State College,  PA & Burlington, VT-  In the latest example of financial incest involving PSU, The Second Mile, and a bevy of double-dipping board members and executives, we arrive at the first discovery between an accused suspect in the case and his principal interest in an insurance company that recently paid out a settlement to an alleged victim of Jerry Sandusky.  As the filing has likely been sealed as a condition of it’s settlement, it is unknown if Schultz or anyone else within PSU in addition to Sandusky was named in the civil action.

Gary C. Schultz, interim Sr. VP for Finance and Business returned  following  previous retirement from PSU this past July.

His return to the PSU payroll  around the time that a grand jury was meeting about his possible complicity, FOLLOWING his own alleged perjurious testimony begs the question-As Schultz knew he was under investigation as well as Sandusky and Curley-

Did Schultz come out of retirement in anticipation of  incurring significant legal fees he did not want coming out of his own pocket?

-Record Scratch-

You read that correctly.

Mr. Schultz, who along with Tim Curley were bound over for trial at their preliminary hearing on perjury charges and a misdemeanor failure to report summons last month,  is being provided legal representation costs through Nittany Insurance Company, where he is a paid Director.  According to Acting President Erickson,  it will also be used to cover any civil settlements and judgements in the Sandusky debacle et al.

This would seem to be in violation of the Vermont Captive Insurance Regulations Section 12, or conflict of interest.

In a letter sent to Penn State Interim President Rodney Erickson,  Senator Michael Stack (D) Philadelphia,  expressed his concern that taxpayers and donors should not be footing the bill for the Universities necessary legal representation for the various civil and criminal issues  and potential settlements.

In a response to Senator Stack,  President Erickson assured him that such costs would be accommodated by it’s liability insurance.  Nittany Insurance Company  is listed as the professional liability insurance company of record on the PSU site as well as the provider for PSU students in programs including the Hershey Medical Center.

President Erickson did not reference Mr. Schultz’s directorship position within Nittany Insurance Company although www.blinkoncrime.com was able to confirm with the Vermont Secretary of State that as of this afternoon, there are no pending changes to its registration.

Gary Schultz’s co-director at Nittany Insurance Company, is Allan Anderson,  Former VP and Chief Executive Officer for Hershey Medical Center.

While the captive insurance firm is self-administered, as Director,  Schultz would be in a position to review,  award, accept, negotiate or reject settlements within the framework of their contract with PSU and appropriate regulatory requirements.   Captive insurance companies are often developed as part of a risk mitigation strategy and as an entree to the reinsurance market for payouts exceeding a fixed amount.  Registered in Vermont, Nittany Insurance Company was formed in 1993.

It would seem a good starting point for questions on the regulatory  and compliance matter might be how the bid is/was awarded for initial self-administered liability coverage directed by a potential party and what the premiums, which are deductible to PSU,  were and  are?

What adjustments to same have been made in relation to the known incidents and corresponding dates alleged against Sandusky, Curley and Schultz?

What else is Nittany Insurance funding it may have had ample heads up about?

Does Schultz have a poster of Ken Lay in the top of his humidor?  Bernie Madoff?

www.blinkoncrime.com poster erose contributed to the research of this article.

An Open Letter to Penn State University President Rodney Erickson

With much respect -Do what I say, and do it today.

Hire the best Public Relations firm in the country for PSU’s needs.   I am redacting that recommendation for the publication of this open letter, but it is included in my email to you.  Don’t spend the time or manpower to run through the approved vendor lists and bid it out- not that kind of gig.  The Board of Trustees can WebEx if necessary and this is the kind of emergency proxy was invented for.

Once retained, have the agency facilitate meetings through their agents with Bill Parcells and Bill Cowher immediately.  Specify no leaks to the press until after they occur and by mutual agreement.   Cowher may be the low hanging fruit on this one,  he is returning to CBS next year.

If neither is interested in a head coach commitment of an 8-1 Big Ten team, follow their recommendations about who to contact next and ask them; beg if necessary, if they would be willing to consider a consulting gig for the recruitment process.  Urban Myer is a fine coach and leader, but regardless of who PSU ultimately chooses, efforts to rebuild the PSU brand must start with a nationally recognizable face of a trusted and respected winner, like yesterday.

Champions attract champions and without that, it is like asking collegiate coaching candidates to walk into the lion’s den (pun intended) wearing a raw steak necklace.  You will not even get one to tour Lasche, trust me on this.

This strategy would likely also include a public facing spokesperson effort, and worth every penny if that is all you can get a commitment for from either coach.

Pay them to sit in the lobby.  Pay them to ride the elevator a few times, but get them on grounds.  Pay them to have a motivational meeting with the team.

If you have some strong players they could attach to quickly and produce an  “I remember when I was a young fig on the tree” memory synapses, it couldn’t hurt.

Instruct all team members never to roll the eyes should the phrase “When I was your age we played ball with pads made of glass and never wore cleats in the snow”;  if they told me that I would believe it.

This is the kind of benchmarking that will revitalize wilting spirits of a young athlete, and the parents with the trembling hand over the eject button.

Half the free world is digging old milk cartons out of the recyclables to see if they recognize any kids they may have seen with Sandusky or on the sidelines of a game- they need a new visual association.

As you already know, if you are lucky enough to get this far, they will advise you to release every staffer from the interim athletic director to the water boys that were ever part of Paterno’s camp or rolled up his pants before the game. Do it.

This might be a good time to allow a try before they buy scenario if either are willing, as “guest coaches” to finish the season.

While I am at it, I might suggest a reality miniseries of the process- I know some folks from HBO familiar with the Hard Knocks of football, I would be glad to make a connection.

Donate those proceeds to Coach Parcells or Coach Cowher’s disadvantaged children’s charity of choice which is vetted in advance by a specially appointed member chosen by the new Ethics officer.

Point is, you need immediate public support and that will require immediate damage control or your Titanic does not even have the measly lifeboat option.

The public perception is that there is more to this horror movie after the commercial, and the commercials are disappearing as well.

Your job is to employ the resources that can change the channel when the public is not looking, and forget what they were watching in favor of the new programming, which includes sponsors aligned with that audience.

It is about as transparent of a plan as I can offer- with hope and promise to the innocent victims of this tragedy.