Whenever clients tell me they just don't see the need to invest in a crisis management strategy ahead of potential scandals or even as the scandal is unfolding- I will remind them of this story from Reuters about the expense of digging oneself up and out of a hole inaction and poor decision making created.
PHILADELPHIA (Reuters) - The Penn State child sex abuse scandal has so far cost the university $3.2 million including the expenses of an investigation, legal and public relations advice, the school said on a new website designed to promote transparency.
No tuition, state grants or donations will be used to pay the steep bills that Penn State racked up in the months since former assistant football coach Jerry Sandusky, 68, was charged in November as a serial child molester, the university pledged.
The expenses were posted on a new website, openness.psu.edu, that went live this week.
Among the more eye opening revelations is the salary information that reinforces football's prominent role on campus, blamed by some for the school's failure to report 2002 allegations about Sandusky to police, allowing the allegedly predatory behavior to continue for years.
Website figures show new football coach Bill O'Brien will make $2.3 million in salary and other payments, more than four times what new president Rodney Erickson is due at $515,000.
The national football powerhouse is still reeling from the grand jury indictment in November of Sandusky, who has been charged with 52 counts of sex abuse involving 10 boys. He has denied the charges and maintained his innocence.
The scandal took down legendary football coach Joe Paterno and then University President Graham Spanier, both of whom were fired, and led to the arrests of two high-ranking university officials accused of lying to a grand jury that indicted Sandusky. Paterno, 85, the winningest coach in college football, died in January of lung cancer.
The website, operated by the university, says Penn State paid $3.2 million to investigators, lawyers and PR specialists deployed in the wake of the grand jury indictment. Those costs will be covered by insurance, interest earnings or from athletic department payments to the university for a Beaver Stadium expansion, according to the website.
Included in the breakdown of the scandal-related expenses was $1.1 million paid through December 31 for a special investigation headed by former FBI director Louis Freeh and an additional $283,000 for public relations help from Freeh.
The university Board of Trustees, which has been under fire from alumni for firing Paterno in a phone call, also spent near $500,000 for crisis management advice.
In addition, one of the state's biggest law firms, Reed Smith, was listed as receiving just over $500,000.
"This is a reminder of the commitment to open communications to the fullest extent possible," said Penn state president Rodney Erickson in a statement about the site.
Disgruntled alumni, galvanized by their anger over Paterno's abrupt firing, were less than enthusiastic about the site.
"I think transparency can't be solved with a branded site called openness," Maribeth Roman Schmidt, spokeswoman for Penn Staters for Responsible Stewardship, with roughly 5,500 members, told Reuters on Tuesday.
"I think all of the information on there is extremely controlled and it smacks of back room review and approval, which is exactly what we are trying to get away from," she said.
(Editing By Barbara Goldberg and Greg McCune)