A filing Tuesday in U.S. District Court for the Middle District of Pennsylvania raises the question whether Penn State and the NCAA were ever on the same page as far as the $60 million fine was concerned.
Papers filed by Pennsylvania Treasury Chief Counsel Christopher Craig brought up the issue.
In a memorandum of law supporting Treasurer Rob McCord’s position, Craig submitted examples of emails that showed questions about what would happen with the monetary sanction levied by the NCAA against the university as part of the package of punishments agreed to under the consent decree after the Jerry Sandusky child sex abuse scandal.
In an August 2012 email, the NCAA’s associate director of public and media relations, Stacey Osburn, quotes a news report in which Penn State claimed it would administer the funds to prevent and address child sex abuse.
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Bob Williams, NCAA’s vice president of communications, replied, “Moving forward, we need to frame the $60 million as a part of PSU’s sanctions and they are not administering this fund or establishing the endowment. An independent agency will administer the fund and the money does not go from Penn State to any of the charities directly. PSU will deposit the funds into an account administered by a third party agency.”
So why is the NCAA fighting the Endowment Act? One difference between Williams’ statement and the legislation is the emphasis on keeping the funds in Pennsylvania.
McCord and Pennsylvania Commission on Crime and Delinquency Chairman Mark Zimmer are being sued in federal court by the NCAA to challenge the Endowment Act — state Sen. Jake Corman’s legislation that would establish a dedicated endowment in Pennsylvania for the administration of those funds, making the commonwealth’s treasurer that third party.
The NCAA has fought the constitutionality of the Endowment Act, protesting in state and federal courts, claiming it violates the Pennsylvania and United States constitution provisions on the Contracts Clause, the Dormant Commerce Clause and the Takings Clause. The Commonwealth Court ruled against all of those Oct. 31. A federal case still sits in front of Judge Yvette Kane.
But the issue still leads to questions about a disconnect between Penn State’s vision for what would happen with the money and the NCAA’s plans for it.
In an email exchange with the NCAA on Aug. 21, 2012, Penn State assistant general counsel Frank Guadagnino detailed the divide.
“... The university has a fundamentally different view of how the consent decree should be interpreted with respect to the endowment. We do not share your view that the language of the consent decree gives the NCAA the unilateral authority to establish the endowment, determine its structure and, in essence, do what you appear to be doing with your ‘endowment task force,’ ” he wrote. “It is our firmly held view that if we fund an endowment that meets the criteria set forth in the consent decree, the university will be in full compliance with both the letter and the spirit of the document.”
Penn State and the NCAA are co-defendants in some of the several lawsuits that have arisen post-Sandusky. They are on the same side in the Commonwealth Court case brought by Corman and McCord, but the university is not a party to the federal suit brought by the NCAA.
At this point, Penn State’s position is simple.
“The university is committed to compliance with the consent decree and applicable law,” spokesman David LaTorre said.