Mediation is sought on Penn State fine disbursement

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HARRISBURG -- As a dispute over the NCAA's $60 million fine against Penn State University heads to court, two state officials have asked for mediation to resolve whether the association or a subsequently passed state law dictates how the money is disbursed.

In a letter to the chief clerk of Commonwealth Court, an attorney for state Sen. Jake Corman, R-Centre, and Treasurer Rob McCord said they believe it would be in the public interest to avoid lengthy litigation over control of the money. A preliminary hearing in the case is scheduled Wednesday.

The NCAA issued its sanctions in July, one month after former Penn State assistant football coach Jerry Sandusky was convicted of sexual abuse of children. Among the penalties was the $60 million fine -- approximately one year's gross football revenue -- to be placed into an endowment to fund programs for child sexual abuse victims nationwide.

State legislators objected to the NCAA's plan to distribute the proceeds nationwide, and a bill restricting proceeds to Pennsylvania programs sailed through the state Senate and House and was signed into law by Gov. Tom Corbett.

The NCAA promptly filed a lawsuit to block the law, arguing it was an attempt by the state to negate a contract, disrupt interstate commerce and confiscate money due abuse victims across the nation.

Earlier this week, an attorney for Penn State wrote to the NCAA and state officials asking that the parties settle their disagreement. The attorney, Frank T. Guadagnino, noted that an initial $12 million payment remains in a university account while officials await instructions. He wrote that the conflicting requirements of the NCAA sanctions and the new law could put the university at risk of claims it had violated either.

An attorney for the NCAA responded that the association recognizes the university's position and has not demanded payment.

Attorney Everett C. Johnson Jr. answered the suggestion that the parties reach an agreement by saying the state law makes that impossible.

"But for the Endowment Act and litigation initiated by Pennsylvania officials, the funds would already be benefiting the victims," he wrote.

In a letter dated Thursday, Matthew Haverstick, an attorney for Corman and McCord, said the two officials sympathize with the concerns raised by Penn State. He went on to say that the NCAA had been dismissive of Penn State's suggestion.

"The NCAA's letter makes plain that absent court involvement, the NCAA does not intend to yield any ground, even if equity and good faith would counsel that action," he wrote.

A spokeswoman said the NCAA had no additional comment.

Sandusky, 69, is serving a 30- to 60-year prison sentence.

Criminal charges are still pending against three top administrators at Penn State, including former president Graham Spanier.

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Karen Langley: klangley@post-gazette.com and 1-717-787-2141.


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