and insistently demanding a reassessment of Penn State’s
legal liability regarding victims of Jerry Sandusky, known and unknown. It is the Board’s fiduciary duty to protect
the income and assets of Penn State University.
We must thoroughly question the direction the Board has taken in response to
Freeh’s recommendations. We must also be careful not to confuse changes in
governance process with unsupportable actions to make right every fall-out from
a scandal which so far has been only loosely, if at all, proven to be
associated with the University. There is no compelling and sustainable
argument, outside of media opinion spread much like a cancer, to defend any
Board action which considers settlement with any victim at this point in time.
Settlement, at this premature juncture, is not justified and simply does not
best serve the university, the community or the victims.
To date, only one man has been both indicted and convicted of perpetrating
crimes against any of the victims who have approached Penn State for
compensation. That man is Jerry Sandusky. Three Penn State employees await
trial on “allegations” of enabling Mr. Sandusky’s criminal actions. The
determination of their guilt or innocence has not yet been made.
Who should be compensated? And How Much?
If those trials take place at some future date, which could be in 2014, guilt
or innocence will be determined. At this point, the only evidence of
culpability by Penn State is a wholly discredited report prepared by Mr. Freeh,
whose reputation has been questioned time and time again over decades. There is
simply no evidence capable of convincing any reasonable person that Penn State
is culpable for Sandusky’s crimes. A nagging question is “What criteria does
the Board intend to use as the basis for a settlement award to a victim with
claims of suffering attributable to Penn State University?” Furthermore, “How
can the Board even develop a criterion for calculating such an award without
full and fair disclosure of all facts with regard to this case?”
Jerry Sandusky’s victims deserve full and proper compensation for the horrors
inflicted upon them and for the future trauma they will likely experience as a
result thereof. The Board’s approach to granting that compensation, however, is
simply not justified at this point in time. There is great disparity in the
number of identified victims and the number of potential victims which could be
realized once the legal process has been concluded.
A proper and expert analysis must be made before a logical determination can be
made of the true victim count. The fact that this process has not been untaken
should, in and of itself, set off alarms for all members of the Board. The
Trustees have a duty to consider timing, methodology, processes and propriety.
Such a pause by the members of the Board should not be construed as being about
the victims; as it is rather about the duties inherent upon each member of the
Board of Trustees. Again, the victims deserve compensation for the egregious
acts carried out against them; but there must be clarity as to how much of that
compensation is attributable to Penn State University.
A History of Bad Decisions
It’s blatantly obvious that there is an urgency by the Board to ‘move forward’.
Consider what has occurred to date.
• Members of the Board were made aware of the Grand Jury proceedings no later
than March 2011. With language which appears to be meant to confuse, the Board
claimed it was not actually informed of the details of what had occurred.
Ironically, those selected members with knowledge chose not to share that
knowledge, however vague it may have been, with the Board at large. The Board’s
denial of complete knowledge does not absolve its members of responsibility for
University governance. Such is simply not plausible deniability.
• We now know that the dismissals of Messrs Paterno and Spanier were
ill-advised and most likely orchestrated largely by one central figure with an
ax to grind. See the Surma Vendetta, Part 1, and the Surma Vendetta, Part 2 The Board’s handling of this crisis following
the release to the public of information about the indictment appears to have
been, by design, an attempt to focus early suspicion toward the motives and
intent of those Penn State administrators and away from the motives and intent
of the members of the Board. Those actions by the Board, in effect, declared
Penn State complicit in enabling Sandusky. The result of that declaration
removed any chance of a reasoned approach to fully investigate and review Penn
State’s culpability. It also fueled the media frenzy, giving the media members
cause to draw and spread irrational, perverse conclusions.
• Although the PSU Trustee’s Executive Committee attempted to keep its contract
for investigative services a secret, Trustee Anthony Lubrano was able to locate
the document. According to the language in the document, called a “Letter Of
Intent”, the Board chose a controversial, high-profile figure, Louis Freeh, to
“perform an independent, full and complete investigation of the recently
publicized allegations of sexual abuse at the facilities and the alleged
failure of PSU personnel to report such sexual abuse to appropriate police and
government authorities.”
• The report of the “Special Investigative Committee” (a/k/a Freeh Report),
initially accepted by nearly every mainstream media outlet, has now been wholly
deemed a failure by all but a few (most likely those who never bothered to read
and analyze the report). It appears that
Freeh’s team failed to adhere to its’ contractual obligations. They failed to interview important witnesses
– including Messrs Paterno, Curley and Schultz – as well as key 1998 members of
the Centre County District Attorney’s Office. Referring to Freeh, Trustee Anthony Lubrano
stated, “He didn’t deliver what he promised us.” Lubrano said, “The Freeh
report purports to be the result of something that it is not — a full and
complete investigation. As a result, it does a disservice to all those parties
it was intended to help — the victims, the university and the community at
large.” Accordingly – and appropriately
– Trustee Lubrano has publicly called for a refund of the monies paid to Freeh
and his team of laypersons.
