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Penn State Trustees Set For Contentious Leadership Election

by Geoff Rushton

When Penn State’s Board of Trustees meets Thursday and Friday at the university’s Wilkes-Barre campus, it will elect a new chair and vice chair of the board — a vote which already has a near certain outcome but is expected to be a subject of much debate among some trustees.

Current vice-chair Ira Lubert is expected to be elected chairman, a move that does not sit well with certain factions.

After the unsealing of numerous documents from Penn State’s legal battle with its insurer, Pennsylvania Manufacturers Association Insurance, over who is responsible for paying the $93 million in settlements with 32 individuals who held the school responsible for alleged abuse by former football assistant coach Jerry Sandusky, questions have emerged about how much vetting was done before settling the claims.

Lubert was chair of the board’s legal subcommittee that approved the settlements.

An expert report for PMA called the settlements “high and in some cases extremely high.” Attorney Eric Anderson, who specializes in settling abuse cases also said, “It appears as though Penn State made little effort, if any, to verify the credibility of the claims of the individuals.”

Kenneth Feinberg, who served as mediator in the settlements along with Michael Rozen, disputes that assessment in an op-ed that appears on StateCollege.com.

“The university insisted on corroboration for each claim,” Feinberg wrote, adding that some claimants could not provide the necessary corroboration or their demands were too high.

Feinberg specifically defends — and praises — Lubert’s role in the process.

“Lubert and his colleagues were hard-nosed negotiators with a great deal of business experience in conducting high-risk negotiations,” Feinberg wrote. “The Legal Subcommittee took an active role in reviewing each claim. The subcommittee understood high-stakes negotiation and brought a critical level of sophistication to the process.”

He called Penn State’s process “a model of how such a dispute resolution process should work.”

After the release of the documents last week, alumni-elected trustee Anthony Lubrano said Lubert should face scrutiny after overseeing the settlements.

“We plan to have some public conversations,” Lubrano told the Philadelphia Inquirer. “What the alumni want more than anything else is openness, transparency, and it seems as if we haven’t had a good-faith effort to do that.”

Another alumni-elected trustee, Barbara Doran, wrote on Facebook, “[T]he board is about to elect a chair and vice chair who were part of the fateful decision-making of 2011 that has ruined our reputation, made life difficult for proud Penn Stare alumni everywhere, and cost us tens of millions of dollars that should have gone to the nearly 50% of Penn State students who are first in their families to go to college and whose finances are generally desperate.”

Lubert is a Penn State alumnus and former Nittany Lion wrestler who served on the board from 1997-2000 and 2007-2013 as a governor’s appointee before returning as a trustee elected by the board to represent business and industry — replacing one-time board chair Karen Peetz, who resigned from the board in January 2015. He is chairman and co-founder of Independence Capital Partners and Lubert Adler Partners, LP.

Penn Staters for Responsible Stewardship (PS4RS), an alumni advocacy group that has sought changes to university governance and endorsed nearly every victorious alumni trustee candidate since 2012, raised another issue — Lubert’s past involvement with Sandusky’s charity for at-risk youth, The Second Mile, which prosecutors at Sandusky’s 2012 trial said he used to find and groom victims.

In a letter sent to the trustees, Gov. Tom Wolf, Auditor General Eugene DePasquale and Solicitor General Bruce Castor, PS4RS said that Lubert was on a regional board of directors for the charity and had a track record of “significant donations to The Second Mile.” The letter added that Lubert’s involvement with The Second Mile was a “clear conflict of interest,” in his serving as the chair the subcommittee overseeing settlements.

The PS4RS message also notes that questions remain about the knowledge of the charity’s board members and staff about Sandusky’s abuse, and that Castor has assigned investigators to examine the now defunct organization. Penn State, meanwhile, filed a legal claim last week seeking a contribution to the settlements from The Second Mile and its insurers. Given Lubert’s involvement with The Second Mile, PS4RS says, he should be disqualified from becoming chair of Penn State’s board.

“Electing a Penn State Board Chairman so closely connected to The Second Mile will certainly NOT move Penn State forward,” the letter stated. “Rather, it will severely set us back and only raise more questions that threaten to even further compromise the integrity of Penn State and its leadership.”
PS4RS recommended supporting Robert Capretto, who was appointed to the board by the governor, as the next chairman.

“Dr. Capretto is eminently qualified, engaged and poised to lead,” the letter read. “Moreover, through his words and actions, he has already demonstrated his ability to unify, not just the Board of Trustees, but the many loyal stakeholders of Penn State.”

Capretto is a Penn State alumnus and a principal at the investment management group Oak Hill Holdings. He was appointed to the board by Wolf in 2015.

The board’s nine alumni-elected trustees would be those most likely to oppose Lubert’s election, but the board consists of 36 voting members and a simple majority is needed for election as chair.

The next chair will be replacing Keith Masser, who served in the role since 2013. The chairman and vice chairman are elected to one-year terms, and they frequently serve in the roles for three years. Masser defeated Lubrano, 25-10, in the chair election last July, while Lubert was voted vice chair over alumni-elected trustee Alice Pope, 24-11.

Mark Dambly, a governor’s appointee and president of Philadelphia-based real estate group Pennrose Properties, is expected to be put forth as candidate for vice-chair. He has been on the board since 2010.

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