On January 16, 2015, lawyers from the NCAA reached an agreement to remove all sanctions it placed on Penn State for the Jerry Sandusky child-sex abuse scandal, which implicated prominent university officials in a cover-up of Sandusky’s crimes.
The complete termination of sanctions came as a surprise. The NCAA had in September 2014 agreed to reduce some of the penalties, like lifting the football program’s postseason ban, but kept in place a financial fine and the deletion of more than 100 wins under coach Joe Paterno.
There was never much dispute that Penn State had to take some responsibility for what had happened on its campus, and for the actions of Paterno and President, Graham Spanier. At the time, observers championed the NCAA’s strong action against Penn State.
So how did Penn State get off less than three years after a serial child-rapist coach was convicted?
The answers lie in a series of court cases where a plucky law firm took advantage of the NCAA’s arrogance.
The Sandusky Scandal
The Sandusky sex-abuse scandal first exploded in November 2011, and the NCAA was completely unprepared for the gravity of what was required to deal with it. It made frequent public statements decrying the university’s culture of negligence in the period after the allegations first surfaced, but the organization did not launch its own investigation. It chose instead to rely on the findings of The Freeh Report commissioned by the Penn State board of trustees.
It would later emerge that the moment The Freeh Report was published, the NCAA began negotiating with Penn State, looking for an agreement on terms of punishment for the university. Normally, the NCAA’s disciplinary procedure flows through its Committee on Infractions, but it chose to operate differently in the Penn State matter. NCAA executives, especially President Mark Emmert, and the group of college presidents that made up the NCAA executive committee, took a lead role.
It was conveyed to Penn State that this was an extraordinary circumstance, and that the executive committee was considering the “death penalty,” a complete multi-year ban from football, for the program. To avoid this, the university’s best option was to reach an agreement with the NCAA on a punishment.
An agreement, called the Consent Decree, was reached. Penn State was banned from postseason play for four years and docked a large share of its football scholarships. All of the program’s wins between 1998 and 2011 would be vacated, meaning Paterno could no longer claim the wins record for a major college football coach. And the university would pay a $60 million fine, the program’s gross annual income, to go towards programs to prevent child sexual abuse and assist victims.
NCAA Vice President David Berst called the punishment “as severe as any that I can recall.”
Challenging the Fine
State Senator Jake Corman represents the county that’s home to Penn State and is himself a graduate. No fan wanted to see the school sanctioned, but something else bothered Corman—then the chair of the Senate Appropriations Committee—about the punishment.
“Part of the sanctions was a $60 million fine of Penn State, and that money was going to be given to a national foundation that the NCAA was going to set up to deal with issues of child abuse,” Corman told The Daily Beast, “and although I didn’t necessarily have an issue with the amount of the fine or how they were going to spend the money, I did have an issue that Penn State was a public university, funded by the commonwealth, and therefore if there’s any money that’s going to be spent by the university, it’s going to be spent in Pennsylvania.”
He mulled it over with others in state government, including the state treasurer, then placed a call to Matt Haverstick, a Pennsylvania lawyer with plenty of experience representing state government, at a small firm called Conrad O’Brien.
Haverstick thought they had a case, and agreed to take it. He and his colleagues put together a number of state constitutional theories and filed a lawsuit, but failed to get anywhere.
They changed tack. Senator Corman wrote bill that would mandate that state–funded institutions of higher education forced by a “governing organization” to pay penalties would pay those penalties in state. Though it could potentially apply more broadly, there was little doubt about the Endowment Act’s intent: to keep the $60-million fine in Pennsylvania.
When it became law, Haverstick immediately sued to have it enforced against the NCAA’s sanctions, keeping the $60 million in-state. The NCAA countersued, alleging that the law was unconstitutional because it was tailored to one circumstance.
The state court disagreed, upholding the law’s constitutionality and ordering the $60 million to be paid into a fund, set up after the law’s passage, to distribute it throughout Pennsylvania.
