PSU Ethics and Compliance "Complete and Accurate" Reply to Hotline Complaint

[B_Levinson]

When I brought this to Regis Becker's attention, he said that Penn State responded "accurately and completely" to the hotline report I filed last year. Perhaps I am stupid (although not so stupid as to have not been able to earn a Penn State degree, as well as some other degrees and professional titles), but I am unable to identify any response to the issues of (1) misuse of Penn State communication resources to attack and possibly defame four Trustees and (2) Karen Peetz's unilateral affirmation of the Freeh Report on Penn State's behalf. (I have to post this in two sections.)


Dear Mr. Becker,


I am an alumnus and not an employee, but my own experience in using the compliance hotline supports the perception that Penn State looks the other way when misconduct (by the “right” people) is reported (by the “wrong” people). This would in turn support the perception of retaliation against employees.


Here is what I sent last year:



Your Report # :

1406-PSU-40005

Your Follow-Up Date :

6/30/2014



The issues are:

(1) Possible misuse of University communication resources, and the University's name, by some Trustees to harass, bully, and intimidate other Trustees.

(2) Selective compliance with the Board's Standing Order against individual Trustees, or indeed anything but the entire Board, speaking or acting on behalf of the University. This ties in with the first issue because the communication channels in question are clearly taking direction from a faction of Trustees, but emphatically not from the entire Board.


Here is the rule in question: "Make decisions and instruct the administration collectively as the governing body of the University; it being recognized and understood that unless specifically authorized, no individual Trustee has the authority to act on his or her own on behalf of the University or the Board." http://www.psu.edu/trustees/pdf/standingorders.pdf Order V, Governance of the University. 1(e), "Final Responsibility of the Board"


Here is what I perceive as objective evidence that the rule was violated: http://www.centredaily.com/2013/08/20/3746233/penn-state-board-responds-to-trustees.html


"A spokesman said the leaders of the board have “serious concerns” about Peter Khoury and other trustees, including Anthony Lubrano and Alvin Clemens, who’ve joined the Paterno family’s lawsuit to reverse the NCAA sanctions against Penn State. Board spokesman David La Torre said their action creates a conflict of interest spelled out in the university’s bylaws. "

"…La Torre said the trustees’ filing a lawsuit exceeds their authority and conflicts with Penn State’s official position and interests."

"“Board leadership, with the advice of the legal subcommittee, has serious concerns that the role of the five trustees as plaintiffs in the litigation against the NCAA creates conflicts of interest under the trustees’ conflict of interest policies in the university’s bylaws,” La Torre said. “The complaint itself contains numerous allegations and claims that do not represent positions that the university has taken and conflict with the university’s position and interests.”"


(1) LaTorre is paid by the University, and is therefore a University resource. The same goes for other University communication channels that are making statements of this nature on Penn State's behalf.

(2) The accusation is, in the absence of qualification, false, because the plaintiff Trustees (Lubrano, McCombie, Taliaferro, and Clemens) have nothing to gain personally from the lawsuit's success, although the University to which they owe fiduciary responsibility certainly does. The Commonwealth Court, in fact (opinion of Judge Pellegrini, which he says is shared by the other judges, document issued 4/09/2014), said in effect that the Board was derelict in its fiduciary duty for failing to challenge the sanctions. *

(3) The above statement is false because, noting that the Board of Trustees never voted to affirm the Freeh Report or accept the NCAA sanctions, the University has no position with which the lawsuit can conflict.

(4) LaTorre's statement acknowledges that the Board's leaders, as opposed to the Board as a whole, have the concerns. This means he is speaking on behalf of a Trustee faction, and not on behalf of the Board or the University.

 

[B_Levinson]

This underscores the issue as to whether the Board's Standing Orders against any Trustee acting independently on behalf of the Board or the University applies to all the Trustees, or whether there is an exception for the leaders whom Mr. LaTorre mentioned. I previously sent you a complaint about Michael DiRaimo's release of a letter to the Pennsylvania Senate to the effect that the Board of Trustees opposes SB 1240. (www.wjactv.com/images/Letter_to_Gov_Comm.pdf) This letter was not authorized by a vote by the entire Board, which means that (1) one or more Trustees circumvented President Barron's chain of command by telling Mr. DiRaimo to write it or (2) one or more Trustees told President Barron falsely that the Board had taken a position on the legislation.


