Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Psu Scandal Liabilities to Be Paid by Loan, Insurers

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Psu Scandal Liabilities to Be Paid by Loan, Insurers

Article excerpt

Penn State University president Rodney Erickson said Sunday a "combination of funds," including insurance coverage, would be used to pay the $60 million fine the NCAA imposed on the school as well as the costs of any litigation brought by victims of former assistant football coach Jerry Sandusky.

On CBS's "Face the Nation," Mr. Erickson said the university would likely provide a long-term loan to the athletic department from its financial reserves to pay the fine.

Last Monday, the National Collegiate Athletic Association imposed the fine and a four-year ban on the football team's postseason play and vacated all the team's victories dating to 1998. The invalidation of those wins strips famed Nittany Lions coach Joe Paterno, who died in January, of the distinction of being the winningest Division I coach.

The NCAA also ordered the university to reduce partial and full football scholarships each year for four years, a penalty expected to severely hurt Penn State's ability to recruit standout players.

The punishment was a stinging rebuke of the attempts at the highest levels of the state-affiliated university to cover up the sexual abuse of boys by Mr. Sandusky. Details of that alleged conspiracy of silence and inaction were outlined and condemned earlier this month in a 267-page report of an internal investigation at Penn State led by former FBI director Louis Freeh.

The extraordinary document accused Mr. Paterno, former university president Graham B. Spanier, athletic director Tim Curley, and Gary Schultz, a former vice president in charge of campus police, of protecting the school's image rather than Mr. Sandusky's young victims. The board of trustees was also faulted.

Mr. Sandusky, 68, was convicted June 22 on 45 counts of sexual abuse involving 10 boys he met through the Second Mile charity he founded for disadvantaged youth. He awaits sentencing.

Mr. Curley and Mr. Schultz await trial on charges that they failed to report allegations against Mr. Sandusky to authorities and later lied to a grand jury. Mr. Spanier has not been charged with a crime. Sources close to an ongoing grand jury investigation said he had recently become a potential target. …

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