Tuesday, November 29, 2011

Louis Freeh, MBNA, and the Penn State Connection Update

Former FBI chief Louis Freeh chosen to lead the Penn State investigation has ties to Second Mile charity's board.
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Update:
Sandusky hires private investigator to study sex-abuse claim


Victim preparing to testify at Jerry Sandusky hearing, attorney says

Victim One has been notified by police that he most likely will have to testify at a preliminary hearing scheduled for mid December in the Jerry Sandusky sex-abuse case.

One of the newly hired Philadelphia-area attorneys now representing the 17-year-old boy -- who was the first to come forward and the last of eight chronological victims outlined in a grand jury presentment against former Penn State assistant football coach Sandusky -- says one of the first tasks as the boy's attorney is making sure that testimony goes as smoothly as possible
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Update: This incestuous community of elitist officials continues to rearrange the deck furniture.  Now, in addition to the PSU whitewash investigation, Freeh has been appointed to probe the MF Global Collapse.

It's common knowledge that Freeh is go-to guy when it comes to events that need covering up.  In 2000, Bloomberg Businessweek published an article The Case against Louis Freeh detailing how the former FBI Director at the time, "bungled investigations of high-profile criminal cases and repeatedly misled probers and judges in legal proceedings." The article went on to say, "Freeh's FBI has tried to run roughshod over the civil liberties of ordinary citizens, demanding access to encryption codes and elbowing its way onto every PC in the country through its Carnivore project".
FBI Director Louis Freeh opposes U.S. encryption while admitting the U.S. is under digital attack. Freeh supported the mandatory Clipper project to bug America. Freeh's FBI also developed the intrusive Carnivore program, and Freeh has repeatedly testified that all encryption products should be banned. In fact, Freeh testified before the Senate on Sept. 3, 1997 that the Founding Fathers "did not foresee encryption."

Obviously, the FBI director flunked history class. The fact is the Founding Fathers knew very well of codes and ciphers. Jefferson, Franklin and even Washington used codes and ciphers for personal business. Paul Revere used the same techniques that, today, the director of the FBI proposes to ban.

President Bush has selected Freeh to continue as FBI director. Yet the FBI failed to detect the highest Russian agent in U.S. government service. Freeh policies and practices are anti-privacy, proven by his term with Bill Clinton.
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Freeh served as general counsel of the former MBNA credit card company in Wilmington, Delaware along with top bank executive Ric Struthers, a Penn State graduate and major contributor still affiliated with the university. Struthers is also on the board of directors of The Second Mile charity. Freeh gave a speech in 2005 at a dedication of a new Penn State building that Struthers and his wife supported through a $2 million gift.

In 2006, Freeh left the credit card company as it was acquired by Bank of America Corp. According to an MBNA document filed with the Securities and Exchange Commission, Freeh cashed out stock options worth over $20 million, not counting his annual compensation.

Freeh also served on the board of Fannie Mae before it was taken over by the federal government due to its insolvency in 2008, and on the board of Wilmington Trust Corp. until it was sold in 2010 after its share price collapsed due to bad real estate development loans in Delaware. Freeh currently serves as a member of the audit committee of Bristol-Myers Squibb Co., the drugmaker.
MBNA became the largest independent credit card issuer by landing college alumni and other group members as customers through lucrative arrangements that included giving the company access to alumni and student addresses and using college letterheads and mascots in marketing campaigns. Penn State, along with the National Football League and the National Education Association, was one of MBNA's biggest sources of profitable credit card debtors, company executives said at the time. Freeh didn't immediately return a call left at his Wilmington office.

Freeh is not the only former MBNA official with an important role at an institution trying to cope with the scandal.

One of his former superiors at MBNA, Ric Struthers, is the most prominent national business figure on the board of the Second Mile Foundation, the charity started and formerly run by coach Sandusky. (Fielding notes Freeh knew Struthers, but didn't report to him; he reported to MBNA's top boss, who at the time was company founder Charles Cawley. Struthers held the top job after Cawley's retirement. Freeh's duties at MBNA included lobbying Congress to make it harder for bankrupt consumers to write off their unpaid credit card bills, and marketing credit cards to police and other law enforcement groups.)

Struthers, a 1977 Penn State graduate, played a key role in managing the business relationship between the Penn State Alumni Association and MBNA. The bank paid the alumni more than $30 million for its mailing lists and other marketing aid in its credit card solicitation campaigns from 1994-2010, as I reported in this space last year after the university was forced to disclose the payments by a change in federal law.