There is indeed a question as to whether the Standing Order I cited applies to all the Trustees, or only to some of them. In 2012, Trustees Karen Peetz (in her capacity as Board Chairwoman, and explicitly on behalf of Penn State) and Kenneth Frazier affirmed the findings of the Freeh Report to the effect that Penn State had somehow enabled Jerry Sandusky's crimes against children. Noting that the NCAA used these statements (I am not aware of any other) as an excuse to impose sanctions on Penn State, this arguably caused the University enormous harm. The objective evidence is as follows.


Frazier: "Administrative leaders -- including at the time President Graham Spanier, Coach Joe Paterno, Athletic Director Tim Curley, and Senior Vice President Gary Schultz -- failed to protect children when they had the opportunity and failed to provide adequate information to the board, he said." http://news.psu.edu/story/147986/2012/07/13/university-leaders-answer-questions-freeh-report


Peetz: "The Board of Trustees, as the group that has paramount accountability for overseeing and ensuring the proper functioning and governance of the University, accepts full responsibility for the failures cited in the Freeh Report." http://progress.psu.edu/resource-library/story/a-message-from-bot-chairman-karen-peetz


I doubt strongly that the Board's minutes will show a record of any vote to "accept full responsibility for the failures cited in the Freeh Report," noting especially the following. http://philadelphia.cbslocal.com/20...tees-meets-to-accept-finalize-ncaa-sanctions/

“The board doesn’t do anything official without voting because it’s a corporation,” said Trustee Joel Myers. “We have not accepted the Freeh report.”

"…Lubrano ripped the Freeh report. “The full board never accepted the findings of the Freeh report. With respect to the Freeh report, in fact, its findings are so inconsistent with reality that I find them to be intentionally inflammatory.”"

This brings us back to the same issue raised by the DiRaimo letter to the Pennsylvania Senate. There was no vote by the Board to authorize the statements in question, but statements were nonetheless made on the Board's behalf by individual Trustees. As for the harm caused by these statements, the NCAA's words speak for themselves.

"Because Penn State accepted the Freeh Report factual findings, which the university itself commissioned, the NCAA determined traditional investigative proceedings would be redundant and unnecessary." http://collegefootballtalk.nbcsport...s-fined-postseason-ban-scholarship-reduction/

It may also be noted that neither Mr. Frazier nor Ms. Peetz corrected the NCAA's perception by telling it that they could speak only as individual Trustees, and not on behalf of Penn State, because the Board never accepted the Freeh Report's findings.



* The relevant statement by Judge Pelligrini suggests that the four NCAA plaintiff Trustees are, in fact, doing their fiduciary duty while those who are attacking them did not do their fiduciary duty. http://www.pacourts.us/assets/opinions/Commonwealth/out/1MD13_4-9-14.pdf?cb=1, page 37, labeled DRP-5


"The majority appears to arrive at this outcome because it is bewildered, as I am, by how the Board of Trustees of PSU could have approved or allowed to be executed a “Consent Decree” involving the expenditure of $60 million of PSU funds when the Consent Decree specifically states that the matter “ordinarily would not be actionable by the NCAA.” If, as the majority suggests, the NCAA did not have jurisdiction over conduct because it did not involve the regulation of athletics, then the expenditure of those funds is problematic, given that PSU is a non-profit corporation as well as being tax-exempt as a charitable organization, and that Boards of Directors of non-profit charitable corporations have a fiduciary duty to ensure that funds are only used for matters related to its charitable purpose – in this case, the students of PSU. See 15 Pa. C.S. §5712. Moreover, the majority position is understandable given the lax supervision by those responsible for insuring that non-profit and charitable organizations operate as non-profit and charitable organizations as well as their failure to take action against Boards of Directors and Officers who use funds of a non-profit and/or charitable entity to pay funds that they are not legally obligated to pay and/or expend funds not related to their charitable purpose or who no longer act as a charity."

 

[B_Levinson]

PENN STATE'S RESPONSE. Can somebody show me where it addresses two of the three issues that were raised?


Thank you for your interest in Penn State. A reference to the position of the Board of Trustees is not a reference to the views of each individual board member, but rather the position of the collective Board. It would be impossible to function if all positions taken by the Board reflected unanimous agreement or even formal votes.



