MSU to pay record fine in Nassar fallout

Michigan State University will pay a record $4.5 million fine to the federal government on Friday for its mishandling of Larry Nassar's decades of sexual abuse.

The penalty will be paid in full through a wire transfer after money is pulled from investment funds, but not tuition or endowment accounts, MSU spokeswoman Emily Guerrant said. 

But what MSU does after that, higher education experts say, will demonstrate whether the university has learned from the mistakes of the past. Missteps allowed Nassar to prey on hundreds of females under the guise of medical treatment, and his boss, William Strampel, a former dean of MSU's College of Osteopathic Medicine, to pressure students for sexual favors.

"The crimes for which Larry Nassar and William Strampel have been convicted are disgusting and unimaginable. So, too, was the university’s response to their crimes. It must not happen again there or anywhere else," Education Secretary Betsy DeVos told reporters on a conference call Thursday as her department revealed the findings of two investigations into the Nassar scandal at the East Lansing university.

She called what happened at MSU "abhorrent." 

The fine levied against Michigan State University over failures in its handling of disgraced sports doctor Larry Nassar is the largest ever under the federal law that requires public disclosure of safety threats.

DeVos' comments came minutes after The Detroit News first reported that the U.S. Department of Education was fining the East Lansing university for a "systemic failure to protect students" and failure to alert the public and campus community about Nassar's and others' conduct.

The penalty is the largest levied under the federal Clery Act, which requires public disclosure of safety threats and annual reporting of campus crime data. The fine eclipses the $2.4 million the government levied on Penn State University in 2016 following the Jerry Sandusky child sexual abuse scandal.

Education officials said the university last month agreed to pay the fine amount as part of a settlement agreement that also requires the university to overhaul its process for handling criminal complaints. 

The Department's Office of Civil Rights separately found MSU had violated the federal non-discrimination law known as Title IX in its handling of both Nassar's and Strampel's cases. 

In the wake of that news, MSU President Samuel Stanley said he'd accepted the resignation of Provost June Youatt after investigators found that complaints about Strampel's behavior had reached the highest levels of MSU's administration over 15 years, and that the university repeatedly failed to address those concerns.

Stanley said the Office of Civil Rights "is very clear that the provost and former president failed to take appropriate action on behalf of the university to address reports of inappropriate behavior and conduct, specifically related to former Dean William Strampel."

Stanley, who began his post last month and presides over his first board meeting Friday, said he would form a new oversight committee to ensure MSU fully responds to the steps outlined in the agreements with the Education Department. 

“In my effort to build a safe and caring campus, we must have a culture of accountability," he said. 

But accountability remained a sore spot among victims and their advocates, who criticized the federal fine as a pittance.

Sarah Klein, who was abused by Nassar, noted the penalty represents less than 1% of the $500 million settlement that MSU entered into with victims.

"This tells universities that it is much cheaper to protect perpetrators than to properly investigate reports of sexual abuse and take action," Klein said. 

Morgan McCaul, another woman abused by Nassar, tweeted: "(Rachael Denhollander) asked the world, 'How much is a little girl worth?' (Betsy DeVos) answers, 'Not that much.'"

'Failed to adequately respond'

MSU's penalty follows the conclusion of two Education Department investigations into Clery Act and Title IX violations, with the latter finding that MSU "failed to adequately respond" to reports of sexual misconduct by Nassar and Strampel and also failed to take "appropriate interim measures" to protect students while complaints against both men were pending.

The department on Thursday released a separate agreement with MSU requiring the university to make major changes to its Title IX procedures by Jan. 6 to include the recusal of certain officials from investigations and proper oversight of the Title IX office ensuring it's free from "undue influence or pressure" from elsewhere within the university, including the Office of General Counsel. 

Current and former MSU officials and supervisors, including former President Lou Anna Simon, could also face consequences, as the government is directing the university to weigh "appropriate" sanctions against employees "who had notice but who failed to take appropriate action" to respond to reports of sexual misconduct by Nassar or Strampel. 