Struthers collected more than $10 million a year in stock and cash pay from MBNA in the bank's final years; he donated $2 million to the bank's 2002-05 capital campaign. He held a series of executive jobs at MBNA and ran it with other operations as chief executive officer of the nation's largest credit card operation, after its purchase by Bank of America, until his job was eliminated last year.

Besides paying the alumni group $30 million, "from 1998 to 2002, MBNA also agreed to pay Penn State an additional $500,000 a year to ensure that it didn’t make deals with other banks and that football coach Joe Paterno kept up his end of another MBNA marketing agreement. Terms of Paterno’s deal weren’t disclosed," as I noted in my Philadelphia Inquirer column last year. Struthers didn't immediately return a call to his home.
Links

Missteps At Every Turn: Efforts to clean up Penn State reveal how deep the institutional problems lie

Pa. Governor In Middle On Penn State Case

Patriot-News Special Report: Inside the Jerry Sandusky investigation - why did it take so long?

Sandusky and the discussion of Division III football program at PSU Altoona in late 1998
In late 1998-early 1999, Sandusky held discussions with Penn State Altoona about the possibility of starting a Division III football program here.
Why did Sandusky Retire in 1999?

Interesting article on the cover up scandal

17 comments:

Mike,  17:42  

Interesting comment from Ron Powell at article you posted link to.

"I think your article makes some interesting points. Penn State is a very insular community literally surrounded by miles of sparsely populated farmlands and mountains. Paterno was the former athletic director before stepping down for Tim Curley, a former football player of Paterno's, was hired. Gary Schultz was also a former football player of Paterno's, as was current Chairman of the Board of Trustees Steve Garban. So, they not only thought of Paterno as a fellow University employee, they also knew him as Coach. In this type of environment, it would be hard to imagine Joe Paterno not knowing about a cover up.

It is hard to underestimate the power and sway that Paterno had within the Athletic Department.

Did you know that every single meeting that Curley and Paterno had was conducted at Paterno's house and not in Curley's office? Paterno was not only the highest paid University employee in the Athletic Department, he was also the highest paid University employee ... by far. In 2011, he earned $1.1 million in total compensation, which was $200,000 more than the next highest paid employee, President Graham Spanier.

To characterize Paterno's response as being guilty of little more than "playing by the rules" is a bit like categorizing a tornado as "a type of wind." Paterno liked to involve himself. In football, where he ran a tight and disciplined ship. In the University, where he donated more than $4 million to academic scholarships and other donations.

In 2007, when Paterno observed a car been driven erratically, he followed the driver and confronted her to make her aware that he witnessed the incident and that he was taking down her license plate number. This was not the type of man who just stood quietly on the sidelines.

Paterno's press statement following the release of the grand jury presentment sounded like an attempt to defend both Curley and Schultz by minimizing the significance of what McQueary might have told them. I don't think that you can square what Mike McQueary testified to the grand jury with the text of Joe Paterno's press statement. Either McQueary lied under oath or Paterno lied in his press statement -- it is as simple as that."

Roth's stepchild 19:39  

Thanks for posting comment, Mike. Lots of good points!

The following article published back in April about Sandusky's crimes gives you some idea that this is not brand new information to a lot of people.

http://www.timesonline.com/columnists/sports/mark_madden/madden-sandusky-a-state-secret/article_863d3c82-5e6f-11e0-9ae5-001a4bcf6878.html

Mike,  00:50  

Yeah, I don't think it's any coincidence that Sandusky was finally arrested less than one week after Paterno broke the record. The Paterno most NCAA D-1 college football wins for a coach record is worth mega-bucks to PSU, its alums and donors no-matter how much PSU is tarnished in the short-run, and you know it will be short run after Freeh puts ALL of the blame on Sandusky like it's a rare occurrence.

Anonymous,  00:54  

No one is asking why empanel a Grand Jury at all. Under Pa. Law, the District Attorney or the Attorney General could issue an Indictment or Presentment independently without a Grand Jury and Sandusky could have been arrested immediately.

If there was another victim after Corbet was informed, and 'personally managed" this investigation as he said in his press conference, then he is responsible for that victim(s) abuse.

The real second scandal was the furthering of the cover-up that Corbet was undertaking of his own involvement or more precisely.

Why else would a sitting Governor attend the Board Meeting (first time in history) and talk to Trustees, who also might be involved in the cover-up, about their liability and how to cut their loses and damages. He is changing sides of the investigation, from prosecutor to defendant and using the information that he learned "personally managing" the investigation to advise the Trustees and others how to continue the cover-up. (Did he talk to Spanier, Paterno? Did Spanier or Paterno tell any of the Trustees along the way? Has the Governor used information that he learned as prosecutor to help or tip-off the defendants?) He is trying to "get ahead" of this scandal by having his press people push their version.

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