Moreover, the broad views of the Board on the subject of governance are clearly evident by its actions. Specifically, the Board has taken on many actions that indicate that the Board has assumed full responsibility for its governance. Most compelling, the Committee on Governance and Long-Range Planning (GLRP) has advanced a public process of self-analysis and reform.


Beginning in 2012, the Trustees began to receive a number of proposals suggesting governance reforms, including reforms to the composition, structure and selection of trustees to the Board. A number of these suggested reforms were adopted and codified at the May 2013 meeting of the Board. Those minutes can be found online at: http://www.psu.edu/trustees/pdf/may2013minutesbot.pdf . Many of the recommendations that remained were more complex and, in some cases, conflicting. They were assigned to the Committee to assess and make recommendations to the full Board. To fulfill this obligation, the Chair of the Committee, Trustee Eckel, proposed to engage the services of an outside consultant to lead the Board in structured conversations about further reform. Chair Eckel reported to the full Board in July 2013 that the Committee would seek to identify a consultant to inform the process of self-analysis and reform.

This selection process led to a special meeting of the Committee on November 15, 2013 (via telephone) in addition to its regular November 21, 2013 meeting. At the full Board meeting on November 22, 2013, Chair Eckel reported that Ms. Holly Gregory had been engaged to help the Board navigate the many options for further reform. With the knowledge of the full Board and without objection, our consultant continues to work with the Committee toward that goal.


The Committee is expected to bring forth proposals for governance reform to the full Board for a formal vote.

Clearly, the actions of the Board of Trustees evidence an expectation that it will collectively take the action, by formal vote, of determining the appropriate size and structure to best serve the interests of the University. From these actions (formal vote on some reform, hiring a consultant to assist in the process of self-analysis and reform, Committee actions including an announced intent to bring formal recommendations to the full Board), it is clear that the Board has indicated that the question of which Board structure is best for Penn State is a question for the Board, not the legislature, to decide.


Michael DiRaimos letter was appropriate in so much as his comments accurately described the situation and are consistent with these on-going concerted efforts of the Board of Trustees.

 

[WeR0206]

I agree Bill. That response is insulting to our intelligence. What a bunch of nonsense. Its as if they think we haven't been following their actions closely the past few years.

 

[Evan Ceg]

Speculating here, but perhaps, Bill, the reason Becker didn't give you a satisfactory reply is because your complaints
a. Are largely a matter of your subjective opinion and motivated inference,
b. Are not actionable, and
c. Are an internal matter for the BoT to deal with. I'm sure the BoT members are all big boys and girls and can deal with these presumed offenses without the help of LTE writers.

I offer the above while also acknowledging that I'm rooting for the Old Guard BoT to be replaced ASAP.

 

[Art]

In case you didn't realize it, Rege Becker, along with a host of other hires whose positions were justified by the Freeh Report, functionally retired as soon as he took his job with PSU. His brain had retired years before.

 

[lionlurker]

Bill, we all know they don't give a shit what you, I, or anybody else thinks. Nothing matters except what Dandrea and Peetz and Surma says matters.

 

[Bushwood CC]

PENN STATE'S RESPONSE. Can somebody show me where it addresses two of the three issues that were raised?


Thank you for your interest in Penn State. A reference to the position of the Board of Trustees is not a reference to the views of each individual board member, but rather the position of the collective Board. It would be impossible to function if all positions taken by the Board reflected unanimous agreement or even formal votes.



Moreover, the broad views of the Board on the subject of governance are clearly evident by its actions. Specifically, the Board has taken on many actions that indicate that the Board has assumed full responsibility for its governance. Most compelling, the Committee on Governance and Long-Range Planning (GLRP) has advanced a public process of self-analysis and reform.


Beginning in 2012, the Trustees began to receive a number of proposals suggesting governance reforms, including reforms to the composition, structure and selection of trustees to the Board. A number of these suggested reforms were adopted and codified at the May 2013 meeting of the Board. Those minutes can be found online at: http://www.psu.edu/trustees/pdf/may2013minutesbot.pdf . Many of the recommendations that remained were more complex and, in some cases, conflicting. They were assigned to the Committee to assess and make recommendations to the full Board. To fulfill this obligation, the Chair of the Committee, Trustee Eckel, proposed to engage the services of an outside consultant to lead the Board in structured conversations about further reform. Chair Eckel reported to the full Board in July 2013 that the Committee would seek to identify a consultant to inform the process of self-analysis and reform.

