Penn State trustees change bylaws despite transparency concerns

When seven of Penn State’s alumni-elected trustees won a lawsuit against the university, an appeals court ordered their legal fees to be paid.

That can’t happen anymore.

On Friday, the university’s trustees passed the bylaw changes that specifically spell out that trustees cannot be reimbursed for legal fees if they sue the institution.

The change passed with 21 “yes” votes, 12 “no” votes and two abstentions. The nine alumni-elected trustees were joined in voting “no” by three gubernatorial appointees: Robert Cappretto, Daniel Delligatti and Elliott Weinstein. State Secretary of Conservation of Natural Resources Cynthia Dunn and Secretary of Education Pedro Rivera abstained.

The vote came after lengthy debate on the measure and whether or not to table it. It came with strong feelings on both sides.

Michael Hoeschele, Jr., the new student trustee, heatedly pushed to drop lawsuits and “focus more on affordability.” That prompted an equally tinged response from alumni-elected trustee Jay Paterno, who responded, “With all due respect, I don’t want to be lectured to.”

Paterno was not one of the seven trustees who sued for access to the source documents for the Freeh report, the commissioned investigation into the Jerry Sandusky child sex abuse scandal that named his father, longtime football coach Joe Paterno as culpable. He has, however, been a party to two other lawsuits that involved the university in the wake of his father’s firing and later death and his own dismissal from the football program when a new head coach was hired. He was elected trustee this year.

On Wednesday, Pennsylvania’s Auditor General Eugene DePasquale attacked the move on grounds of transparency, saying it would “further hamper input from all but the most leading members of the board.” State Sen. John Yudichak echoed his sentiments on Thursday.

A motion to table for more discussion was defeated 20 to 13 with two abstentions.

“To me, what we are trying to do is what good governance and good public policy dictate,” said trustee Julie Anna Potts, adding that her vote would not change after more discussion.

Several trustees brought up the “American rule,” a legal provision that holds that parties to a lawsuit pay their own fees.

Trustee Ted Brown, one of the trustees who sued, pointed out the numerous times the university has paid attorney fees, including the $93 million paid to 32 claimants in the Sandusky scandal, saying the rule change creates a situation where anyone can sue the university and have their fees paid except a trustee.

Penn State put out a statement on the bylaw change, stressing that there were no transparency issues and the motive was consistent with “best practices nationwide.”

“To be clear, this is not about access to information. Trustees have received all of the information they have requested. The board of trustees should be spending its time together working on the educational mission that matters most to Pennsylvanians. The board works well together when it remains focused on education, research and service,” the statement read.

This story was originally published November 10, 2017 at 5:09 PM with the headline "Penn State trustees change bylaws despite transparency concerns."