Pennsylvania State University's tab for the Sandusky case: $3.2 million

Posted: February 14, 2012

Pennsylvania State University has incurred nearly $3.2 million in legal, consultant, and public relations fees as a result of the case against its former assistant football coach charged with molesting boys, the university said Monday.

A small portion of the cost is expected to be recovered through insurance policies, the university said. The rest will be covered with money other than tuition, taxpayer money, or alumni donations, the school said. The university said the fees would be covered by interest on a repaid loan and an athletic project that it maintains is not taxpayer money.

Included in the $3.2 million is $1.43 million for the school's internal investigation headed by Judge Louis Freeh after Jerry Sandusky's grand jury indictment on child sex-abuse charges in November. That breaks down to $1.1 million for Freeh's law firm - Freeh, Sporkin & Sullivan, of Wilmington, Washington, and New York - and $283,000 for public relations work for Freeh connected to the investigation, a university spokesman said. An additional $500,000 went to the Ketchum public relations firm of New York for crisis management for the board of trustees.

The university also rang up a $210,000 bill for the legal defense of its suspended athletic director Tim Curley and former senior vice president Gary Schultz, both charged with perjury and failure to report a 2002 incident of Sandusky's allegedly molesting a boy in a campus shower. That amount also includes legal coverage for former president Graham B. Spanier, who has not been charged in the case but had to appear before the grand jury.

The cost figures - covering expenditures through Dec. 31 - were posted on a website the university launched Monday evening to follow through with its promise of being more open with information. There was no information on how much the university has spent on the case since December.

"It's a work in progress," university spokesman Bill Mahon wrote in an e-mail. "The site will expand over time to include additional information."

The site - - also includes employment contracts for president Rodney Erickson, football coach Bill O'Brien, and acting athletic director David M. Joyner. Details of those contracts, including Erickson's annual base salary of $515,000, had been previously released.

But the new information raised questions: It said Spanier was paid $711,000 in 2011 through Nov. 9, when he was forced to resign. He remains a tenured member of the faculty on sabbatical, the school said. How much he continues to earn is unknown.

His "ongoing payments from the university are confidential," the university said on the website. A university spokesman said a confidentiality clause in the contract negotiated for Spanier's departure prevented the university from releasing the amount. Spanier's legal fees for negotiating that contract also were covered by the university, the spokesman said.

The university said it was unsure whether Spanier would return to teach after his sabbatical.

The website detailed how the university plans to pay costs associated with the case.

About $400,000 could be eligible for reimbursement by insurance, a spokesman said. The rest will come from interest on a $60 million loan that the university made to its Hershey Medical Center and from athletic department payments related to its financing of the Beaver Stadium expansion, the university said.

The university said it would not use tuition, taxpayer and alumni donations even if it exhausted those other sources.

Penn State's new website comes as the General Assembly begins its budget debate and amid calls for the state's flagship university to be more open with information. Gov. Corbett's proposed budget would slash funding for the school 30 percent.

Besides the costs of the Sandusky case, the legal and consulting firms receiving the fees are named on the site.

Among the other firms receiving money in connection with the Sandusky case are the Kekst & Co. and Ketchum Inc. public relations firms and Reed Smith L.L.P., a global relationship law firm.

The law firms Saul Ewing L.L.P., Duane Morris L.L.P., Lanny J. Davis & Associates L.L.C., and Schnader, Harrison, Segal & Lewis L.L.P. will receive a combined $467,940 for the university's defense and legal services, according to the website. A further $50,000 was earmarked for "external investigations" to be paid to Lightfoot Franklin, a litigation firm, and Margolis Healy, a campus safety and security firm.

Also on the website were the costs for the on-campus memorial services for former football coach Joe Paterno: $28,000, $6,000 of which were covered by university funds, and $22,000 from the athletic department's "discretionary fund." Paterno was fired as head coach in the fallout from the Sandusky investigation.

Contact staff writer Susan Snyder at 215-854-4693 or or @ssnyderinq on twitter.

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