The NCAA Gets Arrogant
The NCAA is known to throw as many as 50 lawyers at a case. Conrad O’Brien, Haverstick’s firm, employs about 45 attorneys in total and seldom has more than a few on any case. The NCAA did not expect to lose the first time, and they certainly didn’t think it would happen again.
The NCAA sued again, still alleging the Endowment Act was unconstitutional but this time adding a series of arguments concerning the Consent Decree that it had reached with Penn State—the sanctions agreement the university signed onto in order to avoid the “death penalty.”
The NCAA asserted that the decree was a binding contract negotiated in good faith with Penn State and that it was within the association’s power to make it.
“The NCAA put the validity of the Consent Decree at issue in our case,” Haverstick said.
The court again ruled that the Endowment Act was constitutional, but also stipulated that the NCAA had made the decree a live issue. Now there would be a new trial dedicated expressly to the question of whether the entire agreement that Penn State had signed with the NCAA, and with it the postseason suspensions and lost scholarships and vacated wins, would stand at all.
“A Runaway Train”
The Consent Decree had once appeared iron-clad, but the NCAA’s decision to re-litigate the Endowment Act (and the judge’s latest ruling) opened a flood of documents from the NCAA for Haverstick and his team to sift through in what’s known as “discovery.”
They found a number of telling email exchanges, but none more so than one between Kevin Lennon, NCAA vice president of academic and membership affairs, and Julie Roe Lach, the vice president of enforcement. The emails (PDF), dated July 14th, 2012–around 10 days before the sanctions were announced–discussed a number of issues facing the NCAA as it tried to discipline Penn State without going through the Committee on Infractions as stipulated in its bylaws.
Lennon begins his email by worrying that the “internal group” planning the reaction to Penn State “is a bit of a runaway train right now.”
“I know we are banking on the fact that the school is so embarrassed they will do anything, but I am not sure about that…” He goes on to worry that other NCAA members, or the Big 10 Conference that Penn State is a part of , will object to their course of action, and that they do not have a well-developed rationale for why executives have jurisdiction to act alone in this instance.
Already, it’s clear that NCAA executives aren’t sure they can sanction Penn State in the manner they’re proposing. Regardless, they are convinced that Penn State will have to agree to their terms because it has such a black eye in the wake of the scandal.
Lach says as much.
“I characterized our approach to PSU as a bluff when talking to Mark [Emmert] yesterday afternoon after the call. He basically agreed b/c I think he understands that if we make this an enforcement issue, we may win the immediate battle but lose the war when the [Committee on Infractions] has to rule. I think he is okay with that risk.”
Based on the bylaws, the NCAA had little recourse to punish Penn State outside the procedures of the committee. The top-level executives knew this, and chose to pursue that course of action regardless. Later in the email, Lach indicates she thinks the COI would not uphold the sanctions they are proposing, if it came to that:
“We could make the control argument based on ethical failures by senior leaders and I think it’s reasonable and logical, just not sure the COI…would agree.”
Arguments about “ethical failures” and a lack of institutional control would dominate the statement that accompanied the NCAA’s sanctions announcement on July 23rd.
The Enforcement Initiative
“We learned in discovery that there had been discussions and working groups inside the NCAA for some time before the Sandusky matter,” says Haverstick, “in which NCAA had put together an internal working group to change its sanctions structure.”
The NCAA had been planning for some time to toughen its stance on discipline when the Penn State scandal fell in its lap.
Gene Marsh, a former NCAA official retained by Penn State to serve as a liaison to the organization, reached out to Shep Cooper, the Director of the COI, in early July 2012.
“It is fair that PSU would pay a heavy price,” wrote Marsh, “It is not fair that folks on the NCAA board would try to reform college athletics through one case. It’s starting to feel like that…How many institutions represented on the NCAA board could stand scrutiny on whether athletics is the tail wagging the dog?”
He refers to the NCAA’s line of reasoning that the football program had become too powerful to be held accountable by the university. More importantly, the executives wanted to make an example of Penn State.
“FWIW,” Cooper said, “I agree. However, the new NCAA leadership is very image conscience [sic] and if they conclude that pursuing allegations against PSU would enhance the Association’s standing with the public, then an infractions case could follow. I know that Mark Emmert has made statements to the press indicating that he thinks it could fall into some sort of LOIC case. ‘Shooting road kill’ is an apt analogy.’”
