Penn State releases first installment of $60 million NCAA fine

mdawson@centredaily.comDecember 21, 2012 

— The Penn State athletic department’s first of five payments toward its $60 million fine from the NCAA over the Jerry Sandusky scandal was initiated Thursday.

Penn State took the first step to make good on the first of five $12 million payments by moving the money into a money market account. The money has not changed hands yet, as the NCAA’s child abuse task force still is figuring out how the fund the fine is going into will work.

The $12 million loan from Penn State to its athletic department comes with a 4 percent interest rate over 30 years. The money is coming out of university reserve funds.

Penn State spokesman David La Torre did not know if the athletics department was on a monthly repayment plan.

The interest rates and loan terms for the next four payments will be determined each year.

La Torre said university officials do not expect the money from the first payment to have any adverse affects on the athletics department or result in significant cutbacks.

On Wednesday, Forbes released a list of the most valuable college football programs for this year, and Penn State came in at No. 13, down from No. 3 last year. Forbes said Penn State reported $66 million in revenue and had profits of $36 million.

The $60 million fine was part of the consent decree Penn State signed with the NCAA and the Big Ten that includes a post-season bowl ban for four years, a reduction in scholarships and vacating 112 wins from 1998 to 2011.

The NCAA has organized a task force that is developing policies on how to handle the money from the fine, which will be put into an endowment.

The NCAA has said a quarter of the money will be spent in Pennsylvania, but local victims advocates and officials have said they want to see all of the money stay in the state.

Republican U.S. Rep. Charlie Dent voiced displeasure Thursday with how the NCAA president responded to a request from the state’s U.S. House delegation that all of the $60 million in Penn State fines in the Jerry Sandusky child molestation scandal be distributed to causes within the state.

The Lehigh Valley congressman said in a statement that Mark Emmert’s response was “unacceptable and unsatisfactory.”

The NCAA president said in a Dec. 12 letter to Dent that a task force charged with developing guidelines for an endowment and hiring a third-party administrator to distribute the funds is to allocate at least 25 percent of the fine money to programs in Pennsylvania.

“By outlining comprehensive plans to address child sexual abuse, of course, agencies within Pennsylvania have an opportunity to significantly increase the initial allocation to the Commonwealth,” Emmert added.

An NCAA spokeswoman on Thursday said the organization stood by Emmert’s correspondence.

According to the university, in-state organizations also are slated to receive the first round of funding from the endowment. The university said it had heard from “a number of organizations and survivors of sexual abuse” with ideas of how funds could be used to benefit children in the state and across the country.

Emmert’s reply didn’t address the delegation’s concerns, Dent said, but “instead chose to hide behind the procedural mechanisms of the NCAA-created Task Force in order to deflect any sort of actual accountability for the disbursement of these funds.”

Of the 10 members on the task force, two are affiliated with Penn State: Nan Crouter, dean of the College of Health and Human Development; and Craig Hillemeier, vice dean for clinical affairs at the College of Medicine. The task force chairman is Timothy White, chancellor of the University of California-Riverside.

Dent said directing funds to entities outside Pennsylvania runs contrary to its taxpayers’ interests.

“I am greatly disappointed by Dr. Emmert’s response and will continue to press for greater accountability and oversight of the NCAA on this and other matters,” he said.

The state’s congressional delegation, in their Nov. 30 letter, noted that Sandusky’s accusers were all Pennsylvania residents and all the “substantiated reports of abuse took place within the (c)ommonwealth.” They urged that all fine money be dedicated to prevention and assistance programs within the state.

The NCAA, the governing body for college athletics, issued the fine as part of sanctions over the school’s handling of the Sandusky matter.

University President Rodney Erickson agreed to the penalties in July. He said it was a difficult process but the university was left with little choice if it wanted to avoid a shutdown of its football program.

It’s one of several tough decisions Erickson has made since replacing Graham Spanier, who left under pressure days after Sandusky’s November 2011 arrest. Trustees chairwoman Karen Peetz cited Erickson’s “tremendous job” leading the university through the last year when it was announced this week he has received a raise of $85,000 to $600,000, or a 16 percent bump.

Gov. Tom Corbett, a trustee by virtue of his office, said he was a “little surprised” about Erickson’s raise and thought the timing was “inappropriate.”

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