Penn State Trustees to Discuss Status of Lawsuit over $60M Fine

Aug 12, 2014

The Penn State University (PSU) Board of Trustees will meet 8 a.m. Wednesday by phone to discuss a potential settlement of a lawsuit between state officials and the NCAA over the use of the $60 million fine PSU was ordered to pay in the wake of the Jerry Sandusky sex abuse scandal.

In 2012, PSU consented to a number of sanctions imposed by the NCAA in response to attempts by high-ranking university officials to hide Sandusky’s molestation of young boys. The consent decree included a $60 million fine to be used for programs for the protection of children.

The NCAA put together a committee to oversee the distribution of the funds to various programs across the country. However, legislation known as The Endowment Act was put forward by state Sen. Jake Corman (R-Centre) and passed in February 2013 to prevent the $60 million from being spent outside the commonwealth.

The law made state Treasurer Rob McCord custodian of the funds, which were to be spent on child protection programs in the Pennsylvania. Spokesman for the Pennsylvania Treasury Gary Tuma said Corman and McCord saw the issue as a question of fairness toward taxpayers.

“Penn State receives public funding,” Tuma said. “It’s essentially taxpayer money — certainly not all, because students pay tuition and so forth — but a significant part of Penn State’s budget is taxpayer money. And so therefore, the NCAA, they said, had no right to take that public money and spend it in other states.”

After passage of the Endowment Act, Corman and McCord filed suit to have it enforced. The act was challenged by the NCAA and deemed constitutional by the Commonwealth Court in April. During the proceedings, the court called into question the validity of the consent decree and forced Penn State to get involved in the suit.

“It was actually Commonwealth Court that said that because the consent decree is not at issue, Penn State has to be party to the suit, so now with the settlement discussions that are underway, Penn State has to be part of that,” Tuma said.

According to Corman, there is not much for the PSU board to consider at this point, since the lawsuit has not progressed much.

“Right now there are some discussions, very preliminary discussions, about a settlement as most cases have, but there’s been no offer or any serious negotiations at this point,” Corman said.

The NCAA has filed a federal lawsuit regarding the Endowment Act against Gov. Tom Corbett, state Auditor General Eugene DePasquale, state Crime and Delinquency Commission Chairman Mark Zimmer, and McCord that is awaiting further action.