Jerry Sandusky scandal costs nearing $47 million for Penn State

mdawson@centredaily.comJuly 18, 2013 

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Penn State’s costs for the Jerry Sandusky scandal keep climbing, as the university said Thursday the bill for lawyers, consultants and other work stands at more than $46.8 million.

ABBY DREY — CDT file photo Buy Photo

Penn State’s costs for the Jerry Sandusky scandal keep climbing, as the university said Thursday the bill for lawyers, consultants and other work stands at more than $46.8 million.

The latest tally of $46,854,256 represents work by more than three-dozen firms that invoiced the university between November 2011 and this past April 30.

When factoring in the dollar value of the total settlement offers with Sandusky claimants and the full NCAA fine, the potential cost skyrockets to $154.8 million.

The university has been providing monthly updates on the costs, and the latest report shows the cost increased $972,352 in April. The previous update reported a $45.9 million price tag through the end of March.

The largest chunk of the $972,352 came from law firms retained by the university to handle its own defenses, such as Saul Ewing, McQuaide Blasko and Feinberg Rozen. That was $382,450.

To date, Penn State has been billed $10.1 million for legal defense services.

The latest update shows Penn State was invoiced $322,073 by firms doing legal and communications work for the board of trustees, such as Daniel J. Edelman Inc. The cumulative total is $6.5 million.

During that period, former FBI director Louis Freeh’s law firm billed Penn State $10,288, nudging the total bill for the Freeh report to $8,169,371.

Penn State also was billed $115,019 by the firm of former U.S. Sen. George Mitchell, whom the NCAA assigned to serve as the university’s athletics integrity monitor. Mitchell is expected to issue a quarterly report at the end of August.

The most significant chunk of the scandal bill is the $12 million fine the university is to pay the NCAA. The university has put that amount into an escrow account and is waiting to make the payment until two civil lawsuits related to it are resolved.

The overall price tag will increase significantly once Penn State pays to settle claims with the 30 or so men who claim they were abused by Sandusky. Their lawyers have been negotiating with the firm Feinberg Rozen, and the university’s board of trustees authorized last week settlement offers to some of the claimants.

Penn State trustee Ted Brown confirmed the amount authorized for payment was $60 million.

Penn State still has $48 million to pay toward the NCAA fine. The next payment is due at the end of the year, and that money is being paid by the athletic department through a university loan.

Penn State President Rodney Erickson has said the university has insurance policies that will cover some of the costs, but others, such as the crisis communications, will be paid out of pocket.

Penn State’s liability insurer, Pennsylvania Manufacturers’ Association Insurance Co., sued the university to get out of paying the settlements to the Sandusky abuse claimants. The university counter-sued, alleging a breach of contract.

The amount paid to the former employees’ lawyers will only increase, too, as the lawyers had been litigating a number of issues and have a preliminary hearing scheduled later this month in Harrisburg.

Mike Dawson can be reached at 231-4616. Follow him on Twitter @MikeDawsonCDT.

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