Pa. Treasurer joins senator's suit against NCAA over Penn State fine money

By Jon Campisi | Apr 3, 2013

Pennsylvania State Treasurer Rob McCord has joined as a plaintiff in a lawsuit filed by

State Sen. Jake Corman that demands the return of $12 million Penn State University has paid to the NCAA in fines arising out of the Jerry Sandusky child sex-abuse scandal.

McCord’s office announced on March 27 that the treasurer would also be fighting in court to recover the first installment of the total $60 million in fines levied against the university in the wake of the child molestation case.

“Under state law as it currently stands, I have a responsibility to safeguard that money for the citizens of Pennsylvania, who support Penn State with public dollars,” McCord said in a statement. “The behavior that led to the penalties occurred in Pennsylvania, the victims were in Pennsylvania, and the funds should remain in Pennsylvania.”

Sandusky, the former defensive coordinator for the Nittany Lions football team, was convicted on 45 counts of child sex-abuse last summer following a jury trial in Centre County.

Sandusky was subsequently sent to prison for between 30 and 60 years; his lawyers are appealing the conviction.

Meanwhile, the National Collegiate Athletic Association entered into a consent decree with Penn State following the scandal in which the school agreed to abide by the sanctions leveled against it by the association, which, in addition to the fine money, included the taking away of many of the revered football team’s wins.

Earlier this year, Corman, a Republican who represents the area in Centre County that comprises Penn State University, filed suit against the NCAA seeking injunctive relief prohibiting the association from dispersing or otherwise dissipating any of the $12 million in fine money already paid by Penn State under the consent decree.

The senator soon introduced legislation designed to prevent any of the fine money from being used outside of the commonwealth. It was officially known as the Institution of Higher Education Monetary Penalty Endowment Act.

The measure eventually passed the General Assembly and was signed by Gov. Tom Corbett, who is embroiled in his own lawsuit against the NCAA over allegations that the punishments against Penn State violate federal antitrust laws.

That case is currently playing out before a federal judge in Harrisburg.

Meanwhile, the new law that had been drafted by Corman requires the NCAA to place Penn State’s fine money directly into the state’s treasury.

McCord, the state treasurer, said in his statement that no matter how “virtuous” the NCAA’s ultimate plan for the fine money may be, “it cannot achieve those ends by unlawful means. It must comply with state law and turn over the money to the endowment fund.”
In their lawsuit, which was filed in Pennsylvania’s Commonwealth Court, Corman and McCord contend that because the state provides such a large portion of Penn State’s discretionary budget, it is impossible for the NCAA to claim that the university’s penalties are derived entirely from non-commonwealth-sourced funds.

The suit also claims that the NCAA “unilaterally” decided after signing the consent decree with Penn State that it would spend the $60 million penalty mostly outside of Pennsylvania’s borders.
While the NCAA has said it will use the fine money toward child abuse prevention programs, it hasn’t offered specifics to this effect, the lawsuit says.

According to a news release from McCord’s office, Sen. Corman was repeatedly rebuffed in his efforts to meet face-to-face with NCAA President Mark Emmert to discuss the use of the funds and ensure that the money would be applied to appropriate Pennsylvania organizations and programs.

“An NCAA vice president contacted the senator by phone and refused his request for oversight of the funds and repudiated his right to keep the $60 million penalty money in the state,” the press release from McCord’s office states.

“It is apparently the NCAA’s belief that it is not accountable to the elected authorities of this Commonwealth who are responsible for ensuring the appropriate and lawful expenditure of public-generated dollars,” the lawsuit states, according to McCord’s office.

The NCAA, meanwhile, has sought to have the state’s lawsuit dismissed over contentions that the law requiring the fine money to stay in Pennsylvania violates the U.S. Constitution.

“State governments can’t simply pass laws to rewrite private agreements and divert private money to their own coffers,” the NCAA’s chief legal officer, said in a statement back in February when the association filed its own federal suit seeking to have a judge strike down the recently enacted Pennsylvania law.
In March, the NCAA’s legal team filed a motion with Commonwealth Court seeking to have Corman’s lawsuit dismissed, with Remy saying in a March 14 statement that he believes the suit has no merit, and arguing that Corman is not “empowered by law to even bring the case.

“The NCAA’s pending federal court action involves the proper Pennsylvania government officials and will determine whether the Endowment Act is constitutional and imposes any obligations on the NCAA,” Remy had said at the time. “Senator Corman sought to avoid federal court review of the Endowment Act by getting into state court the morning the Governor signed the Endowment Act, but we do not believe this gambit will be successful.”

On March 27, the NCAA responded to Corman’s amended complaint, the one that names McCord as a co-plaintiff, saying in a statement that the ongoing legal wrangling is “delaying victims of child sexual abuse nationwide from receiving needed financial support.

“This time, because the NCAA has made clear that Senator Corman has no right to sue, he joined the State Treasurer as a plaintiff,” the association said in a statement. “In what appears to be a continued game of whack-a-mole, we will yet again ask the court to dismiss his third attempt to state a claim.”

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