Bloomberg News

Assistant Coach’s Charity May Not Survive Scandal, Official Says

November 25, 2011

Nov. 15 (Bloomberg) -- Second Mile, the foundation for needy children started by former Penn State University assistant football coach Jerry Sandusky, may not survive the scandal over charges that he molested eight boys, the charity’s vice chairman said.

Discussions about Second Mile’s future will take place with donors and other supporters in the next few weeks, said Dave Woodle, vice chairman of Second Mile’s board of directors, who assumed responsibility for day-to-day operations after Chief Executive Officer Jack Raykovitz resigned yesterday.

“It would be erroneous to say it’s not in doubt,” Woodle said yesterday in an interview at the Second Mile office. “This has had a major impact, and that’s why we want to take some time and talk to all those involved and don’t go to a hasty decision.”

Woodle’s comments followed the firings last week of Penn State football coach Joe Paterno and university President Graham B. Spanier after Sandusky, 67, was charged with sexually assaulting boys in locations that include the university’s athletic complex.

“It was within the Second Mile program that Sandusky found his victims,” a grand-jury report said. “Through the Second Mile, Sandusky had access to hundreds of boys, many of whom were vulnerable due to their social situations.”

Former District Attorney

The Second Mile board is turning to Lynne Abraham, the former district attorney of Philadelphia and a partner in Haddonfield, New Jersey-based law firm Archer & Greiner, to oversee an internal investigation into questions involving Sandusky and the charity, Woodle said. The board hopes to have its findings and recommendations finished by the end of the year, it said in a statement yesterday.

“The allegations that were made, and assuming the outcome is true, are beyond disgusting to this organization,” said Woodle, 56.

Second Mile, which Sandusky founded in 1977, serves children with physical, emotional and academic needs and is “committed to helping young people achieve their potential as individuals and as community members,” according to its website.

In an interview yesterday with Bob Costas of NBC News’ “Rock Center” program, Sandusky admitted to showering and “horsing around” with young boys but said he isn’t a pedophile and denied the charges against him.

Sandusky Interview

“I say that I am innocent of those charges,” Sandusky said. “I could say that I have done some of those things. I have horsed around with kids. I have showered after workouts. I have hugged them and I have touched their legs without intent of sexual contact.” Sandusky is free on $100,000 bond.

Woodle said he hopes programs at the charity that have public support can continue.

“I think the programs are survivable because we have had overwhelming support of people saying, ‘You’ve got to figure out how to keep these programs going,’” he said.

Katherine Genovese, Raykovitz’s wife and an executive vice president of Second Mile, remains on the staff, Woodle said. Asked whether there was consideration given to whether she should stay after her husband left, Woodle said that would be part of the internal investigation.

Raykovitz made $132,923 and Genovese was paid $100,580, according to the group’s 2009 non-profit tax filing. They were Second Mile’s two highest-paid staff members, the filing shows. Genovese was unavailable for comment, and Raykovitz declined to comment beyond his statement.

Contact in Showers

The grand-jury report says foundation officials became aware of contact between Sandusky and boys in Penn State’s football showers in 1998 and again in 2002.

Second Mile’s assets more than tripled from 2002 through 2009, according to Internal Revenue Service filings. It had revenue of $2.7 million and net assets of $9 million, according to its 2010 annual report.

Sandusky was its “primary fundraiser,” the grand-jury report said.

“That wasn’t a term that we would use at the time, to my recollection,” Woodle said. “But he did meet with individuals that would provide contributions, yes. He provided an interface for the organization. I don’t think that was a secret.”

In March 2002, a Penn State graduate assistant saw Sandusky having anal sex with a boy in the shower at the football team’s headquarters, according to a grand-jury report released Nov. 5 by the Pennsylvania Attorney General’s office. The assistant told Athletic Director Tim Curley about the incident, according to the report. Caroline Roberto, an attorney for Curley, didn’t return a phone call.

‘Inappropriate Conduct’

Curley later testified to the grand jury that the assistant had described “inappropriate conduct” and denied the assistant reported “anything of a sexual nature,” the report said. Curley said he told Second Mile’s Raykovitz about the matter.

A statement on the organization’s website said university officials told Raykovitz that someone reported being “uncomfortable about seeing Jerry Sandusky in the locker room shower with a youth” and that the foundation wasn’t made aware “of the very serious allegations contained in the grand-jury report.”

Curley, 57, has been charged with perjury. The grand jury said Curley’s testimony that he hadn’t been told Sandusky was molesting the boy is contradicted by the evidence.

Sandusky continues to collect his pension from the university as he faces 40 counts of child sex-abuse charges, Pamela Hile, a spokeswoman for the Pennsylvania State Employees’ Retirement System, said in an e-mail.

