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Penn State settles with abuse victims for $59.7 million

October 28, 2013 at 12:00 AM EDT
Penn State has struck a nearly $60 million settlement with 26 young men over alleged abuse by former assistant football coach Jerry Sandusky. Gwen Ifill talks to Charlie Thompson of The Patriot-News in Harrisburg, Pa., for more on how this settlement compares to similar cases and what factors led to the premium payout.
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TRANSCRIPT

GWEN IFILL: Now we turn to the Penn State settlement announced earlier today. It comes nearly two years after former assistant coach Jerry Sandusky was first charged and later convicted of child sexual abuse.

Charlie Thompson, a reporter at The Patriot-News in Harrisburg, has been covering the story, and he joins me now.

Thanks for joining us.

So this settlement, nearly $60 million, has been unfolding over time, I gather, not just all at once today.

CHARLES THOMPSON, The Patriot-News: Actually, in the summer, the board of trustees authorized a pot of about $60 million to pay off the claimants that they had — that the mediators working for the university had been able to reach agreements with.

And that process, the process of getting to tentative agreements, had been playing out for the better part of a year.

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GWEN IFILL: We’re talking about 26 people who settled, out of how many who had a claim, and is that a lot of money in this kind of case?

CHARLES THOMPSON: The 26 that they settled with here were out of an initial pool of 32 people who had raised claims of being abused by Jerry Sandusky as youths.

Three of those were found to be non-credible. And, in the other cases, they just hadn’t been able to reach a meeting of minds on what was fair. So those cases are proceeding. At least two of them have active civil court cases going right now. As to the 26 that have settled, $60 million, you know, when you average that out across the 26, it does appear that Penn State is paying a premium to get out from under these cases. But there are some reasons for that.

GWEN IFILL: And what is the — what are the reasons for the premium?

(CROSSTALK)

CHARLES THOMPSON: First of all, as a practical matter, I mean, when we say that it appears that they’re paying a premium, that’s based on some analysis that we have done at the paper comparing this settlement with other large, 25-or-more claimant sexual abuse cases.

And most of those are in the realm of the Roman Catholic Church scandals. So, if you use those — and I think there’s some — you know, it’s not completely apples to apples, but, on the other hand, they — that’s an institutional entity that’s trying to get out from under, in many cases, multiple claims of abuse.

Penn State’s an institution that’s trying to get out from multiple claims of abuse. So there is some relevance there. In the church cases, I think the largest of those large group settlements came in at about $825,000 per claimant. Penn State’s is going to come out to about $1.4 million on average after attorneys’ fees are taken out.

GWEN IFILL: Now, what…

CHARLES THOMPSON: And the reasons — the reasons for that are that the churches often were threatening to petition for bankruptcy or had, in fact, petitioned for bankruptcy. Penn State is rather well-heeled.

Many of the church claimants are not represented by attorneys individually. In the Penn State case, every claimant had an attorney. And, finally, you know, Penn State is very adamant about trying to sort of reclaim its good name in this process and make this as — do what they can to sort of help these victims emerge from this on the other side with, you know, a feeling like Penn State has tried to do right by them.

GWEN IFILL: You say that Penn State is rather well-heeled. Where is this money going to come from?

CHARLES THOMPSON: Penn State hopes that eventually the money will come from insurance coverages that it has bought and paid for over the years.

But, as a practical matter, some of the insurers are pushing back against that notion. They want nothing to do with covering for Jerry Sandusky’s actions. So, immediately, Penn State’s paying the settlements out of pocket. And they are drawing that money from money that the university gets in repayment of loans that it has made over time to, you know, the athletic department, for example, to finance expansions…

GWEN IFILL: Right.

CHARLES THOMPSON: … to Beaver Stadium or loans to the Milton S. Hershey Medical School in Hershey.

GWEN IFILL: Right.

CHARLES THOMPSON: And they have a — they have a lot of pockets of money that they can draw the money from.

GWEN IFILL: Today was other $60 million shoe that dropped. And we will see what happens next.

Charlie Thompson of The Patriot-News in Harrisburg, thanks so much.

CHARLES THOMPSON: Sure thing.