[Vision2020] Rewarding Enablers

Sat Jul 14 10:28:00 PDT 2012

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July 14, 2012
Paterno Won Sweeter Deal Even as Scandal Played Out By JO
BECKER<http://topics.nytimes.com/top/reference/timestopics/people/b/jo_becker/index.html>

In January 2011, Joe
Paterno<http://topics.nytimes.com/top/reference/timestopics/people/p/joe_paterno/index.html?inline=nyt-per>learned
prosecutors were investigating his longtime assistant coach Jerry
Sandusky<http://topics.nytimes.com/top/reference/timestopics/people/s/jerry_sandusky/index.html?inline=nyt-per>for
sexually assaulting young boys. Soon, Mr. Paterno had testified before
a grand jury, and the rough outlines of what would become a giant scandal
had been published in a local newspaper.

That same month, Mr. Paterno, the football coach at Penn
State<http://topics.nytimes.com/top/reference/timestopics/organizations/p/pennsylvania_state_university/index.html?inline=nyt-org>,
began negotiating with his superiors to amend his contract, with the timing
something of a surprise because the contract was not set to expire until
the end of 2012, according to university documents and people with
knowledge of the discussions. By August, Mr. Paterno and the university’s
president, both of whom were by then embroiled in the Sandusky
investigation, had reached an agreement.

Mr. Paterno was to be paid $3 million at the end of the 2011 season if he
agreed it would be his last. Interest-free loans totaling $350,000 that the
university had made to Mr. Paterno over the years would be forgiven as part
of the retirement package. He would also have the use of the university’s
private plane and a luxury box at Beaver Stadium for him and his family to
use over the next 25 years.

The university’s full board of trustees was kept in the dark about the
arrangement until November, when Mr. Sandusky was arrested and the contract
arrangements, along with so much else at Penn State, were upended. Mr.
Paterno was fired, two of the university’s top officials were indicted in
connection with the scandal, and the trustees, who held Mr. Paterno’s
financial fate in their hands, came under verbal assault from the coach’s
angry supporters.

Board members who raised questions about whether the university ought to go
forward with the payments were quickly shut down, according to two people
with direct knowledge of the negotiations.

In the end, the board of trustees — bombarded with hate mail and threatened
with a defamation lawsuit by Mr. Paterno’s family — gave the family
virtually everything it wanted, with a package worth roughly $5.5 million.
Documents show that the board even tossed in some extras that the family
demanded, like the use of specialized hydrotherapy massage equipment for
Mr. Paterno’s wife at the university’s Lasch Building, where Mr. Sandusky
had molested a number of his victims.

The details of Mr. Paterno and his family’s fight for money seem to deepen
one of the lasting truths of the Sandusky scandal: the significant power
that Mr. Paterno exerted on the state institution, its officials, its
alumni and its purse strings.

Since Mr. Paterno’s death in January, Mr. Paterno’s family, lawyers and
publicists have mounted an aggressive campaign to protect his legacy. The
family and its lawyers have hammered the university’s board of trustees,
accusing members of attempting to deflect blame onto a dying Mr. Paterno.
This week, they angrily disputed the conclusions of an independent
investigation that asserted Mr. Paterno and other top university officials
protected a serial predator in order to “avoid the consequences of bad
publicity” for the university, its football program and its coach’s
reputation.

On Friday, Wick Sollers, a lawyer for Mr. Paterno and his family, said that
it was Penn State that last summer proposed the lucrative retirement
package, and that many of the aspects of the proposal — use of the plane,
the luxury box — had existed in prior contracts.

Information about the salary paid to Mr. Paterno, one of the longest
serving and most successful college football coaches in history, had for
many years been hard to come by. In recent years, though, it became fairly
common knowledge that he earned about $1 million annually, not counting his
television deals and his contracts with shoe and apparel companies.

But speculation about just how long he was going to remain the
well-compensated coach of Penn State had been going on for a decade or
more. Mr. Paterno survived an attempt to force him into retirement in 2004,
and before the Sandusky revelations, his most recent deal ran through the
end of 2012.

According to university records, Mr. Paterno first expressed a desire to
revisit his contract in January 2011. It was very early in that month that
he learned he had been subpoenaed to testify before the Sandusky grand
jury.

But it was not until summer — after Mr. Paterno, the university president
and two other senior officials at the university had all testified before
the Sandusky grand jury — that the idea that Mr. Paterno might retire in
exchange for a multimillion-dollar payout gained traction.

