State Treasurer Rob McCord today asked a federal court to refrain from considering the National Collegiate Athletic Association’s (NCAA) lawsuit challenging control of Penn State University sanction funds until related pending state and federal court proceedings are resolved. McCord also signaled his intention to defend vigorously the state legislature’s attempt to spend those funds on sex abuse victim and prevention programs within Pennsylvania.

McCord is among several defendants in the NCAA’s suit, due to his role as custodian of an endowment fund created by state legislation enacted last month. The law, sponsored by state Senator Jake Corman, required all payments from a consent decree between Penn State and the NCAA to be deposited into a special fund under the Treasurer’s control. The penalties resulted from the Jerry Sandusky child molestation case.

“Any diversion of money from the endowment, no matter how temporary, represents lost investment earnings on behalf of state taxpayers,” McCord said. “I plan to defend my obligation to carry out my responsibilities in legal proceedings, as necessary.”

As custodian of the endowment fund, the state Treasurer has a fiduciary responsibility to protect and ensure its safekeeping.

Prior to both the enactment of Corman’s legislation and to the NCAA’s complaint in U.S. Court (Middle District of Pennsylvania), Corman and other members of the legislature had filed a petition in Pennsylvania Commonwealth Court to prevent the NCAA from spending the sanction money on programs outside the state.

McCord said whatever the appropriate penalties may be against Penn State for its handling of the Sandusky matter, it is improper for an entity such as the NCAA to assume authority over spending by a school that receives Pennsylvania taxpayer support.

“The commonwealth has an absolute right to regulate the operation of state-supported, state-regulated institutions of higher education,” McCord said. “The NCAA is an association of collegiate athletic programs; it has no right to compel state-related universities to disburse non-athletic funds at its own sole discretion. The NCAA has grossly overstepped its authority.”

McCord filed a Motion to Dismiss, asking the Middle District court to abstain from considering the NCAA suit until related litigation Corman and his legislative colleagues originated, as well as the Governor’s antitrust action, is resolved. In addition to contending the NCAA is using its federal lawsuit as a shortcut to pre-empt the state from taking action to oversee the distribution of the endowment fund, McCord also argues in favor of a general legal tenet that a federal court not involve itself in a case until necessary.

Along with McCord, the other defendants in the NCAA’s federal suit are Governor Tom Corbett, Auditor General Eugene DePasquale, and Chairman of the Pennsylvania Commission on Crime and Delinquency Mark Zimmer. The NCAA claims the legislation, by directing all consent decree payments into a fund under the custodial control of the Treasurer, violated the Commerce Clause of the U.S. Constitution. The NCAA claims the consent decree is a private contract between itself and one of its member schools.

The Corman legislation and the consent decree both direct sanction funds to be spent for sexual abuse victims and prevention programs. The legislation stipulates that the spending be on programs within the state.

The consent decree imposed a variety of financial and non-financial penalties on the university for its handling of reports about the actions of Sandusky, a former assistant football coach who was eventually convicted for child molestation.

The following is a statement issued by Penn State University in response to an investigation released Sunday by the family of Joe Paterno:

“In November 2011, the Penn State Board of Trustees appointed former FBI director and federal Judge Louis Freeh to conduct an independent investigation of the University’s response to the allegations of sexual abuse committed by former Penn State assistant coach Jerry Sandusky. The goal of this investigation was to uncover facts and identify where failures occurred in the University’s governance and compliance structure and to make recommendations to help ensure that such failures never happen again. This was an internal investigation into Penn State’s response to the allegations.

It was not within the scope of Judge Freeh’s engagement to review the actions, motives or functions of entities outside of our University community. This was an internal investigation into Penn State’s response to the allegations, and that is how the University has utilized the report.

As a result of the investigation, 119 recommendations were made to Penn State in areas such as safety and governance. To date, the University has implemented a majority of those recommendations, which are helping to make the University stronger and more accountable. The University intends to implement substantially all of the Freeh recommendations by the end of 2013.

It is understandable and appreciated that people will draw their own conclusions and opinions from the facts uncovered in the Freeh report.”

Former FBI director Louis J. Freeh issued a statement after hearing the Paterno family’s report on ESPN, “Outside the Lines.”  Their investigation targeted nearly every conclusion the Freeh report made about Joe Paterno in the wake of the Jerry Sandusky child sex abuse scandal.

The Paterno family  calls the Freeh report “factually wrong, speculative and fundamentally flawed.”

Freeh fired back, calling the Paterno family investigation “self-serving” and that it does not change the facts established in the Freeh Report, according to a statement appearing on ESPN.com.

Freeh goes on to say that he stands by his conclusion –”that four of the most powerful people at Penn State failed to protect against a child sexual predator harming children for over a decade”.

To read Freeh’s full statement, click here

The Paterno family is striking back at the Freeh report by releasing a their own findings  titled “Critique of the Freeh Report: The Rush to Injustice Regarding Joe Paterno.”

In July, the Freeh report concluded the Penn State coach had placed the football team above the safety of children who were preyed upon by former assistant coach Jerry Sandusky.  After the damning 267-page report came out, the Paterno family hired a Washington, D.C., law firm and a team of other high-level experts, including former Attorney General Dick Thornburgh to challenge the conclusion by former FBI director Louis Freeh.

Sandusky was sentenced last year to 30 to 60 years in prison after he was convicted of 45 criminal counts of sexually abusing young boys.

Joe Paterno died at the age of 85 on Jan. 22, 2012 after being diagnosed with lung cancer.

Some of the major finding’s of the Paterno family report include:

• The allegation is false that Joe Paterno participated in a conspiracy to cover up Sandusky’s actions because of a fear of bad publicity or for any other reason.

• There is no evidence to support the allegation that the football culture at Penn State was somehow to blame for Sandusky’s crimes. Former Attorney General Dick Thornburgh says that including such a claim, with no factual basis to support it, undermines the credibility of the entire report.

• Freeh’s failure to conduct interviews with most of the key witnesses is a glaring deficiency. In the 1998 incident, for example, Freeh’s investigators failed to interview at least 14 of the most important witnesses, including Curley, Schultz, the District Attorney’s office, the Department of Public Welfare and the University’s police department or its outside legal counsel. This pattern was repeated in the 2001 review. Having never talked with these individuals, the Freeh report still claimed to know what they did and why they did it.

• Freeh investigators did not have subpoena power, and no one testified under oath. Worse, witnesses were allowed to speak anonymously, something that would never happen in a legitimate legal proceeding.

• The conspiracy claim made by the Freeh report based on a string of three emails falls apart under scrutiny. Because of a technology switch in 2004, most of the Penn State emails for the time in question are not accessible. Moreover, there are no emails authored by Joe Paterno and none that he received. In fact, the emails referenced by the Freeh report show that Joe Paterno knew few details about Sandusky, that he acted in good faith and that he did what he thought was right based on what he knew at the time.

• The validity and thoroughness of the Freeh report was oversold to the public, leading to the report being accepted in full and without review by The Board of Trustees and the NCAA.

The Paterno family’s response to the Freeh report was officially released to the public at 9 a.m.  on ESPN, “Outside the Lines”

A  synopsis of the Paterno family report can be found by clicking here.

To read the full Paterno family report click here.

The full Freeh report can be found here.