• Despite what we were told by the Board when Freeh was first hired, Freeh was not
independent and he did indeed have connections to both Penn State and toThe Second Mile (Sandusky’s charity). Freeh delivered a scathing indictment of only
four individual Penn State administrators through a report which has been
determined to be incomplete, biased, lacking in scope (subpoena power) and
essentially an opinion based on highly questionable conclusions drawn from pure
speculation with no supporting evidence.
• The Board has remained deafeningly silent in response to repeatedly requests
for a formal review of the Freeh report, yet it presses forward with
implementation of the recommendations contained in that discredited and still
un-reviewed report. In stunning displays
of arrogance during public questioning at Board meetings, the Board leadership
has repeatedly responded to such questioning with responses such as, “Your time
is up.”
• The University President has allowed the NCAA to threaten and enact
unprecedented and unwarranted sanctions against Penn State on the basis of a
report which the Board refuses to formally accept. The Board – to whom the
University President reports and answers – has not interfered with, condemned
or even questioned the President’s actions.
• The Board has consumed its time with organization designed to implement,
without question, the provisions of the report containing recommendations for
improved governance of the University, yet it has not accepted that report. In response to outcries from the University
community, the Board has enacted cowardly limitations on dialog with community
members. The general membership of the Board is inwardly focused and
unresponsive to suggestions or inquiries put forth by concerned members of that
community.
• In response to the release of the exhaustive reports by Thornburgh, Berlin
and Clemente, experts commissioned by the attorney representing the Paterno
family, the Board remains silent. Despite the fact that those experts cast
grave doubt on the credibility of the Freeh Report, the Penn State Board Of
Trustees has steadfastly refused to question the inaccuracies of the Freeh
Report.
Moving Forward -- To the next bad decision
The Board recently announced its intent to move forward quickly to complete
compensatory settlements with up to 30 victims of Jerry Sandusky. The Board’s
actions in doing so are being questioned by tens of thousands of members of the
University family. In fact, even many members of the public have now begun to
question the motives of the Board. The motives of this Board are unclear. The
Board’s collective actions over 15-plus months give every appearance its
members are hiding additional information. If that is the case, any settlements
negotiated could fall flat. Without full and fair disclosure of all pertinent
information, there is an inherent risk of the contracts for these settlements
being invalidated at some point in the future if additional facts are
uncovered.
Without a proper analysis, it is unlikely that the costs for mental health
treatment have been properly projected. Likewise, there is a high degree of
uncertainty that ALL victims have come forward. As a result, it is virtually
impossible to estimate the total cost to the University if it assumes primary
culpability for Sandusky’s crimes.
Settlement without full disclosure and knowledge is unacceptable. That is basic contract law. If, after
entering into settlement contracts with the current known victims, it is
determined through the criminal trial process that Penn State has little or no
culpability, the members of the Board will have committed a huge and
irreparable breach of their fiduciary duties to the University. At this point,
they would have paid monies to the victims from institutional funds which were
not owed by the University. If it should
be determined through those trials that PSU had a greater level of culpability
than previously known, the settlements now being negotiated could be
invalidated, particularly if it is determined that any member of Board had
knowledge which was not disclosed. In either case, the University will suffer
additional irreparable harm. Those outcomes
and the possible devious intent by Board members are speculative. The same, however, is true of the Board’s
decision to accept liability. Simply
put, Penn State’s liability is speculative, period.
Penn State’s level of culpability has absolutely not yet been determined. A
rush to settle claims by victims without such a determination is unjust and
premature. The University’s donors, including Pennsylvania taxpayers, would be
well served by the initiation of steps to halt these latest premature attempts
by the Board. In fact, the University’s
donors are entitled to have someone step forward to protect their investments
in higher education. Such action could
potentially be taken by the Pennsylvania Legislature, the Attorney General or
some other government official with appropriate authority to do so.
The Final Rush to Hide the Truth
Penn State’s Trustees are determined to settle with Sandusky’s victims
NOW. It is very common for a settlement
contract to contain a nondisclosure clause prohibiting release of information
pertaining to that settlement. If these
pending settlements currently being negotiated include such a clause, that
creates an alarming situation if any victim could provide testimony critical to
the criminal trials of Messrs Curley, Schultz and Spanier, regardless of
whether that testimony would help to prove guilt or maintain innocence. Whether a victim’s testimony would contribute
to a conviction or an acquittal, each victim’s testimony – each victim’s
horrors – each victim’s story – is relevant to the outcomes of these pending
trials. As such, it is imperative that
they not be prohibited from providing testimony, regardless of whether that
helps Penn State or hurts Penn State. In
either event, prohibiting the release of all relevant information is detrimental
to all sufferers of acquaintance child sexual victimization. The judicial process is designed to uncover
and arrive at the truth, whatever that truth may be.
Note: Shari Copenhaver did not attend PSU. She is a Pennsylvania resident who is concerned about the financial mismanagement at PSU.
