Board of Trustees

Penn State board leaders say trustee participation in Paterno lawsuit against NCAA constitutes a ‘conflict of interest’

Penn State said Tuesday that trustees suing the NCAA are in conflict with the university’s position and interests, and that was the reason for giving the student trustee an ultimatum about withdrawing from the lawsuit.

A spokesman said the leaders of the board have “serious concerns” about Peter Khoury and other trustees, including Anthony Lubrano and Alvin Clemens, who’ve joined the Paterno family’s lawsuit to reverse the NCAA sanctions against Penn State. Board spokesman David La Torre said their action creates a conflict of interest spelled out in the university’s bylaws.

Khoury said Monday he was given the ultimatum of withdrawing from the lawsuit or being removed from the group tasked with selecting the successor to President Rodney Erickson. He said he’s withdrawing so he will not jeopardize his role as the voice of tens of thousands of Penn State students at all campuses on the selection of the next university president. His formal court motion will follow soon, he said.

Khoury’s revelation ignited a fresh round of criticism of the board online and from an alumni group. Khoury said he’d seen “overwhelmingly positive” reactions from students about his position as a plaintiff in the lawsuit.

Penn State, which declined comment Monday, issued a statement Tuesday to the Centre Daily Times saying that Khoury faced a conflict of interest that would have required him to recuse himself from important parts of the selection committee’s search. La Torre said the board’s subcommittee on legal matters weighed in with advice.

“Conflicts of interest require, at a minimum, that the conflicted trustee not participate in any board or committee business that might be affected by the conflict,” La Torre said in the statement. “With respect to trustee Khoury’s service on the presidential selection committee, his personal interests and positions in the litigation would have required that he recuse and absent himself from significant parts of the committee deliberations and candidate interviews.

“In light of these significant limitations on his ability to perform his role as a trustee, trustee Khoury had to make a choice between his personal interests as a plaintiff in litigation and his role as a trustee member of the presidential search committee.”

Khoury, a 23-year-old studying for his master’s in health administration, is one of five trustees who were plaintiffs when the Paterno family’s lawsuit was filed in Centre County in May. Khoury is the only plaintiff who is involved with the presidential search committee.

Fellow trustee plaintiffs Lubrano and Clemens said they were asked to withdraw, but they’re standing pat. The other two trustees who are plaintiffs are Ryan McCombie and Adam Taliaferro.

La Torre said the trustees’ filing a lawsuit exceeds their authority and conflicts with Penn State’s official position and interests.

“Board leadership, with the advice of the legal subcommittee, has serious concerns that the role of the five trustees as plaintiffs in the litigation against the NCAA creates conflicts of interest under the trustees’ conflict of interest policies in the university’s bylaws,” La Torre said. “The complaint itself contains numerous allegations and claims that do not represent positions that the university has taken and conflict with the university’s position and interests.”

La Torre said the board’s officers talked in private with the trustee plaintiffs in the hope of resolving the conflict.

Penn Staters for Responsible Stewardship, an alumni group critical of the board of trustees’ actions in the wake of the Jerry Sandusky scandal, condemned the pushback on Khoury, saying some trustees have “sought to marginalize” those critical of the board’s actions since the Sandusky scandal erupted.

They also questioned the notion of a conflict of interest.

“We understand that this power bloc has claimed that there is a conflict of interest between serving on the board and participating in legal action against the NCAA,” the PS4RS statement said. “However, the Penn State board of trustees never voted to accept the NCAA sanctions, so in fact there can be no conflict.”

The group then went further, stating: “The self-serving actions of the Business and Industry trustees have brought much harm to our university, and today we are asking our elected representatives in Harrisburg to remove these trustees from the board. These trustees arechosen through an ill-defined, opaque process — which they refuse to explain — and they simply do not represent any Penn State stakeholders.

Their actions continue to demonstrate that their concern is protecting their own interests, rather than the interests of Penn State.”