PS4RS Statement on PMA Insurance Documents Release

July 12, 2016 — Today, a Philadelphia judge released settlement records relative to Penn State’s ongoing dispute with PMA Insurance. The insurance carrier had previously declined coverage of $93 million in claims that the University had already dispersed to more than 30 Sandusky accusers.

Files released today provide no additional or definitive information with regard to Joe Paterno’s knowledge of accusations that allegedly date back to the 1970s. In fact, they raise even more questions as to the University’s overall liability, given the fact that most of the claimants were not part of the original Sandusky court proceedings, spoke only through depositions represented by their attorneys, and have not had their accusations corroborated nor substantiated in a court of law.

In fact, the most damaging and consistent information provided by the claimants was the initiation of every one of their relationships to Sandusky through The Second Mile, the non-profit organization he founded and funded. Penn Staters for Responsible Stewardship has continually called for a state inquiry into the activities and liability of the charity that falls under the purview of the Office of the Attorney General, and served as a gateway to every one of Sandusky’s victims.

“Analysis of the information released today further underscores the Penn State Board of Trustees’ inability to act in the best interest of Penn State at every turn,” said Maribeth Roman Schmidt, spokesperson for Penn Staters for Responsible Stewardship, the grassroots watchdog group that has been critical of the trustees’ handling of the Sandusky case since 2011. “It is our opinion that the legal subcommittee is criminally negligent for paying out claims without first having the approval of the insurance company, and with seemingly haphazard inconsistency,” she said.

“Furthermore, today’s documents provide stunning insight into the University’s true opinion of the Freeh Report, for which it paid more than $8 million,” continued Schmidt. In its bid to hold PMA Insurance responsible for paying $93 million in claims, Penn State attorneys actually argued AGAINST the validity of the report, even scolding PMA for having a “myopic preoccupation with the Freeh Report.”

“This is the very document the University not only readily accepted without argument or challenge in 2012, but actually relied upon to pay the NCAA $60 million in fines. It is astounding that Penn State is blatantly trying to play both sides,” said Schmidt. “Why would the University accept the Freeh Report for the purposes of the NCAA Consent Decree, yet rebuke it when it comes to settlement claims?”

A final outcome of today’s document release exposes criticism regarding the lack of vetting of the claimants and the amounts of the settlements. An expert who reviewed the settlements characterized the payments as high to “extremely high.”

“This is a clear fiduciary breach on behalf of the Penn State Board of Trustees, and specifically the Legal Subcommittee who negotiated these settlements. We ask that any and all trustees who were privy to this process be summarily dismissed from their roles on the Penn State board.”

Penn Staters for Responsible Stewardship (PS4RS), with more than 40,000 members, was formed to promote positive change within the University Board of Trustees, demanding transparent, trustworthy leadership. For further information on PS4RS, please visit www.PS4RS.org, email ps4rsinfo@ps4rs.org, or go to http://www.facebook.com/PS4RS. Follow PS4RS on Twitter at @PS4RS.

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