Legal bills, PR for Jerry Sandusky scandal cost Penn State $23.5 million

Legal, public relations bills reach $23.5 million

mdawson@centredaily.comDecember 11, 2012 

  • Legal and PR bills update

    $12,224,583 — Freeh report and crisis communications $6,278,678 — university legal services and defense $2,812,396 — legal bills for former Penn State officers $1,564,791 — other expenses $667,186 — external investigations

    Total: $23,547,634

— Legal bills and crisis communications in the fallout of the Jerry Sandusky scandal have cost Penn State more than $23.5 million, the university reported Monday.

That means the scandal has Penn State on the hook for more than $86 million, adding the $60 million fine from the NCAA and the $2.5 million in severance pay to former President Graham Spanier that was triggered when he was let go last year.

The price tag is sure to increase as former university leaders Spanier, Tim Curley and Gary Schultz can send their legal bills to the university for the attorneys’ work defending them against the charges they lied to the grand jury investigating Sandusky and that they covered up allegations in 1998 and 2001.

The $23,547,634 in legal bills and PR is for work completed as of Sept. 30, the university said. It covers various bodies of work, like the Louis Freeh investigation, in-house legal work, legal bills for the former administrators and a variety of communications firms.

More than half of the $23.5 million went to pay for the Freeh report and the crisis communications. That tally is $12.2 million, although the amount is not broken down.

Penn State has been billed $2.8 million by attorneys representing the former university leaders like Spanier, Curley, Schultz and former university general counsel Cynthia Baldwin.

Another $6.3 million is for the university’s own legal services and defense, paid out to Saul Ewing, Duane Morris, Lanny J. Davis and Associates, Jenner & Block LLP, ML Strategies, Lee, Green & Reiter Inc., McQuaide Blasko and Document Technologies Inc.

The university has been billed $667,186 for work from outside investigators, which include paying the law firm of former Sen. George Mitchell, who was appointed by the NCAA to oversee Penn State’s compliance in adhering to an athletics integrity agreement with the group.

Penn State has paid $423,382.19 to Mitchell’s firm, DLA Piper LLP, for work in August and September, said university spokesman David La Torre.

Penn State has paid $1.5 million in “other institutional expenses.”

Penn State President Rodney Erickson has said the university has insurance policies that will cover the legal bills for the former university administrators. The PR work will be paid out of pocket, as will be the $60 million NCAA fine.

The first payment toward the fine, $12 million, will be paid Dec. 20, the university said.

The athletic department will repay the university the $60 million plus interest over 30 years.

This story has been corrected from its original version.

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