By August, a deal had effectively been reached, though it and the idea that
Mr. Paterno might make 2011 his last season had not been announced at the
time. Details of the agreement were known to a handful of board members but
not shared with the full board, according to people with knowledge of the
events.

On Nov. 5, 2011, Mr. Sandusky was arrested, and two Penn State
administrators — men who were Mr. Paterno’s superiors — were indicted on
charges of failing to report to the authorities a 2001 allegation that Mr.
Sandusky had attacked a young boy in the football building’s showers.

Quickly, it became clear that Mr. Paterno, too, had failed to go to the
authorities or even to confront Mr. Sandusky after he had been told in
person of the episode. The prospect that Mr. Paterno, a revered figure,
might be fired by the board of trustees was suddenly real.

Mr. Paterno quickly issued a statement saying, in effect, that the board
need not act, that he would resign at the end of the season. Neither he nor
the university revealed that he had effectively agreed to do so already, in
return for an expensive financial package.

The board fired him anyway, a decision that caused rioting and led to an
angry and often very personal backlash against the trustees, but it agreed
to honor his contract. It was then that the full board came to find out
what the university was obligated to pay Mr. Paterno.

Over the ensuing months, as revelations about the role Mr. Paterno and
other university officials played in the scandal mounted, a schism
developed among the board members, according to several people with
knowledge of the events.

There were some who argued that it was unseemly to pay the remainder of the
money and other perks owed to Mr. Paterno, according to several people with
knowledge of the discussions. They wondered whether, given Mr. Paterno’s
failings, it might be possible to nullify the contract, or at least
renegotiate it and reduce the payout, the people said.

Others worried about the hostility they would face if they tried to strip
Mr. Paterno, still beloved in many quarters of the campus, of money that he
was contractually owed — a prospect that grew even more worrisome after he
died on Jan. 22 this year. During a conference call, one board member
worried aloud that failure to make good on what was owed to the Paterno
estate could lead to another “reign of terror” by Mr. Paterno’s supporters,
according to a person who was on the call.

With rumblings that the Paterno family was thinking of suing the board of
trustees for defamation, the board dispatched its lawyer to negotiate the
final payments. All the board wanted in return was a release protecting the
university from such a lawsuit.

The Paternos refused. Mr. Sollers said in his statement that “the retention
of their legal rights in a case of this magnitude and complexity is
customary and appropriate.”

The board of trustees ultimately agreed to make good on the full package
anyhow, and in April paid what was owed to the Paternos. Additional
demands, like the desire by Mr. Paterno’s wife to make use of the athletic
department’s hydrotherapy facilities, were met. The board did draw the line
at the family’s request to use the university’s corporate jet, arguing that
the contract limited that use to the coach himself. And it refused the
family’s demand to retain use of the stadium box next to the university
president’s, the one reserved for the head coach, offering the family the
choice of two other suites on a different floor.

Still, Frank T. Guadagnino, a lawyer hired by the board in November to
handle a variety of aspects of the scandal, suggested that the board felt
it did not have much maneuvering room when it came to the discussions with
the Paterno family.

“We were providing for payments due under the contract,” he said in an
interview Friday. “So we weren’t really negotiating.”

He added that, given revelations in the independent report released this
week that suggest that Mr. Paterno knew about allegations of child abuse
involving Mr. Sandusky as far back as 1998, the question over whether the
university could rightfully renege on paying the Paterno family what was
owed under the August amendments was “complicated,” and one that “we
haven’t looked at.”

At a board of trustees news conference Friday, Karen B. Peetz, the board’s
chairwoman, made clear that the issue would not be revisited. “Contracts
are contracts,” she said.

Tim Rohan contributed reporting.

 Ghostery has found the following on this page:Facebook Connect
WebTrends

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   - Findings Stun Even Paterno's Ardent
Supporters<http://p.nytimes.com/email/re?location=4z5Q7LhI+KVBjmEgFdYACPLKh239P3pgrEREBrLAJ4kGd/f/F1sr6BLEAfWIi/f2LZoGcns7YmIIuouedTVedR5ewHOm3L/wtGjyaiqj6NotmpMtVLtJfnAgOxMl/51v2SRlU1x5DB9RKEyvp56xCRdRNkOoA+pLV5tbyRXmIgfeCY8qSk0CiJRUoXlFaWAMJR0NIDUK8Ok=&campaign_id=129&instance_id=16807&segment_id=36158&user_id=2e59035bcefb20333e3669e05e7eef38>

-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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