Board of Trustees

Penn State sets aside second $12 million payment toward $60 million NCAA fine from Sandusky case

Penn State has made good on its second payment toward the $60 million fine imposed by the NCAA for the Jerry Sandusky scandal.

Penn State spokesman David La Torre said that $12 million has been set aside in a separate account. Altogether, Penn State has set aside $24 million of the $60 million fine and has three payments to go.

According to the consent decree the university signed with the NCAA, the money is supposed to be put into an endowment to fund child abuse awareness progress. However, the NCAA has not moved forward with setting up the endowment because of a lawsuit challenging how that money will be spent.

State Sen. Jake Corman, R-Benner Township, sued the NCAA to keep the organization from spending the money outside Pennsylvania. The consent decree said that a quarter of the fine money would be spent within Pennsylvania, but Corman has said the money is from Penn State and should be spent in the state.

The lawsuit is being litigated in the Commonwealth Court.

The fine money is one of the targets of another lawsuit, the one brought by the family of late Penn State football coach Joe Paterno and several university trustees, former players and coaches.

Their lawsuit asks a jury to void the fine and the other sanctions that include scholarship reductions, a bowl ban and the deletion of 111 wins from 1998 to 2011. A judge brought in from Potter County to preside over the suit ruled Tuesday that several of the claims can proceed to the discovery phase, which was a decision the Paterno family said was a “significant victory.”

The first installment of the loan, set aside in December 2012, was paid by the athletic department using money from the university’s reserves. The loan was to be paid back over 30 years at a 4 percent interest rate.

The $24 million is one of the largest chunks of money the university has spent in handling or responding to the fallout of the Sandusky scandal.

The university agreed to pay $59.7 million to settle claims with 26 men who said they were abused by Sandusky, and the university has spent about $51.8 million on legal fees and consultants.

All told, that’s $135.5 million that the Sandusky case has cost Penn State.