Few Officials Talking As Sex Scandal Hits Penn State, Charity

November 8, 2011       Mark Hrywna      

Barely two days after two university officials took a leave in the wake of a child sex scandal, it remains to be seen how long legendary Penn State football coach Joe Paterno or the university’s president will remain in Happy Valley.

Jerry Sandusky, the defensive coordinator under Paterno for 30 years until the late 1990s, was arrested Saturday on 21 felony counts involving the alleged abuse of eight boys from 1994 to 2002. Athletic Director Tim Curley and Vice President for Finance and Business Gary Schultz surrendered to authorities on Monday, charged with perjury and failing to report suspected child abuse.

All three maintain their innocence, their attorneys said in published reports. Curley and Schultz have both taken a leave while the case is investigated. Sandusky is out on $100,000 bail.

The 23-page indictment, released Saturday, includes testimony from Paterno, Curley and Schultz and references as many as eight victims over the course of more than a decade. University President Graham Spanier, in a statement released on Saturday, expressed support for Curley and Schultz.

It’s alleged that Sandusky met the boys through The Second Mile, a group foster home he established in 1977. Today, it has three offices statewide, with 23 employees and a budget of $2 million, according to its most recent federal Form 990. As recently as 2008, Sandusky earned compensation of $57,000 as a board member, much of it for program-related duties, along with some fundraising and management activity.

The winningest coach in major college football history and head coach at Penn State since 1966, Paterno is not the focus of any legal investigation but some have called into question how much he knew and when he knew it, and whether he should have gone to authorities rather than his athletic director. On Tuesday, the university canceled Paterno’s scheduled weekly news conference, drawing the ire of dozens of assembled media.

Officials at the charity and university did not return messages seeking comment.

According to the Pennsylvania Attorney General’s office, a graduate assistant in 2002 alerted Paterno that he’d seen Sandusky having sex with a boy in the locker room showers, which Paterno then reported to Curley. State police, however, were never notified. The grand jury testimony indicates the grad assistant testified that he saw the sex act but Curley and Schulz told a grand jury it was some inappropriate conduct or “horsing around.”

The Second Mile issued a 450-word statement, indicating CEO Jack Raykovitz was informed by Curley in 2002 that an individual had reported he was uncomfortable seeing Sandusky in the locker room shower with a youth. “Mr. Curley also shared that the information had been internally reviewed and that there was no finding of wrongdoing. At no time was The Second Mile made aware of the very serious allegations contained in the Grand Jury report,” the statement read.

Sandusky retired from The Second Mile in September 2010, according to the charity’s statement, but barred him from any activities with children since 2008, after other allegations arose. The charity was first contacted by the Attorney General’s office early this year.

The state board for The Second Mile has 37 members, in addition to boards for the Central, South Central and Southeast. The organization has three offices in Pennsylvania.

An honorary board listed on the group’s website has 21 members, including Paterno, Hall of Fame baseball player Cal Ripken, Jr., former Notre Dame coach and current ESPN commentator Lou Holtz, former NFL linebacker and general manager Matt Millen and actor Mark Wahlberg.

Jeffrey Tenenbaum, a partner in the Washington, D.C., law firm Venable, LLP who is not involved with the case, said one of the most important things a charity must do in the wake of a scandal is not make the situation worse from a potential liability perspective. “For example, if there are damaging facts that may come to light, as part of an internal investigation, make sure that you have counsel run the investigation, to take full advantage of attorney-client privilege and protect sensitive information,” he said.

“Part and parcel to legal exposure comes P.R. [public relations] exposure,” said Tenenbaum. A nonprofit often will bring in a crisis communications firm, he said, which should work hand-in-hand with attorneys, with an eye toward legal protection. “It’s not for sweeping damning, sensitive information under the carpet,” he said. In the wake of a crisis, Tenenbaum said first a nonprofit must assess what really happened, where potential breakdowns occurred, what steps can be taken in limiting the legal and PR fallout.

While it’s not possible to be prepared for every situation that that comes to mind, Tenenbaum suggests that nonprofits should develop some kind of crisis management plan. “Not for the specifics what could transpire,” he said, but a plan that lists key people to contact, with contact information, and sequential steps that need to be followed, such as “check-the-box” type scenarios to follow.

“It’s a very advisable game plan for nonprofits to have because this stuff happens more often then you’d think, and that can be very damaging to your reputation,” said Tenenbaum.

Some of the most poorly executed crisis communications among nonprofits occurs when there are multiple spokespeople, “not being on the same page and not having a coordinated game plan. It can be extremely damaging.”

There may be internal investigations going on within the nonprofit, looking for who to blame, where there were breakdowns, who’s going be hung out to dry, and who’s going to save the organization,” he said. “There are a lot of difficult decisions to be made,” said Tenenbaum, who declined to comment specifically on the Penn State case because he wasn’t intimately familiar with the situation.

“Frankly, most important thing is, the first thing that came to mind, really something that every nonprofit should do, is look at its own house, make sure its own legal house is in order. Doing some sort of legal internal examination or legal audit, make sure there are proper policies and procedures in place, internal controls, things like that,” said Tenenbaum. “You can’t always avoid situations like this, but you can make them less likely to occur or catch them much earlier,” he said.

Any Penn State-related groups on Facebook have been ablaze with postings all week, with alumni and non-alumni both offering support for the football coach while others calling for his ouster, along with that of administrators and anyone involved.

In a statement, the Penn State Alumni Association said it has received emails, social network postings, and calls from alumni expressing their deep concern regarding the charges — and we share those concerns.” All alumni communications are being acknowledged and forwarded to multiple members of the university administration.

The alumni association said it supports the university’s Board of Trustees, which met Sunday night and announced steps designed to increase the safety and security of all University facilities and to make changes to promote sufficient procedures. The chair of the Board of Trustees will appoint a “task force to engage external legal counsel to conduct an independent review of the university’s policies and procedures related to the protection of children — not intended to interfere with the ongoing judicial process; publicize the findings of the independent review; review police reporting protocols with administrators, and enhance educational programming around such topics.”

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