Scrutinizing Second Mile board links

In 2006, the charity at the center of the Pennsylvania State University sex-abuse scandal chose a firm run by its board chairman to construct its new $11.5 million home - on a site bought from the college on the cheap.

At the time, Robert Poole - a 17-year veteran of the organization and president of Poole Anderson Construction - described the Second Mile Center for Excellence as a monument to its namesake charity and to the man whose vision made it possible: former Penn State football coach Jerry Sandusky.

Few thought much about the land deal or Poole's selection as contractor then. But now - three weeks after Sandusky's arrest on child-molestation charges - those relationships have drawn new scrutiny.

As criminal and independent investigators seek to explain how Sandusky could elude detection for so long, they have zeroed in on the business ties between the Second Mile, its own board members, and the university exemplified at the Center for Excellence deal.

At their best, those strong social and financial links helped the board turn the charity Sandusky founded in 1977 into the most dominant nonprofit for at-risk youth in central Pennsylvania.

At worst, analysts fear, they may have blurred the lines of personal responsibility, putting top leaders in positions where their strong ties to the university and the Sandusky brand prevented them from acting as independent governors.

And now, those same ties may force the Second Mile to close its doors.

Since Sandusky's arrest, donors and board members have fled from the organization, its president, Jack Raykovitz, has resigned amid questions about what he knew and when, and plaintiffs' attorneys are seeking court orders barring the charity from disbursing its assets before the plaintiffs get a chance to sue.

"Jerry Sandusky was the face of the Second Mile," said former Philadelphia District Attorney Lynne M. Abraham, whom the Second Mile has hired to conduct an internal investigation. "If it weren't for his association with Penn State football and his very close association with Joe Paterno, this might not have happened."

She may as well have been talking about the organization itself.

From its start, the Second Mile made no secret of its close ties to the university. Sandusky - then the defensive coordinator under legendary head football coach Joe Paterno - purposefully drew upon the wide network of Nittany Lions fans and coaching staff to help get the program off the ground.

Over the years, those ties only grew stronger. Paterno often served as master of ceremonies at the charity's annual golf fund-raisers and sent his players to the Second Mile for internship opportunities.

Thanks in large part to those ties, Second Mile's total worth ballooned from $1 million to $9 million during the last decade - allowing the charity today to reach more than 100,000 children annually across the state through leadership and football camps, foster-family support, and one-on-one mentoring.

And the organization's board members have historically been among top donors to the charity and Penn State.

Second Mile board member Dorothy "Dottie" Huck is married to longtime Penn State trustee Lloyd Huck, former board chairman of Merck & Co. Inc. Together, the couple in recent years have donated more than $20 million to the university and $21,000 to Sandusky's charity.

Cliff Benson, chief development officer of the Buffalo Sabres hockey team, helped arrange the single largest donation in Penn State's history last year when he persuaded team owner and alumnus Terry Pegula to give $88 million to build an arena on campus.

(Benson recently had references to his role with the Second Mile removed from his biography on the team's website, though he is still a member of the charity's board.)

Second Mile board member Linda Gall heads Penn State for the Future, one of the university's many fund-raising campaigns.

The relationship flowed both ways.

Several Second Mile board members received lucrative contracts from Penn State, including Michael Fiore - a managing partner at Leonard S. Fiore Construction in State College. He took in $28 million from the university in 2008 and 2009 for building projects, including new research and arts centers and renovations to the campus' library and tennis courts.

The university paid the company owned by board chairman Poole an additional $25 million during the last two years to renovate campus buildings and to construct a new softball stadium.

In some respects, that overlap shouldn't come as a surprise, given the dominance of Penn State in Happy Valley, said Eric Fraint, president of Your Part-Time Controller, a Cherry Hill firm that provides financial services to nonprofits. In a community of 84,000, there are only so many people with the financial resources for such largesse or with the public profile to appeal to a charity as a board member.

"This nonprofit was the place to be seen, the place to get involved, the place to donate around Penn State," he said. "Certain charities tend to take on this aura of being the organization of choice in a given community."

Laura Otten - director of the Non-Profit Center at La Salle University - believes those ties should have raised questions from the start.

While the Second Mile has maintained that it had no knowledge of any allegations against Sandusky until 2008, the grand jury report suggests that some within the charity may have known about them a decade earlier.

"If you're serving two interrelated, similar masters, it's not necessarily true that what's good for one is good for the other," she said. "It just makes the waters far messier than they should be."

No better example of those commingling interests exists than the Center for Excellence project, a now-scuttled plan to build a 45,000-square-foot structure complete with classrooms, dormitories, and athletic fields.

Sandusky dreamed up the idea five years before he retired from the organization in 2010.

He helped organize the deal in 2002 that allowed the Second Mile to purchase the land it would be built upon - a 45-acre tract of undeveloped farmland in neighboring Patton Township.

According to land records, the charity bought the parcel from Penn State in 2002 for $168,500 - about $15,000 less than the university paid for it three years earlier.

But other transactions suggest the property was worth thousands more. The previous owner - Pittsburgh probate lawyer Mark Bookman - paid $320,000 when he bought it in 1990. Two decades later, an independent real estate assessor valued it at $2.5 million in documents used to secure funding for the building project.

Sandusky and Penn State also played a significant role in raising money for construction.

The charity touted its relationship to the university in applications that sought - and later secured - separate $3 million grants from the county government and the Corbett administration. (Both grants have been placed on hold after Sandusky's arrest.)

How the Second Mile decided to award the center's construction contract to Poole, its board chairman, remains unclear.

He did not return numerous calls for comment. Representatives of his company - Poole Anderson - said they were not authorized to discuss the deal. And sometime within the last month, the company removed the project from its website.

Second Mile chief executive David Woodle also declined to talk about the Poole Anderson contract in detail, saying only: "There was a competitive bid done."

Even so, said Otten, a charity awarding such a large contract to a member of its own board gives the appearance of a conflict of interest.

"If the college and the charity are so central to your business," she said, "it's going to impair your judgment on how you're going to handle a situation in which their interests diverge."