Penn State: Sandusky settlements cost nearly $60M

Posted: October 30, 2013

Culminating more than a year of negotiations with a cast of high-powered lawyers, Pennsylvania State University on Monday announced that it would pay nearly $60 million to settle claims with 26 people who say they were sexually abused by former assistant football coach Jerry Sandusky.

The university's board of trustees had approved paying up to $60 million earlier this year, and the tab came to $59.7 million, the university said in a news release.

The first multimillion-dollar settlement, with a 25-year-old man who was abused in a campus shower, was announced in mid-August. University officials predicted at that time that 25 more settlements would soon follow as part of a global agreement.

The man, known as Victim 5 in court proceedings, was assaulted by Sandusky in August 2001, six months after then-graduate assistant Michael McQueary reported to university officials that he saw Sandusky rape a boy in a campus shower. Because the assault occurred so soon after McQueary's report and took place on campus, it was considered pivotal in reaching a settlement agreement with other victims.

Six of the 32 cases reported to the university against Sandusky - now in prison serving a sentence of a minimum 30 years - remain unresolved. The university has rejected some of those claims as without merit and remains in discussion about others, the university said.

Michael K. Rozen, a lawyer hired by the university to help settle the cases, has said that one of the cases was in litigation in Maryland, and that a suit was expected to be filed in another. Rozen could not be reached for comment Monday.

All the settlements are confidential, said university spokesman David La Torre, who declined to comment beyond the news release.

"The board of trustees has had as one of its primary objectives to reach settlements in a way that is fair and respects the privacy of the individuals involved," board chairman Keith Masser said in a statement. "This is another important milestone in accomplishing that goal."

Penn State president Rodney Erickson said, "We hope this is another step forward in the healing process for those hurt by Mr. Sandusky, and another step forward for Penn State. We cannot undo what has been done, but we can and must do everything possible to learn from this and ensure it never happens again at Penn State."

The university declined to give specific amounts of each settlement.

In an earlier interview, Rozen said there was a wide disparity in the amounts based on many factors, including severity of the abuse, location, and time.

He described three areas of claims: Those from before 1998, when the first report of abuse by Sandusky was investigated but dismissed; those between 1998 and the 2001 McQueary incident; and those after McQueary alerted Penn State officials.

Within those categories, the university also looked at where the abuse occurred, over what time frame, the severity of the abuse, and the credibility of the claims, he said.

Assaults before 1998 were assigned the lowest value because there is little if any evidence that the university should have known at that point.

Former university president Graham B. Spanier and two other university officials face trial on charges of failing to report and act on the abuse in the 2001 case.

The settlements will be reflected in the university's audited financial statements for the year ended June 30, officials said. The university emphasized that the settlements will not be funded by tuition, taxpayer dollars, or donations. Liability policies are expected to cover the claims, though the university remains in a dispute with its insurance carrier. Interest revenue will cover the rest, the university said.

The settlements add to the financial cost of the Sandusky scandal. The NCAA also hit Penn State with a record $60 million fine, a postseason ban, and loss of scholarships, though last month the NCAA announced it would begin to restore some of the scholarships.

Of the 26 settlements, 23 are signed and three are "agreed in principle," the university said.

Under the terms of each settlement, the victims agreed not to sue Penn State or the Second Mile, the charity Sandusky founded. They also ceded to the university their right to sue the Second Mile. Penn State plans to go to court to try to get the charity's insurer to reimburse the university for some of the settlement amounts, Rozen said earlier.

Lawyers whose clients were part of the settlement said the conclusion will help the young men.

"It's another important milestone for our clients in closing this chapter and moving on with their lives," said Matt Casey, whose firm represents seven victims including Sandusky's adopted son, Matt, and the man who said he was the one in the shower-room assault witnessed by McQueary.

"You can never take back what happened to these young men," said Ben Andreozzi, a lawyer who is part of a group representing nine victims, two of whom were referred to in the grand jury presentment. "But I think the university treated them fairly."

Cathleen Palm, cofounder of the Protect Our Children Committee, also saw the development as positive.

"Both for the individuals who were victimized and Pennsylvania's collective community of children, we're on the verge of what is hopefully a new chapter in the way in which we protect children," she said. "Obviously, the settlements can't nullify what happened to the victims, but hopefully they can serve as a way for the young men to heal."


ssnyder@phillynews.com

215-854-4693 @ssnyderinq

www.inquirer.com/campusinq

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