.vresize.36.36.medium.0.png){kind=small}
.vresize.36.36.medium.0.png){kind=small}
Former Penn State head football coach Joe Paterno had close business ties with board members of The Second Mile, the charity that his assistant, accused child molester Jerry Sandusky, allegedly used to recruit his victims, The Daily has learned.
Around the same time a graduate assistant allegedly approached Paterno in 2002 to say he had witnessed Sandusky raping a boy in the locker room showers, Paterno and three fellow investors, including longtime Second Mile board chairman Robert Poole, had just secured financing to build a $125 million luxury retirement community, according to public records.
Paterno also was partners with this team on developing a golf resort and nearby restaurant and inn. He has also partnered with other current and former Second Mile board members on a bottled water company, a coaching website and a chain of convenience stores.
The Second Mile has said in a statement that Sandusky told the charity he was under investigation in 2008 and was immediately removed from programs involving children, although Sandusky didn't resign until last year. In an interview with The New York Times published Saturday, Sandusky said Paterno never confronted him about the accusations.
Officials at the charity would not specify who was notified. But some have questioned whether certain people within the charity knew before 2008, given Paterno's close business and personal relationships -- including dinners and a Bahamas vacation -- with Poole and several other past and present board members.
"I honestly think there was a conversation. I can't believe there wasn't one," fumed one former board member. "To be honest, I think people were worried about what would happen to Penn State and The Second Mile if Jerry Sandusky was found out."
Pinnacle Development, one-half of the developer team that built The Village at Penn State, included Paterno, Poole, William Schreyer -- a Penn State trustee whose daughter is a longtime board member of The Second Mile -- and local developer Philip Sieg.
Each partner stood to make an estimated $590,000 in fees and 15 percent annual interest on an $125,000 initial investment if the project was successful enough to get funding for a second phase.
It wasn't. The Village's nonprofit owner filed for bankruptcy Wednesday. The filing indicated that Pinnacle was never repaid its initial investment, and that $18.8 million was owed to residents who moved out and demanded refunds on their entrance fees.
Paterno could not comment for this article because he is "undergoing chemo and radiation every day" for lung cancer, his wife, Sue, told The Daily.
As the project struggled to rent its apartments and cottages -- with entrance fees approaching $500,000 -- Paterno appeared in a 2005 ad promoting the hillside complex with a view of the football stadium as a place he could see himself retiring.
Penn State President Graham Spanier, who was fired after a grand jury report detailing the allegations against Sandusky was released Nov. 4, conceived the project in 1995.
Since the project was being built on Penn State property, a nonprofit was created to act as its owner and operator. Former Second Mile board member Peter Weiler was its president; Penn State's former senior vice president for finance and business, Gary Schultz, was its treasurer. Both men declined to comment.
Schultz testified that he was notified of sexual abuse allegations against Sandusky in 1998 and 2002. He has been charged with perjury and failure to report the accusations, but has maintained that he was unaware of the seriousness of the allegations.
The group worked together on the project for roughly a decade after it was conceived in 1995. It was delayed because of financing difficulties, until a neighboring county eventually approved $56 million in bond financing in February 2002.
Developers were in the process of filing for building permits and marketing the units when graduate assistant Mike McQueary testified that he approached Paterno in March 2002 to tell him he had seen Sandusky sodomizing a boy in the football team's showers.
After being informed by Paterno, a week and a half passed before Schultz and Penn State athletic director Tim Curley called McQueary to a meeting to discuss the incident. No police report was filed.
