Penn State has incurred nearly $16.8 million through June 30 in costs related to the Jerry Sandusky sexual abuse case and surrounding issues, the university announced on its Progress website Tuesday.
The largest chunk of that money was used for funding internal investigations and crisis communications, totaling $9,972,854. Money under this category were distributed to companies such as Freeh Sporkin & Sullivan — which ultimately produced the report compiled by former FBI Director Louis Freeh — and Daniel J. Edelman, Inc., one of the public relations firms the university recently hired.
Six months prior, the same category had spent $2,468,137, as released on the previous “openness” website.
Freeh’s report, which gave Freeh’s team “unfettered access” to conduct the $6.5 million independent investigation prompted by the Board of Trustees, was released on July 12 and detailed what failures had occurred at the university involving Sandusky and suggestions for the university to reevaluate its governance.
Sandusky was convicted on 45 counts of child sexual abuse in June.
Funding for officers’ legal defenses, including the defense of former Interim Senior Vice President for Finance and Business Gary Schultz, former Athletic Director Tim Curley and former university President Graham Spanier, amounted over $1.5 million and was paid to eleven different counsels.
According to the Article 5, Section 2(a) of Penn State’s bylaws, every university officer is entitled to be compensated by the university for expenses, counsel fees, and liabilities “in connection with any actual or threatened claim, action, suit or proceeding, civil, criminal, administrative, investigative or other.”
None of the officials have been convicted, but Schultz and Curley both await a trial in January on charges of perjury and failure to report suspected abuse.
In February, when the original “openness” website was launched, the university reported that it had spent $210,309 as of Dec. 31, 2011 for the legal defense of Spanier, Schultz and Curley. Today’s figure represents a $1.4 million increase since the end of 2011.
Nearly $4 million has been spent on university legal services and defense.
The website also answered the question of how the $60 million fine resulting from the National Collegiate Athletic Association sanctions would be paid. Using funds from football reserves, the deferment of capital and maintenance expenditures and a loan to the Penn State Athletic Department, the $60 million will be paid over the next five years in increments of $12 million. The fine was incurred to fund and support prevention of child abuse programs.
No costs for legal defense and public relations stem from student tuition, taxpayer funds or donations. The university maintains General Liability and Directors and Officers insurance policies, which is expected to fund defense claims against its officers, employees and trustees, according to the Progress website.
A disclaimer on the website also stated that some of the fees and costs are expected to be reimbursed to the university under its insurance policy.
University spokesman David La Torre said he had “no other information” regarding the updated financial figures.
