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Freeh Investigation Costs More Than $1 Million; PSU Board PR Approaches $500,000

on February 15, 2012 2:02 PM

Penn State paid the firm of former FBI Director Louis Freeh nearly $1.15 million through Dec. 31.

Associated press-conference and public-relations expenses for Freeh's group reached $283,727 in additional fees covered by the university.

At the same time, in November and December, Penn State tallied almost $500,000 in fees owed to Ketchum Communications, a prominent firm that handled crisis management for the university board.

Those details -- and several others -- are included in an expense breakdown that Penn State released this week, citing financial impacts from the Jerry Sandusky criminal charges and related fallout at the university.

On Monday evening, Penn State launched a new openness website that addresses a variety of often-asked questions about the crisis. Specifically, it reports the university spent, in November and December, just shy of $3.2 million overall on legal fees, consultants and public-relations firms associated with the situation.

A more-specific delineation of the costs shows the Freeh organization, leading a board-initiated investigation at Penn State, accounted for well more than a third of those expenses.

Penn State shared that more-specific overview with StateCollege.com. Among its highlights:

  • Reed Smith, a law firm that provides counsel to the university trustees, billed the university for $506,162 in services in November and December.
  • Those billing Penn State for overall university legal defense and crisis management in those months include Saul Ewing ($172,658), Duane Morris ($65,771) and Lany J. Davis and Associates ($26,354). Total crisis-related legal defense for the university itself in those months is listed at $359,735.
  • In the same period, Penn State has covered $65,842 in fees to Farrell and Reisinger, representing retired Senior Vice President Gary Schultz, and $82,697 in fees to Caroline M. Roberto, representing Athletic Director Tim Curley.

Penn State has said insurance polices are expected to cover the defense of claims against the university, its employees and trustees.

"Legal and other expenses not covered by insurance are expected to be funded from interest revenues with respect to loans made by the university or from additional payments made by the athletic department to the university with respect to the financing of the most recent Beaver Stadium expansion," the university's new openness website reads.

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