Pension Payments

Sandusky received a payment of $148,271 when he retired from Penn State, and his pension is $58,898 a year, Hile said. Former university vice president Gary Schultz, who is charged with perjury in the case, took a $421,847 payment in 2009 and gets $27,558 a month, or almost $331,000 a year, she said. Schultz’s lawyer, Tom Farrell, didn’t return a phone call.

Pennsylvania Governor Tom Corbett told reporters Nov. 10 that the state will look into Second Mile’s response to allegations against Sandusky.

“I need to know what the charity, what the board members, knew,” the governor said.

Penn State sold land for construction of a new learning center to Second Mile in 2002, documents show.

The foundation bought 41 acres in Patton Township, Pennsylvania, for $168,500 from Penn State, according to documents submitted to the state as part of the charity’s application for a $3 million grant.

Second Mile’s 46,000-square foot (4,270-square meter) center is slated to be built on about 60 acres (24 hectares) next to the University Park Airport in State College.

Buying Land

The charity bought 20 acres for $64,000 in March 1981 from Winston Corp., county records show. The group consolidated the property with land purchased from Penn State to secure construction financing, according to documents submitted as part of its grant application. The two pieces were appraised for more than $400,000 each in 2009, the documents show.

Building the center had been a goal of Sandusky’s and the focus of fundraising efforts in 2007 and 2008, according to columns Sandusky wrote in Second Mile’s Milestones newsletters. Sandusky envisioned a building with a multipurpose room, locker rooms, classrooms and a dormitory space for overnight accommodations, said his column in the charity’s summer 2007 newsletter.

“The Center for Excellence will provide a year-round facility and campus that will serve as a home for many of our programs,” Sandusky said in the newsletter.

Construction Contract

The charity awarded the contract for construction of the new learning facility to Robert Poole, chairman of its state board of directors. Poole owns State College, Pennsylvania-based Poole Anderson Construction. Poole didn’t return phone calls seeking comment.

State authorities yesterday held up the $3 million grant from Pennsylvania’s Redevelopment Assistance Capital Program for the learning-center project.

“It’s currently suspended, pending further review,” said Eric Shirk, a spokesman for Corbett.

The governor’s office approved the grant in July. None of the money has been spent, Shirk said.

Board Members

Second Mile, which removed the names of board members from its web site on Nov. 11, has several supporters with high- profile ties to Penn State. Former PSU President Bryce Jordan was listed as a member of the charity’s honorary board. Former Penn State spokesman Steve Hevner was described as a member of one of the group’s regional boards. Dorothy Huck, the wife of Penn State emeritus board trustee Lloyd Huck, also sits on the charity’s state board of directors.

Penn State’s Huck Institutes of the Life Sciences is named after the couple for their donations, which have exceeded $40 million, according to the university.

It isn’t unusual in a town such as State College for there to be close connections between community groups and the university, Woodle said.

“It is difficult in this community to operate without interfacing with the university,” he said.

The Hucks didn’t return phone calls seeking comment on their ties to the charity. Hevner declined to comment.

“They picked up my name when I was president,” Jordan said in a phone interview. “I would guess I gave them permission to do so when I was there but I’ve had no affiliation with them.”

Ties to Charity

Bill Mahon, the vice president of university relations at Penn State, said in an interview Nov. 11 he didn’t know the specifics surrounding the land sale to Second Mile. Asked whether there are concerns about the university’s ties to the charity given the allegations, Mahon replied, “It’s on our list of the 100 things we need to pay attention to here in the next couple of weeks.”

The charity’s former lawyer, Wendell Courtney, who was once counsel for the university, said last week that he resigned Nov. 7. In an interview, Courtney said he quit as Second Mile’s attorney to avoid potential conflicts of interest because, as the university’s lawyer, he had dealings with Curley and Schultz.

Courtney disputed the assertion in the grand-jury report that he served as counsel to Second Mile, as well as to Penn State, during a 1998 investigation of Sandusky involving minor boys in the football showers. Courtney said he didn’t begin serving as the Second Mile’s lawyer until early 2009.

A spokesman for state Attorney General Linda Kelly said she stands behind the report.

“I’m not going to debate the grand jury presentment with anyone,” spokesman Nils Frederiksen said in a phone interview. “The presentment is drafted at the direction of the grand jury. They decided the language based on the evidence and the testimony.”

--With assistance from Romy Varghese in Philadelphia. Editors: Jeffrey Taylor, Anne Reifenberg

To contact the reporters on this story: Mark Niquette in Columbus at mniquette@bloomberg.net; Sophia Pearson in Philadelphia at spearson3@bloomberg.net; Andrew Zajac in Washington at azajac@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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