Penn State asks parties to settle dispute

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An attorney for Penn State University sent a letter Tuesday to the NCAA and various state officials requesting that the parties settle their disagreement over how the first installment of the school's $60 million fine stemming from the Jerry Sandusky child sexual abuse scandal is allocated.

In the four-page letter from attorney Frank T. Guadagnino, he notes that the initial $12 million disbursement from the National Collegiate Athletic Association's sanctions remains in a university account while officials await instructions for where it should be sent.

A spokesman for the governor's office of general counsel said they had received the letter and are reviewing it.

The university entered into a consent decree with the NCAA in July accepting a variety of sanctions as a result of violations stemming from fallout of the Sandusky criminal charges. Among the penalties was a $60 million fine to be divided over five years to fund programs for child sexual abuse victims nationwide.

Lawmakers in Pennsylvania objected to the notion that the money would be spent outside the commonwealth and in February, Gov. Tom Corbett signed a law, passed overwhelmingly in both the House and Senate, that the fine be kept in-state.

The NCAA promptly filed a lawsuit to block the law, arguing that it was an attempt by the state to negate a contract between Penn State and the organization.

Mr. Corbett filed his own lawsuit against the NCAA alleging that the sanctions issued violated federal antitrust laws. That complaint was tossed out of court last week, saying the governor did not have standing to file it, and it was not grounded in law.

Mr. Guadagnino noted in his letter that the NCAA has said it will not ask for the payment until the matter between itself and the state is resolved.

He wrote that Penn State "has no desire" to become a party in any of the pending litigation regarding the sanctions. "While we understand and appreciate your respective positions, your dispute over the use of the proceeds of the fine puts the university between the proverbial rock and a hard place, it is not in the best interests of the university to be drawn into litigation in which it is not a party, takes no legal position and has no financial interest in the outcome."

The attorney wrote that he believes it would be in the best interest of all parties if the litigants would reach an agreement for custody of the $12 million and asks that the university not be placed in the middle of the dispute.

"We note that a settlement of the dispute would permit the funds to be used for their intended purpose in an expeditious manner," the letter said. "This will benefit the child services organizations and the victims of child sexual abuse who are intended to benefit from the endowment."

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Paula Reed Ward: pward@post-gazette.com or 412-263-2620. First Published June 12, 2013 2:30 PM


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