This selection process led to a special meeting of the Committee on November 15, 2013 (via telephone) in addition to its regular November 21, 2013 meeting. At the full Board meeting on November 22, 2013, Chair Eckel reported that Ms. Holly Gregory had been engaged to help the Board navigate the many options for further reform. With the knowledge of the full Board and without objection, our consultant continues to work with the Committee toward that goal.


The Committee is expected to bring forth proposals for governance reform to the full Board for a formal vote.

Clearly, the actions of the Board of Trustees evidence an expectation that it will collectively take the action, by formal vote, of determining the appropriate size and structure to best serve the interests of the University. From these actions (formal vote on some reform, hiring a consultant to assist in the process of self-analysis and reform, Committee actions including an announced intent to bring formal recommendations to the full Board), it is clear that the Board has indicated that the question of which Board structure is best for Penn State is a question for the Board, not the legislature, to decide.


Michael DiRaimos letter was appropriate in so much as his comments accurately described the situation and are consistent with these on-going concerted efforts of the Board of Trustees.

"....in the process of self-analysis and reform, Committee actions including an announced intent to bring formal recommendations to the full Board), it is clear that the Board has indicated that the question of which Board structure is best for Penn State is a question for the Board, not the legislature, to decide."?????????

It is clear that Board Structure and reform of an out-of-control Executive Committee (a self-imbued group that has hijacked all authority and power of the board creating a multi-class Trustee -- neither of which, an all powerful Executive Committee or multi-class system of Trustee, is even remotely contemplated by the Charter!) is best addressed by the CORRUPT, SELF-DEALING BOARD OF THIEVES, CHARLATANS AND WHORES, not the legislature who is named as the body that CONTROLS THE CHARTER??? According to who other then these shameless, corrupt, hypocritical jackals??? Give me an f'ing break that they now believe that they are not accountable to the Pennsylvania Legislature in contravention of the Charter and they will presume to lecture the Legislature as to who holds ultimate authority of the Charter???

 

[B_Levinson]

Speculating here, but perhaps, Bill, the reason Becker didn't give you a satisfactory reply is because your complaints
a. Are largely a matter of your subjective opinion and motivated inference,
b. Are not actionable, and
c. Are an internal matter for the BoT to deal with. I'm sure the BoT members are all big boys and girls and can deal with these presumed offenses without the help of LTE writers.

I offer the above while also acknowledging that I'm rooting for the Old Guard BoT to be replaced ASAP.

What is subjective about the misuse of Penn State communication resources (worse than stealing a few office supplies, by the way) or Peetz's violation of the Board's Expectations of Membership?

 

[Victor E. Bell]

It would be impossible to function if all positions taken by the Board reflected unanimous agreement or even formal votes.

This part is funny.

 

[Peetz Pool Boy]

Bill,

You keep upstaging yourself. Very well done and keep up the great work. Your degree from PSU and intelligence maks the "hotline manager" look like a doofus, which we all know his is. His existence on PSU's payroll is why the daily pleas from roger and others get tossed directly into my growing circular file.

Why anyone, other than dimwits like CR66, would eagerly donate money to this highly corrupt tax-exempt cesspool is beyond me.

Forget the "it's about the students" crap. Life is a "free market" and the PSU pinheads running my alma mater into the ground either figure out that they can't spend their way to competency...or they don't. My money isn't going to be a contributing source.

If we ever meet, I owe you cocktails of your choice.

 

[chrisrn1965]

Speculating here, but perhaps, Bill, the reason Becker didn't give you a satisfactory reply is because your complaints
a. Are largely a matter of your subjective opinion and motivated inference,
b. Are not actionable, and
c. Are an internal matter for the BoT to deal with. I'm sure the BoT members are all big boys and girls and can deal with these presumed offenses without the help of LTE writers.

I offer the above while also acknowledging that I'm rooting for the Old Guard BoT to be replaced ASAP.

Unless you can show in the minutes where the BOT voted to take a position opposing SB 1240 or affirming the findings of the Freeh report there is nothing subjective about these two issues that Bill raised.