0917 PATERNO 4 JRH

Court documents state that "in 1976, a child allegedly reported to PSU's Head Coach Joseph Paterno that he (the child) was sexually molested by Sandusky."

(Joe Hermitt, PennLive.com)

This post was updated at 9:18 p.m. Thursday to add some new information.

A new bombshell dropped in the Jerry Sandusky child sex abuse scandal Thursday.

It came in the form of a single line in a court order on a related insurance coverage case involving Penn State, and its full ramifications can't immediately be gauged.

But that line was eye-popping in itself.

The line in question states that one of Penn State's insurers has claimed "in 1976, a child allegedly reported to PSU's Head Coach Joseph Paterno that he (the child) was sexually molested by Sandusky."

The order also cites separate references in 1987 and 1988 in which unnamed assistant coaches witnessed inappropriate contact between Sandusky and unidentified children, and a 1988 case that was supposedly referred to Penn State's athletic director at the time.

All, the opinion states, are described in victims' depositions taken as part of the still-pending insurance case, but that, according a PennLive review of the case file, are apparently under seal.

"There is no evidence that reports of these incidents ever went further up the chain of command at PSU," Judge Gary Glazer wrote, in determining that because Penn State's executive officers - its president and trustees - weren't aware of the allegations, he would not bar claims from that time frame from insurance coverage.

The insurance case involves big money for Penn State, which hopes to be reimbursed for most of the $60 million-plus it has paid in recent years to settle nearly 30 civil claims pertaining to abuse by Sandusky.

Other sections of Glazer's pre-trial order Thursday held that the university cannot claim coverage for Sandusky settlements for abuses started between 1992 and 1999 because of specific provisions in policies written in those years excluding claims of sexual abuse.

But it is the Paterno allegation that is eye-popping, because of the unending national conversation and curiosity over how much the late and legendary Penn State coach may have known about Sandusky's actions during their lengthy careers together.

Sandusky, who was convicted in 2012 of the serial sexual abuse of 10 different boys he came to know through his Second Mile youth charity between 1994 and 2008, was a key part of Paterno's coaching staff from 1969 through 1999.

Parts of Penn State nation still are deeply divided over questions like whether Paterno was wrongly fired in the wake of Sandusky's November 2011 arrest, and whether the coach's Beaver Stadium statue - taken down in the summer of 2012 - should be reinstalled there or somewhere else on the campus.

Paterno's family, and by extension its legions of loyalists, have argued vehemently that Joe Paterno and the larger Penn State community were deceived by the Sandusky, whom they have argued - with a consultant's help - was a master deceiver and manipulator.

And they also disputed the claim in the current case Thursday evening in the strongest possible terms.

"Over the past four-and-a-half years Joe Paterno's conduct has been scrutinized by an endless list of investigators and attorneys," the Paterno family's attorney, Wick Sollers, said in a statement.

"Through all of this review there has never been any evidence of inappropriate conduct by Coach Paterno. To the contrary, the evidence clearly shows he shared information with his superiors as appropriate.

"An allegation now about an alleged event 40 years ago, as represented by a single line in a court document regarding an insurance issue, with no corroborating evidence, does not change the facts. Joe Paterno did not, at any time, cover up conduct by Jerry Sandusky."

PennLive reached out to Steven Engelmyer, the lead attorney for Pennsylvania Manufacturers Association Insurance Co., which is arguing in the current case in Philadelphia's Court of Common Pleas that it has no duty to reimburse Penn State for more than $60 million in Sandusky-related civil settlements that the university has paid to date.

Engelmyer declined comment when reached Thursday.

Others, most notably Penn State's independent Sandusky investigator Louis Freeh, have alleged that, at least from 1998 on, Paterno, then-Penn State President Graham Spanier and two of Spanier's top managers were aware of complaints against and about Sandusky.

In a pending criminal case, Spanier, former athletic director Tim Curley and former vice president for business and finance Gary Schultz are accused of failing to report a specific allegation of abuse by Sandusky in 2001 that a then-graduate assistant had reported directly to Joe Paterno.

Paterno, who died in January 2012, was never charged with any crimes.

As Sollers pointed out in his statement, however, it was Paterno who actually referred the graduate assistant in the 2001 case, Mike McQueary, to Curley and Schultz.

But Freeh's report also cited emails from that time frame that raised the suggestion Paterno may have been part of a later decision not to take the McQueary report to police or child welfare authorities.

A source who had worked on the state's Sandusky probe but who asked not to be identified told PennLive Thursday night he knew of no cases, aside from the 2001 case, in which there was a direct report to Joe Paterno about Sandusky.

Many of the people who presented civil claims to Penn State only started to come forward after the completion of Sandusky's criminal trial in June 2012. Freeh's report was issued the following month.

The allegation contained in Glazer's ruling drew immediate puzzlement and uncertainty from some of Paterno's most loyal supporters at Penn State Thursday, and a muted reaction from the university itself.

Trustee Anthony Lubrano, a Paterno loyalist who has worked tirelessly with alumni allies to try to "correct the record" in the Sandusky case, said he was "not even peripherally aware" of the 1976 claim about Paterno.

But, he added, "I am highly doubtful about the veracity of the allegation."

Penn State spokesman Lawrence Lokman said university officials who have worked on the legal cases radiating from the Sandusky scandal were aware of the allegations, broadly, contained in the insurance case.

"Many, many people, potential victims and victims have come forward to the university as part of that (settlement) process," Lokman said. "We do not talk about their specific circumstances."

Lokman also would not say whether the 1976 incident raised in the PMA case was one of the 30 or so that have resulted in monetary settlements.

As to Glazer's ruling in the insurance reimbursement case, Lokman noted it is not the last word in the case.

"We are analyzing the decision," Lokman said. "It does not mean the university will not recoup amounts spent in responding to the Sandusky victims. It is a complicated process that is not complete."

UPDATE: The court document referenced: