Penn State May Have Benefitted from a Robust Compliance Program

July 16, 2012 by · Leave a Comment
Filed under: Compliance 

kathleen m. boozangCuriously not mentioned in any of the stories about Penn State is the existence of a hotline to which eye witnesses of Sandusky’s child rapes could have been anonymously reported, or the existence of an Ethics/Compliance Professional with direct access to and oversight by the board.  Well, it turns out they’re not mentioned because they didn’t exist.  It appears that even now, Penn State lacks a compliance program, the creation of which Special Investigative Counsel Freeh’s Report recommends. Previously limited to financial fraud and HR issues, a June 21, 2012 posting by Penn State’s internal auditor announces a poster redesign advertising its hotline number, to which any ethical or legal concerns can now be reported.  Important will be training throughout the university regarding the law’s protection of whistleblowers, about which, according to Freeh’s Report, top university leaders were unaware.

While it is stunning that, even now, Penn State has not advanced further in setting up these protective measures, it is fair to say that much of higher ed has been slow to adopt compliance best practices common to the healthcare sector and most business entities.  Those universities with academic medical centers are among those who caught the wave early, because hospitals had to put compliance programs in place in the late 1980′s at the insistence of the Health and Human Services Office of Inspector General.  Experience in the health sector suggests that the kind of exceptionalism and favoritism extended to Paterno and Sandusky might not have happened if a strong compliance program with an ethics officer of stature had been in place.  The board would not have learned about crimes on its campus from the newspaper if it received regular updates from a compliance officer about all reports and investigations.

Janitors witnessed Sandusky engaged in sexual behavior or showering with children, but were afraid to make reports lest they’d lose their jobs.  An anonymous hotline would have provided a mechanism for this information to have led to a real investigation that would have confirmed the fears that Sandusky was a serial rapist.  Again, the ultimate decision-makers would have had an understanding of the full extent of the situation with which they were dealing — surely in the face of full-blown written findings detailing the scope of the horrors occurring on their own campus they would have acted.

Finally, the existence of an autonomous compliance ethics and compliance officer with sufficient stature and experience to conduct a full investigation and force a discussion about the appropriate handling of such catastrophic events could have also changed the outcome.  As it was, the oral information reported up the chain became so diluted by the time it reached the University President that a rape was reported to him as “horsing around in the shower.”  A complete written report would have avoided any such misunderstandings.  More important, the victim would have been identified and hopefully protected — no one involved in handling the matter inquired about or made any efforts to identify any of the victims.  Instead, Sandusky was given the heads up that he’d been seen in the shower, putting his child victim at greater risk.  To give Special Investigative Counsel Freeh “free rein” after-the-fact is too late; imagine the harm that could have been avoided had such an investigation taken place in response to an early hotline report complaining about Sandusky showering with children.  While the success of a robust compliance program for institutional reform is varied, experience in health care suggests that it contributes much to the prevention and discovery of problems.

While universities have certainly taken notice of the disaster that has befallen the children whom Sandusky assaulted and Penn State for its multiple failures, it is less certain that they’ve taken sufficient steps to ensure that similarly horrible events won’t get swept under the rug at their own institutions.  Universities are essentially small towns populated by an age cohort with adult problems and responsibility but frequently lacking the maturity to handle either effectively.  When you add the numerous high risk activities that are inherent to university life, it is no exaggeration to say that it is by the grace of God that more tragedies don’t occur on campuses.  I suspect there’s more than we know, and I fear the lesson of Penn State may be lost.

In short, all university boards should read Special Investigative Counsel Freeh’s Report and take seriously its recommendations for your own institutions.  Specifically, corporate compliance should be taken seriously.

If you are interested in learning about the whistleblower programs and the laws protecting whistleblowers, enroll in Seton Hall Law’s 8 week online course entitled The Law Protecting Whistleblowers.  Watch Seton Hall’s Online Certificate web page for details to be posted in mid-August.

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