Pass/Fail

Catherine Dunn

Corporate Counsel

09-01-2012

When Cynthia Baldwin was hired as Pennsylvania State University's first general counsel, she never expected to be graded, much less by former Federal Bureau of Investigation director Louis Freeh. But Freeh's probe into how the university handled sexual abuse allegations against former football coach Jerry Sandusky delivered a harsh report card on Baldwin's own performance.

In July, when special counsel Freeh reported the results of his eight-month inquiry, he put it this way: "If you look at the evidence in our report, the general counsel for the university and outside counsel were seriously deficient in providing good, and important, and accurate counsel to their clients."

Baldwin's name surfaces frequently in the 267 pages. When alerted that a grand jury would subpoena testimony from Penn State officials, the report said that she didn't engage expert counsel. She later told the athletic department that the school couldn't restrict Sandusky's access to campus while he was under investigation. And for months she failed to inform the board that the inquiry involved school leaders. Even after Sandusky was arrested, she opposed an internal investigation.

The Freeh report holds important lessons for university law departments, say legal experts on higher education. Ada Meloy, GC of the American Council on Education, says that it's something that "virtually any college or university counsel could read and learn from."

There were no in-house lawyers at Penn State in 1998, when officials first heard allegations that Sandusky had sexually abused a young boy in a locker room. They relied then on McQuaide Blasko, and partner Wendell Courtney, to handle most legal work. Meloy laments the absence of a GC: "A general counsel who is very familiar with the operations and policies of an institution should be in a better position than an outside lawyer to understand the ramifications of events on campus."

In 2009, for reasons that the report doesn't specify, the trustees decided to create a GC's office. When Baldwin was hired in January 2010 as interim GC (with a mandate to establish Penn State's first law department), she was already familiar with the place. A former Pennsylvania Supreme Court justice, Baldwin chaired Penn State's board from 2004 to 2007 and holds two degrees from the university.

She arrived at a critical time. A grand jury had been impaneled the previous year. It ultimately investigated not only the 1998 allegation but others that occurred after Sandusky resigned in 1999 and was granted emeritus status, allowing him to continue to use campus facilities. In 2011 the grand jury called four officials: VP for finance and business Gary Schultz, athletic director Tim Curley, head football coach Joe Paterno, and president Graham Spanier. According to the Freeh report, all four men concealed information about Sandusky.

Last November the scandal exploded into plain view. Sandusky was arrested. Schultz and Curley were indicted on charges of perjury and failure to report suspected child abuse. The university allowed Spanier to resign and fired Paterno. A jury convicted Sandusky in June, and a few days later, in a move announced in January, Baldwin retired.

Freeh zeroed in on her actions starting in December 2010, nearly a year into her tenure. That's when prosecutors in the Pennsylvania AG's office informed Baldwin that they would issue subpoenas for PSU officials. "Baldwin did not seek the assistance of an attorney experienced in addressing criminal investigations," the Freeh report states.

Freeh wasn't alone in questioning this decision. Stephen Hirschfeld, who specializes in employment law and internal investigations at universities, was also critical after reading the report. Failing to retain an outside expert was a "major mistake," says Hirschfeld, a founding partner at Curiale Hirschfeld Kraemer. Given the special rules that govern grand juries, "you need someone who knows that inside and out."

Meloy agrees. "Some general counsel may come with a background and experience in criminal law, but most would not," she says. Before Penn State, Baldwin was a partner at Duane Morris, where she focused on appellate litigation and nonprofit governance. Nothing suggests an expertise in criminal law.

Through her lawyer, Baldwin took issue with the report. "No one should draw conclusions until all the facts are known," Fox Rothschild partner Charles De Monaco said in a statement. He was upset that his client wasn't permitted to review interview transcripts to correct mistakes. He particularly objected to one statement. "Contrary to the representations made in the Freeh report," he said, Baldwin "hired a team of criminal and civil experts when it was appropriate to do so." (Penn State confirmed that Baldwin hired three firms, but not until November and December 2011.)

As harsh as Freeh's assessment was, it could have been worse. In January 2011 Schultz, Paterno, and Curley testified before the grand jury. The Freeh report said Baldwin told Curley and Schultz that she was representing Penn State and that they could hire their own counsel.

However, a press account quoting grand jury transcripts contradicts her. According to the Harrisburg Patriot-News , Curley and Schultz, when asked if they were accompanied by counsel, identified Baldwin. This has raised questions about whether Baldwin should have been allowed in the room during those appearances, and whether Curley and Schultz were adequately represented.

The newspaper's earlier coverage raised even more fundamental questions about Baldwin's handling of the affair. In March 2011 the Patriot-News broke the story that Sandusky was the focus of secret grand jury proceedings. When athletic department staff asked if Sandusky could be barred from the facilities, Baldwin said that he couldn't. She told Freeh's team that because he had emeritus status and hadn't been charged with a crime, denying him access could have resulted in "the university being sued."

Beyond this, Baldwin failed to tell the board that there even was a grand jury investigation until the board's May meeting—"and, then, only at the request of a trustee who had read" the Patriot-News coverage, according to Freeh. Even at that briefing, Baldwin "minimized its seriousness by not fully describing the nature of the allegations or raising the issue of possible negative impact to the university," the report states.

The report depicts Baldwin and Spanier as a united front on key decisions. It's not uncommon for a GC to feel caught between loyalty to a president who selected her, and her ethical obligations to the organization, says Hirschfeld. But it was Baldwin's duty to tell the board about a matter "with serious potential for liability and a public relations disaster," he adds. "These are independent decisions you have to make after assessing the legal risks to the institution."

Baldwin could have taken the initiative. "There was obviously a decision made not to conduct an independent investigation on that campus," Hirschfeld says. "With so many relationships on the campus already, and so much potential for conflict of interest, you've got to have a lawyer . . . whose only duty is to get the facts and arrive at conclusions."

Even after Sandusky was charged, the report found that "Spanier and Baldwin opposed an independent investigation." In an email, Baldwin worried, "if we do this, we will never get rid of this group in some shape or form."

Will Baldwin be able to effectively counter Freeh's appraisal? His won't be the only criticism she will have to weather. Former colleagues have already begun pointing fingers. Spanier blames Baldwin for failing to hire expert counsel and downplaying the grand jury investigation.

Baldwin's attorney insisted that his client "at all times upheld her duties to the university and its agents. She is obligated to maintain silence to fulfill her ethical obligations to the university," De Monaco said. "We intend to address factual allegations and legal issues directly with the university and in legal proceedings, not in the media."