How Penn State decided to pay $93 million to Sandusky victims

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"This was a very intense and difficult mediation," said Kenneth Feinberg, the prominent mediator who also managed the 9/11 victims-compensation fund and the settlements with those affected by the 2010 BP Gulf oil spill.

How did Pennsylvania State University decide to hand out nearly $93 million to more than 30 of Jerry Sandusky's accusers?

The process spanned months, involved lawyers and mediators and hinged on much more than the merits of the claims, said Kenneth Feinberg, a lawyer who mediated the settlements on Penn State's behalf, along with his law partner, Michael Rozen.

"This was a very intense and difficult mediation," said Feinberg, the mediator who also managed the 9/11 victims-compensation fund and the settlements with those affected by the 2010 BP Gulf oil spill.

His comments came in an interview arranged last week by Penn State as a Philadelphia judge prepared to release settlement records sought by media outlets. Those filings became public early Tuesday.

Feinberg declined to comment on individual cases, sticking largely to discussing the process. But he did say all of the accusers with whom Penn State settled had some kind of evidence backing up their claims.

The victims either produced records of reporting the abuse to officials or to a doctor or were witnesses in the former assistant football coach's trial and deemed credible by the state attorney general's office, he said.

But an expert hired by the insurance company raised doubts about Penn State's vetting process and the "extremely high" amounts that it chose to pay accusers.

"It appears as though Penn State made little effort, if any, to verify the credibility of the claims of the individuals," Eric N. Anderson, a lawyer who has handled cases of sexual-abuse allegations, said in an expert witness testimony report released with the documents Tuesday.

Feinberg said more than the merits of an allegation was considered in determining a case's settlement value.

One factor was: "Will Penn State be able to defend the case in court?" Another was the quality of the accuser's lawyer and the court where the case was to be heard, he said.

Rozen, Feinberg's law partner, has previously cited the severity of the abuse, location, time, and the accuser's credibility also as factors. He described three areas of claims: those from before 1998, when the first report of abuse by Sandusky was investigated and dismissed; those between 1998 and the 2001 incident in which former graduate assistant Michael McQueary said he reported seeing Sandusky assault a boy in the shower; and those after McQueary said he alerted Penn State administrators.

Assaults before 1998 were assigned the lowest value because of little if any evidence that Penn State should have known at that time, Rozen said.

The mediators hardly ever met with the actual victims, Feinberg said. He and Rozen met with their lawyers, then met with Penn State lawyers to update them on progress.

"This mediation process was done almost entirely between lawyers," Feinberg said.

Penn State's board of trustees gave members on its legal subcommittee authority to oversee the process and apprise the rest of the board.

Feinberg said he met with the subcommittee in Philadelphia and gave them details on individual cases. He said settlement values of individual cases were discussed, as well as demands.

It took months to resolve some cases. The point of contention, he said, typically was the amount - not whether abuse had occurred.

About a half-dozen cases were not settled either because the claims appeared to be "fraudulent" or an amount could not be agreed upon, Feinberg said. One case is still pending in the Philadelphia Court of Common Pleas.

The first multimillion-dollar settlement was announced in August 2013, that of a 25-year-old man who said that he was a child when Sandusky abused him in a campus shower. Two months later, Penn State said it would pay nearly $60 million to resolve claims with him and 25 other Sandusky accusers. In April 2015, the university approved more settlements, with one trustee calling the payout "an extraordinary" sum.

ssnyder@phillynews.com

215-854-4693 @ssnyderinq

www.philly.com/campusinq

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