SOURCE: Pennsylvania Treasury

Pennsylvania Treasury

September 04, 2013 13:34 ET

Treasurer McCord/Senator Corman Case Against NCAA Will Proceed

Commonwealth Court Overrules Attempt to Dismiss Suit Regarding Penn State Fines

HARRISBURG, PA--(Marketwired - September 04, 2013) - State Treasurer Rob McCord said he was pleased the Pennsylvania Commonwealth Court will permit him and Senator Jake Corman to continue their efforts to ensure that money Penn State University paid in fines will be used in Pennsylvania. The court today overruled the National Collegiate Athletic Association's (NCAA) preliminary objections seeking dismissal of a lawsuit filed by McCord and Corman. The decision means the case will proceed.

"This is only one step, but it is an important victory in our fight to make sure Pennsylvania money is spent to benefit and protect Pennsylvania children," McCord said. "At any time -- but especially when our state's spending on social services is being eviscerated -- we should not cede large sums of public money to the NCAA to spend elsewhere."

In a bipartisan move, McCord and Corman sued the NCAA on March 27, asking that the first installment -- $12 million -- of the $60 million financial penalty imposed on Penn State by the NCAA be turned over to the PA Treasury as required by state law. The NCAA filed preliminary objections seeking to have the lawsuit dismissed. The court heard oral arguments on June 19 and declined to dismiss the McCord-Corman suit.

The lawsuit stems from the child sex abuse conviction of former assistant football coach Jerry Sandusky. The NCAA reached a consent decree with Penn State in 2012 that included a $60 million fine, to be used on child abuse programs. Without legislation and litigation the NCAA would have determined where to spend the $60 million. Pennsylvania then enacted a law earlier this year, sponsored by Corman, requiring that the money benefit programs within the state of Pennsylvania. Penn State is a state-related university that receives taxpayer funds.

That law makes the state treasurer the legal custodian of the penalty money until it is dispersed to child abuse programs.

Among the NCAA's preliminary objections, it challenged the standing of McCord to participate in the case. One significant aspect of the court's ruling today is to reaffirm the treasurer's role as the custodian of the funds under the state statute -- and his right to step in when other parties attempt to divert state money in contradiction to the law.

Of the several legal cases prompted by the Sandusky case, the McCord-Corman suit has advanced the farthest.

"We look forward now to arguing the case before the court. Senator Corman and I have never disputed the intention to spend the money on child abuse prevention and victim assistance. But I know this money should stay in Pennsylvania, and the NCAA should not be exempt from complying with Pennsylvania law," McCord said.

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