By Dave Warner and Mark Shade
PHILADELPHIA (Reuters) - Penn State leaders including the late football coach Joe Paterno covered up Jerry Sandusky's sexual abuse of children for years, showing a callous disregard for the victims to protect a multimillion-dollar football program, former FBI director Louis Freeh said on Thursday.
Laying out the conclusions of his eight-month probe into the Sandusky scandal, Freeh singled out former university President Graham Spanier for criticism. He said a collective failure to stop Sandusky allowed the former assistant coach to continue luring victims for more than a decade, although Spanier disputed some of Freeh's conclusions.
"Our most saddening and sobering finding is the total disregard for the safety and welfare of Sandusky's child victims by the most senior leaders at Penn State," Freeh said. "The most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized."
Sandusky, 68, was convicted last month of sexually abusing 10 boys over 15 years and faces up to 373 years in prison. He filed his intent to appeal the conviction on Thursday.
His arrest in November came nearly 14 years after Pennsylvania State University officials first became aware of allegations Sandusky was a sexual predator, Freeh said at a news conference on the findings of his investigation, commissioned by university trustees at a cost of $6.5 million.
Spanier denied any role in a cover-up, saying he had never been told of Sandusky's misconduct before 2011.
"Not only did Dr. Spanier never conceal anything from law enforcement authorities, but prior to 2011 he was never contacted by law enforcement officials, or any other officials, about any criminal activities now attributed to Sandusky," Spanier's lawyers, Timothy Lewis and Peter Vaira, said in a statement.
Freeh's 267-page report revealed the extent to which Paterno and others conspired to cover up allegations against Sandusky, delivering a new blow to the reputation of a football program with the motto "success with honor."
"Sixty-one years of excellent service to the university is now marred," university trustee Karen Peetz said of Paterno.
The findings also provided new fuel for lawsuits - one expert predicted the university will eventually shell out more than $100 million in damages. Victims and their advocates have long complained they were sacrificed by university leaders for the cash and prestige generated by Penn State football.
"There are monsters among us," Pennsylvania Governor Tom Corbett said. "We will see that the failure to protect children does not happen again."
Freeh blamed Spanier, Paterno, former Athletic Director Tim Curley and former university Vice President Gary Schultz for working in concert on a coverup that began as early as 1998, when university police investigated allegations of abuse but let Sandusky off with a warning.
"In order to avoid the consequences of bad publicity, the most powerful leaders at Penn State University ... repeatedly concealed critical facts relating to Sandusky's child abuse," Freeh said, adding that bad publicity would have upset donors and damaged the Penn State brand.
Schultz's hand-written notes from a meeting on May 5, 1998, asked, "Is this opening of Pandora's box? Other children?"
Other allegations surfaced in 2000 and 2001, when adults reported witnessing Sandusky molesting boys in the locker room showers. Attorneys for some victims say the abuse predated 1998.
As a defensive mastermind at a school that became known as "Linebacker U," Sandusky helped turn Penn State into a perennial powerhouse under Paterno while establishing a charity for children, The Second Mile, which he used to find his victims.
The report could influence Penn State as it prepares for potential civil lawsuits. The university has already invited victims to try to resolve claims against the school.
Curley and Schultz have pleaded not guilty to charges of perjury and failure to report suspected abuse. Spanier and Paterno were not charged.
Caroline Roberto, Curley's attorney, and Schultz's lawyer Tom Farrell said in separate statements that the report was incomplete since Freeh did not have subpoena power and many people were reluctant to be interviewed.
Pennsylvania Attorney General Linda Kelly also did not allow Freeh to interview key witnesses, and the full story will only come out in court, they said.
Freeh's report "is a lopsided document that leaves the majority of the story untold," Roberto said.
Freeh also criticized the board that hired him, saying it failed to hold senior leaders accountable and declined to act after seeing a March 2011 media report about allegations against Sandusky.
Board members denied knowing about the abuse but said they would assume responsibility, though none of the 32 resigned.
"We are deeply ashamed," said Kenneth Frazier, a trustee who is also chairman of Merck & Co..
The grand jury charges against Sandusky in November prompted the board to fire Spanier and Paterno, the legendary "JoePa" who won more games than any other major college football coach. Paterno died two months later of lung cancer at age 85.
"Joe Paterno wasn't perfect," his family said in a statement. "He made mistakes and he regretted them. He is still the only leader to step forward and say that with the benefit of hindsight he wished he had done more."
The family has worked to protect the legacy of Paterno, who was mourned by thousands of people for days after his death for creating a program seen as a throwback to an era when college athletics represented the highest ideals of scholarship and sportsmanship.
The football program could face sanctions from the National Collegiate Athletic Association, but experts said Penn State was unlikely to be suspended, a punishment also known as the death penalty.
Penn State officials have come under scathing public criticism for how they reacted to the story of Mike McQueary, a graduate assistant who told them in 2001 he had seen Sandusky in a sexual position with a boy in a football locker room shower. Neither police nor child protective services were informed.
The Freeh report goes further, saying emails exchanged in 1998 and 2001 showed school officials discussed reporting the allegations about Sandusky to law enforcement. After speaking to Paterno "they changed the plan and decided not to make a report," Freeh said.
Sandusky continued preying on young boys for years. At least half of Sandusky's 10 known victims were abused after 1998, and the university allowed Sandusky to retire in glory in 1999.
Freeh was a U.S. District judge when former President Bill Clinton named him to run the Federal Bureau of Investigation in 1993. He remained in the post through 2001.
(Additional reporting by Ellen Wulfhorst, Barbara Goldberg and Joseph O'Leary; Writing by Daniel Trotta; Editing by Paul Thomasch and Todd Eastham)