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February 14, 2012 1:33 PM

Penn State Discloses Sandusky Scandal–Related Legal Fees

Posted by Brian Baxter

As of December 31, Penn State had paid a total of nearly $3.2 million to outside lawyers, consultants, and public relations advisers hired to address a scandal that began with former assistant football coach Jerry Sandusky's arrest in November on sexual abuse charges, according to information disclosed Monday.

The details about spending on outside advisers came the same day Penn State announced in a press release that it had launched a "new openness Web site" geared toward answering questions, disseminating information, and sharing messages from university officials about their efforts to cope with the fallout from the criminal case against Sandusky and two former administrators accused of lying about what they knew of his alleged crimes.

The Web site, which includes a copy of Penn State's annual financial report to the NCAA, also addresses in a "frequently asked questions" section how much the school has paid its external lawyers and public relations professionals in the post–Joe Paterno era. The Sandusky scandal led to the abrupt firing of Penn State's longtime head football coach, who died last month at 85.

Rather than providing individual line items for each company or firm, the site lists the combined sums paid to groups of advisers.

For instance, Penn State has paid a combined total of almost $2.5 million to former FBI director and federal judge Louis Freeh's Freeh Group International Solutions, Reed Smith, Kekst Public Relations, and Ketchum Public Relations for "internal investigation and crisis communications" work.

The Philadelphia Inquirer reports that a more specific breakdown provided by a university spokeswoman shows that Freeh’s firm has been paid $1.43 million for its work, while his public relations advisers at Kekst received $283,000. Ketchum was paid $500,000 for its work on behalf of the school's board of trustees, leaving roughly $255,000 in fees for Reed Smith.

The Am Law Daily reported in November that the university had hired Reed Smith to advise its board of trustees after state prosecutors unveiled their charges against Sandusky and former administrators Tim Curley and Gary Schultz.

Freeh, also a name partner at Washington, D.C.’s Freeh Sporkin & Sullivan, was hired by Penn State in late November to conduct an internal investigation into the Sandusky matter and the university's failure to report the allegations against the former coach to the appropriate authorities. ESPN.com reported last month that several Penn State faculty members have expressed concern about Freeh's independence.

The new Web site also reveals that Penn State has paid a total of $467,940 for "university legal services/defense" work to lawyers from Duane Morris, Saul Ewing, Schnader Harrison Segal & Lewis, and Lanny J. Davis & Associates. The first three firms have long-standing Pennsylvania ties, with Duane Morris being the former home of Penn State’s first-ever general counsel Cynthia Baldwin, who announced last month she would resign.

Davis, a confidant of former President Bill Clinton who was profiled in The American Lawyer in 2010, left McDermott Will & Emery that same year to start his own solo shop in Washington, D.C. Among Davis's tasks so far: helping arrange for members of Penn State's board of trustees a sit down last month with reporters from The New York Times to explain their November decision to fire Paterno.

Penn State also reveals on its new Web site that it has paid $50,131 to Birmingham's Lightfoot, Franklin & White—a firm known for guiding institutions of higher education through tricky legal issues—and Richmond, Vermont–based college security consultant Margolis Healy for "externally initiated investigations."

The school is also on the hook for $210,309 in legal fees for lawyers representing Curley and Schultz, both of whom have been charged with perjury, and former president Graham Spanier, who was fired along with Paterno back in November. While Spanier has not been criminally charged, he has had to appear before a state grand jury on the Sandusky case.

The university also reveals on its new site that it committed $1.5 million from its share of revenue from a Big Ten bowl game in January to the Pennsylvania Coalition Against Rape and the National Sexual Violence Resource Center, as well as details of an incentive-laden employment contract for new head football coach Bill O'Brien.

On Monday, a state court judge ruled that Sandusky could visit with his grandchildren and that a jury drawn from individuals from Pennsylvania's Centre County should determine the ex-coach's legal fate, according to sibling publication The Legal Intelligencer.

 

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Interesting to spend so much on an investigation with no subpoena power. Are the trustees looking for others to pin the scandal on besides their own inept response? The openness looks more like a clever PR attempt to divert attention from themselves.

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