The emails gave Haverstick and his team a good idea of who they wanted to give depositions in preparation for the case. Marsh was one.
“Gene Marsh testified that he was told by the NCAA that NCAA viewed the Consent Decree as, in Marsh’s words, the ‘starter log’ for this new enforcement regime that the NCAA wanted to roll out,” says Haverstick.
The NCAA had found a way to announce that its new era of hard-nosed enforcement had arrived. They would batter Penn State while the whole country was watching.
The Death Penalty
In July of 2012, following the Freeh Report’s findings, a livid NCAA President Mark Emmert contacted Penn State President Rodney Erickson, who had replaced the disgraced Spanier. In a series of phone calls, Emmert attempted to convey the grave danger in which Penn State and its football program lay.
“He said he had read the Freeh Report from beginning to end twice over the weekend, and many of the presidents [on the executive committee] had as well,” said Erickson in his deposition (PDF). “He said that everyone viewed this as the worst scandal ever in sports…He said the presidents want blood. He said they would like to shut your program down for multiple years; never seen them so angry or upset.”
Emmert was referring to the possibility of the “death penalty” for Penn State, and he was eager to demonstrate just how serious he and the presidents were. The case would not go through the usual infractions channel but would be dealt with by the executive board.
“He thought the only way to head this off would be to craft a package of what he said would be very, very severe sanctions; that he might–he emphasized ‘might’–be willing to get the boards to look favorably upon, but that time was of the essence and that confidentiality was of the essence.”
Erickson goes on to say that at no point was it indicated that Penn State had the choice to go the normal disciplinary route, through the Committee on Infractions, where it could at least defend itself before a verdict was made.
The way it was presented, the university would have to agree to a deal with the NCAA executive board—swiftly and confidentially—or risk losing its football program. In the months that followed, Gene Marsh would negotiate the terms of the Consent Decree and President Erickson would sign it on Sunday, July 22.
“We had our backs to the wall on this,” Erickson told the Centre Daily Times, a local paper. He told ESPN that “the alternative was far worse. The [death penalty] was a possibility. I thought it was better to go down this path than face a multi-year penalty.”
That was in the summer of 2012. By the time pre-trial proceedings began next winter, that narrative had begun to crumble. The key witness in this respect was Edward Ray, the chairman of the NCAA executive committee at the time the Consent Decree agreement was reached. (The executive committee was the group of presidents to which Emmert repeatedly referred when detailing to Erickson the imminent threat of a death penalty.)
In a detailed report by USA TODAY analyzing the “death penalty” threats, it’s clear that a multi-year ban from football was never going to happen.
In a deposition, Ray “said talk of the death penalty for Penn State never gathered strong support. Ray said the committee discussed such a severe penalty twice–coming to no consensus the first time and voting against it overwhelmingly four days later.”
“Ray said he could not remember the vote outcome, ‘but if you told me it was 19 to 2, I would believe you.’”
This was the “bluff” NCAA VP for enforcement Julie Roe Lach had discussed with Mark Emmert and in her email to Kevin Lennon. The plan was for Emmert to give Penn State an ultimatum: the Consent Decree or death. Penn State chose to live and fight another day.
A Crumbling Case and A Settlement
One month before a third trial was set to begin, this time with the Consent Decree’s legitimacy at stake, the NCAA came to the table and asked to settle out of court.
The NCAA’s insistence on pressing for the second trial ultimately destroyed its sanctions regime by making the Consent Decree fair game. All the ammo that Penn State needed to kill it was in the NCAA’s emails, which it would’ve never had to give up if it had not chosen to revisit the fight over the Endowment Act. The emails and subsequent depositions revealed NCAA executives violated their own bylaws and negotiated with the university in bad faith.
By September 2014, the NCAA had agreed to lift some of the sanctions. By January 2015, the Consent Decree was thrown out completely. All of Paterno’s wins were restored, along with his record, and the $60 million would stay in Pennsylvania.