In January 2011,
Joe Paterno learned prosecutors were investigating his longtime assistant coach
Jerry Sandusky for sexually assaulting young boys. Soon, Mr. Paterno had testified before a grand jury, and the rough outlines of what would become a giant scandal had been published in a local newspaper.
That same month, Mr. Paterno, the football coach at Penn State, began negotiating with his superiors to amend his contract, with the timing something of a surprise because the contract was not set to expire until the end of 2012, according to university documents and people with knowledge of the discussions. By August, Mr. Paterno and the university’s president, both of whom were by then embroiled in the Sandusky investigation, had reached an agreement.
Mr.
Paterno was to be paid $3 million at the end of the 2011 season if he agreed it would be his last. Interest-free loans totaling $350,000 that the university had made to Mr. Paterno over the years would be forgiven as part of the retirement package.
He would also have the use of the university’s private plane and a luxury box at Beaver Stadium for him and his family to use over the next 25 years.
The university’s full board of trustees was kept in the dark about the arrangement until November, when Mr. Sandusky was arrested and the contract arrangements, along with so much else at Penn State, were upended. Mr. Paterno was fired, two of the university’s top officials were indicted in connection with the scandal, and the trustees, who held Mr. Paterno’s financial fate in their hands, came under verbal assault from the coach’s angry supporters.
Board members who raised questions about whether the university ought to go forward with the payments were quickly shut down, according to two people with direct knowledge of the negotiations.
In the end, the board of trustees — bombarded with hate mail and threatened with a defamation lawsuit by Mr. Paterno’s family — gave the family virtually everything it wanted, with a package worth roughly $5.5 million.
Documents show that the board even tossed in some extras that the family demanded, like the use of specialized hydrotherapy massage equipment for Mr. Paterno’s wife at the university’s Lasch Building, where Mr. Sandusky had molested a number of his victims..........
During a conference call, one board member worried aloud that failure to make good on what was owed to the Paterno estate could lead to another “reign of terror” by Mr. Paterno’s supporters, according to a person who was on the call.
With rumblings that the Paterno family was thinking of suing the board of trustees for defamation, the board dispatched its lawyer to negotiate the final payments. All the board wanted in return was a release protecting the university from such a lawsuit.
The Paternos refused. Mr. Sollers said in his statement that “the retention of their legal rights in a case of this magnitude and complexity is customary and appropriate.”