The agency based its Clery Act fine on four findings of "serious" noncompliance in its report, including failure to disclose in its crime statistics Nassar's sex crimes dating to 1997.

"None of these crimes were ever recorded through any of the university’s normal incident reporting processes, and, as a result, were never included in any of Michigan State’s crime statistics disclosures," says the department's Clery Act report, which was provided to interim President John Engler in December. 

The report provides 10 sample cases, including one from a 14-year-old member of MSU’s junior gymnastics club, Spartan Youth, that should have been reported and classified in the university's crime statistics as a forcible sex offense.

The report also faults MSU for failing to issue "timely" warnings of Nassar's pattern of criminal sexual abuse over 20 years, saying the crimes reported by victims "unquestionably posed a serious, ongoing threat to campus community members, and, most specifically, to female patients of MSU Sports Medicine." 

Investigators also found MSU failed to issue timely warnings following 21 other crimes dating to 2011 that "may have posed a serious ongoing threat," including burglaries, robberies and a reported case of larceny.  

The investigators also found that MSU "substantially" failed to seek out and notify institutional officials responsible for the intake of information regarding incidents of crimes that have to be reported to them. 

"This serious, systemic, and persistent condition contributed significantly to Michigan State’s ongoing failure to disclose accurate and complete campus crime statistics ... throughout the review period, and as far back as 1997," the report says.

The university has faced multiple investigations into the way leadership handled allegations against Larry Nassar, who was accused of abusing more than 200 women over more than two decades.

MSU's Title IX agreement with the department specifically requires the university to review the actions of Simon and Youatt, as well as former Provost John Hudzik; Terry Curry, the associate vice president for academic human resources; Kathie Klages, former head coach of the women’s gymnastics team; and employees of MSU's Office of the General Counsel, officials said.

"We will conduct this review, and once completed, if further personnel actions are needed, we are prepared to take them," Stanley said. 

The Education Department is also requiring MSU to provide a process for Nassar victims to "seek remedies to which they might be entitled," such as counseling services, grade adjustments or tuition reimbursement.

The university must publicize its process for these remedies and post a notice on its homepage urging students, employees and former employees assaulted or harassed by Nassar to contact the Title IX office, Assistant Secretary for Civil Rights Kenneth L. Marcus said. 

The federal Title IX probe found that, over and over, when victims reported Nassar's behavior, they were dismissed or not believed, and colleagues and trainers who worked with Nassar insisted that his intentions weren't inappropriate.  

The Education Department concluded it was "unclear" from its review of MSU records whether the university ever conducted any internal investigation of the allegations that its employees received reports about Nassar, but they had failed to report those concerns to the appropriate offices.

"Today, MSU was held accountable for its historic failure to keep our children safe," Michigan State Trustee Brian Mosallam said in response to the release of the findings. "I am grateful that as part of the agreement, MSU finally agreed to adopt a number of my recommendations ... It is unfortunate that it took federal action to compel these common-sense actions."

But Michigan State still has a long way to go, said Ann-Marie Anderson, an Arizona-based lawyer who was the founding editor of University of Michigan's Journal of Gender & Law. 

"In order to begin to address or remediate this tide of unfavorable news, MSU will want to immediately begin overhauling its victim and witness complaint process and mechanisms," said Anderson, who lectures and writes nationally on Title IX and related issues.

"MSU must assemble a blue-ribbon panel of Title IX lawyers and investigative experts, as well as victims and members of the public. If they don't use this now as an opportunity to show contrition and responsibility for the safety of their students and the public, they might not get another chance." 

The university is already running out of chances, say lawyers who represent most of the women who sued MSU and other institutions in the wake of the Nassar scandal.

Thursday's settlement "is not a punishment for knowingly allowing little girls to be molested for more than 20 years. It is a gift," attorney John Manly said.

