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Penn State Files Countersuit Against Spanier

by Geoff Rushton

Penn State has filed a countersuit against former President Graham Spanier, claiming he breached his employment contract and fiduciary duties and misled the university about the extent of his knowledge about the child sexual abuse investigation of Jerry Sandusky.

The university made the filing on Monday, along with its response to Spanier’s amended complaint in his own breach of contract suit against Penn State. The university wants back the money and benefits it has paid Spanier since a 2011 separation agreement, as well as legal fees and interest.

Spanier was forced out as president in November 2011 following the charges against Sandusky and against former administrators Gary Schultz and Tim Curley for their alleged handling and testimony about the 2001 incident reported by former football assistant Mike McQueary of seeing Sandusky with a boy in a locker room shower.

Sandusky was convicted on 45 counts of child sexual abuse and is serving a 30-60 year sentence. He is currently appealing. McQueary has been awarded more than $12 million in his lawsuit against Penn State for its treatment of him after he was revealed as the witness in the 2001 incident.

Lebanon County Judge Robert Eby, who is specially presiding in the Spanier-Penn State case, tossed most of Spanier’s claims against Penn State in October, but Spanier was allowed to file an amended complaint. Spanier claims Penn State violated a non-disparagement clause in his separation agreement, failed to reimburse him for legal fees and other expenses, and failed to provide administrative support once he moved to a faculty position.

The separation agreement provided Spanier with 18 months salary, a $1.2 million retirement plan equivalency payment, a $700,000 payment during a one-year sabbatical, five years as a tenured faculty member at a salary of $600,000 a year and contributions to a retirement annuity. It also included the non-disparagement clause.

“In connection with the negotiation of the separation agreement in November 2011, Dr. Spanier did not disclose the full state of his knowledge of allegations and investigations involving Sandusky, nor were those facts otherwise known to the university at that time,” Penn State’s filing stated. “To the contrary, Dr. Spanier used his knowledge of those matters to the university’s detriment and his own advantage in negotiating the terms of his separation.”

Penn State attorneys pointed to emails discovered in 2012 during Louis Freeh’s university-commissioned investigation that indicated Spanier was aware of the 2001 incident, as well as a 1998 complaint about Sandusky that was investigated by police but which prosecutors declined to pursue. Spanier testified at the McQueary trial that he does not recall ever having seen an email about the 1998 complaint. He was copied at the end of a string of emails that said the matter had been resolved and Spanier said he was traveling overseas when the email was sent.

The 2001 emails showed agreement among Spanier, Schultz and Curley to report the incident to leadership of Sandusky’s Second Mile charity and confront Sandusky, but not to take the matter to law enforcement or child welfare authorities. All three contend they were never told McQueary had witnessed anything sexual.

Spanier was charged in 2012 and along with Curley and Schultz awaits trial on misdemeanor charges of child endangerment and failure to report suspected child abuse. Felony charges of perjury, conspiracy and obstruction were quashed earlier this year.

The university says Spanier breached his 2010 employment agreement which required that he “act with the utmost good faith, loyalty and devotion to the interests of the university and at all times and under all circumstances to disclose to Penn State all facts material to the university’s decision-making.”

Spanier, the school says, was obliged before and during the negotiation of his separation agreement to disclose everything he knew about the investigation into Sandusky. Penn State would not have entered into the agreement had it known that Spanier had not fully disclosed all he knew, the filing states.

“At no time prior to entering the separation agreement did Dr. Spanier provide the university with the information described in the 2012 discovered emails or the full state of his knowledge about the 1998 and 2001 incidents,” university attorneys wrote. “Penn State would have terminated Dr. Spanier on different terms had it been aware of the information Dr. Spanier failed to disclose to it.”

Because of his alleged breach of contractual and fiduciary duties and failure to disclose pertinent information, Penn State says “it would be unjust and inequitable,” for Spanier to retain any of the benefits he has received under his 2010 employment agreement and 2011 separation agreement.

Spanier’s lawyer Tom Clare told the Associated Press that the university countersuit is “a last-ditch effort by Penn State to escape liability for its multiple clear breaches” of contract. He added that it is “outrageous” that Penn State “would treat one of its longest-serving presidents this way, and we look forward to showing how ridiculous these claims are as the case progresses.”

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