Penn State Pays Up—and Will Likely Pay Up Again

The university has agreed pay out $60 million to 26 men to settle sexual abuse claims against Jerry Sandusky. But it’s not over. Diane Dimond reports on the new cases waiting to drop.

It came as no surprise when Penn State made the announcement that its board of trustees has settled legal claims involving 26 young men—all determined to have been victims of sexual abuse at the hands of former assistant football coach Jerry Sandusky.

Still, the sheer size of the settlement package was shocking: $59.7 million. Do the math and it comes out to more than $2.3 million per victim. What’s more, The Daily Beast has learned that there are more new cases yet to be filed.

Sandusky was found guilty of 45 criminal counts related to sexual abuse of minors in June 2012. He is planning to appeal.

Revealing the result of year-long negotiations, university president Rodney Erickson issued a statement that seemed tinged with a note of finality. “We hope this is another step forward in the healing process for those hurt by Mr. Sandusky, and another step forward for Penn State,” he said. “We cannot undo what has been done, but we can and must do everything possible to learn from this and ensure it never happens again at Penn State.”

The school acknowledges that it had been presented with a total of 32 complaints from males who claimed that as children they were sexually assaulted on the PSU campus by Sandusky. Twenty three deals are now fully signed and complete; three other cases have reached agreement-in-principal, according to the university.

That leaves six known claims still unresolved—allegations which could go to trial. It also leaves uncounted the cases of Slade McLaughlin, an attorney who represented the young man referred to as Victim No. 1 during Sandusky’s criminal trial. McLaughlin tells The Daily Beast that he and his associates “have signed up three new cases within the past month,” and he is certain there are more victims yet to come forward.

“‎These 26 victims are only the tip of the iceberg of the lives that Sandusky has ruined,” McLaughlin said, and he plans to make Penn State pay even more. “No amount of money can give these young men back what they have lost. The degradation and humiliation to which they have been subjected will cast a dark shadow over their entire lives.”

Also left unsaid is the fate of Sandusky’s most high-profile alleged victim: his adopted son Matt, now 34, who stunned court watchers during jury deliberations last June when he instructed his lawyers to announce that as a boy he, too, had been sexually abused by the once respected coach.

Matt has legally changed his last name from Sandusky and could not be located for comment. Repeated calls and e-mails to his Philadelphia-based lawyers went unanswered for hours until a spokesman replied only: “We are not likely to have a comment.” It was reported in August that Matt’s claim against Penn State was about to be finalized. In all of these settlements confidentiality is required.

Lawyer Tom Kline, representing victim No. 5, was the first to reach what was reported to be a “multimillion dollar settlement” with Penn State back in August. Kline agrees the university’s troubles aren’t over yet.

“Penn State has one more significant thing to get through and a couple of sideshows,” Kline said in a telephone interview from his office in Philadelphia.

“The significant thing is the upcoming Curley/Spanier/Schultz trial,” he said referring to PSU’s former athletic director Tim Curley, former president Graham Spanier and former senior vice president Gary Schultz, who supervised the campus police department. The trio faces criminal charges of perjury, child endangerment, obstruction of justice and failure to report allegations against Sandusky to law enforcement. Their combined trial is expected to begin next year, perhaps in the spring; all have pleaded not guilty.

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The two sideshows PSU must still confront, according to Kline, are the remaining NCAA sanctions against the university which include another $60 million in fines, and the legal fight launched by the family of late head coach Joe Paterno against the same sanctions, which vacated 13 years of the patriarch’s PSU football wins.

And, of course, Penn State will have to re-live the trauma of the entire scandal when Sandusky’s appeal reaches the court. Upon his conviction the 69-year-old was sentenced to between 30 and 60 years in state prison.

Asked if the multi-million dollar payout package to young men could hurt Sandusky’s chance at winning an appeal, his former lawyer, Karl Rominger, told The Daily Beast, “If a new trial were awarded the fact is the [PSU] payments would not be evidentiary except for use against those testifying.” In other words, the prosecution couldn’t bring it up, but Sandusky’s defense lawyer could use it against his accusers.

Despite the combined $120 million Penn State is thus far obligated to pay out in connection with the Sandusky sex scandal—$60 million to the 26 young men and $60 million to the NCAA—attorney Kline says there’s one important thing to remember. In every negotiation, he said, “Penn State [lawyers] maintained the right to get money back from both their insurers—plural—and from the Second Mile,” Sandusky’s now defunct children’s charity.

“My prediction,” said Kline, “Is that they will get significant money back.”