"The Department of Education could have sent a strong and meaningful message that MSU’s behavior is not acceptable. Instead, they sent a message to every university in America that if you ignore reports of sexual assault on your campus and cover up the crimes of perpetrators, you will get a slap on the wrist."

Mick Grewal, an Okemos-based lawyer who represented a third of the Nassar victims, also scoffed at the fine amount, saying it should have been much higher if the government wanted to deter other institutions.

“It’s a large fine, but look at the scope of crimes that occurred,” said Grewal, pointing to the more than 500 women who came forward and accused Nassar of sexual assault.

Education Secretary Betsy DeVos

MSU makes promises

The education department said an agreement signed by MSU officials last month will further address Title IX violations by: 

  • Taking remedial action to address the impact of the misconduct by Nassar and Strampel on students, faculty and other staff at the university and Sports Medicine Clinic, and in related facilities, programs and services.
  • Addressing campus climate surrounding issues of sexual harassment and sexual violence and strengthen staff training.
  • Exercising adequate Title IX oversight of the university's youth programs by notifying Youth Program participants of its Title IX grievance procedure.

For three years, the university must also provide the department's Office of Civil Rights with copies of all completed Title IX complaint files processed under the new structure and hire a third-party consultant to review all completed Title IX investigations and determinations. 

MSU's president and a designated member of the Board of Trustees also must receive a report each semester identifying all open and recently resolved Title IX complaints filed against an employee as well as a copy of the final investigative report and final determination regarding that employee.

MSU must also document will all actions taken in response to Title IX complaints at each stage of the process, including sanctions against employees. 

The agreement says that employees subject to review for not properly responding to the misconduct allegations against Nassar and Strampel could face sanctions, including revocation of tenure and honorary titles, demotion, reassignment, reduction of pay or removal of benefits, prohibition from university facilities and activities and disciplinary proceedings. 

"While this agreement applies only to one specific university, we expect that this message should be heard loudly and clearly by other universities so that the tragedy of MSU is not repeated elsewhere," Marcus said. 

Many have predicted that one of Stanley's biggest challenges as MSU president would be to rebuild the trust in the university that was eroded after the scandal began in September 2016, when Denhollander publicly accused Nassar of sexual assault.

The scandal ultimately toppled MSU leaders including Simon, Engler and on Thursday, Youatt.

Nassar had treated some of the nation's top Olympic athletes and was effectively sentenced to life in prison in January 2018 for his sexual crimes, which were committed under the guise of medical treatment. 

Strampel was sentenced last month to a year in prison after his conviction on charges related to harassing female students and failing to properly oversee Nassar.

Now, university officials, including the Board of Trustees, Stanley and certain administrators, will receive Title IX training from the Office of Civil Rights, according to the Education Department.

In addition to hiring a Clery Act compliance officer, MSU will be required to establish a new Clery Compliance Committee that includes representatives from more than 20 offices involved in campus safety, fire safety, emergency management and substance abuse prevention.

The university must also create a system of protective measures and expanded reporting to ensure the safety of student-athletes in intercollegiate and recreational athletic programs. 

The new measures also include steps to ensure the safety of minor children in camps or other youth programs sponsored by MSU or those held on its properties. 

MSU is not the only Michigan university to be fined by the federal government for violating the Clery Act. In 2008, Eastern Michigan University agreed to pay a $350,000 fine to the U.S. Department of Education after it failed to notify the community of a 2006 rape and murder investigation on campus.

“Students are our focus, and we are committed to their safety on campus,” said Office of Federal Student Aid chief operating officer Mark Brown.

“Our findings and the required corrective actions should serve as a reminder to all schools that we take seriously our commitment to vigorously enforce the Clery Act and protect all students. Any school that falls short will be held accountable.”

Read for yourself

To access the Campus Crime Program Review Report, click here.

To access the settlement agreement reached between MSU and the Department of Education’s Office of Federal Student Aid, click here.

To view the Office for Civil Rights Letter of Finding, click here.

To view the resolution agreement reached between MSU and the Department of Education’s Office for Civil Rights, click here.