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Penn State trustee Barry Fenchak alleged in a lawsuit that fellow board members have prevented him from accessing financial information related to the university endowment.
Photo illustration by Justin Morrison/Inside Higher Ed | csfotoimages/iStock/Getty Images | Supreme Court of Pennsylvania
When Pennsylvania State University trustee Barry Fenchak sued fellow board members earlier this month for allegedly withholding financial information from him, he became the latest occupant of the Happy Valley sphere to register concerns about institutional transparency.
His complaint follows similar accusations by faculty, alumni and local media. But it’s especially notable that this time the allegations of opacity are coming from someone who sits on Penn State’s governing board, which he says has rebuffed multiple requests for detailed information about the university endowment. An investment adviser by trade, Fenchak expressed alarm about climbing endowment fees, which public records show tripled between 2016 and 2023 with no clear explanation.
One of 36 members on a sprawling board with a unique structure—some trustees are appointed while others are elected by different groups—Fenchak has accused his fellow trustees of barring him from gaining access to the requested information and then retaliating against him for pressing for more data.
The Lawsuit
Despite Penn State’s ongoing financial challenges, which prompted buyouts earlier this year, the university has an endowment valued at around $5 billion, according to Fenchak’s lawsuit. But Fenchak believes that figure could be higher if endowment management fees were lower.
His lawsuit alleges that in response to his requests for more details on the fees, he was given information already publicly available. It notes that while he “has not made accusations of malfeasance and/or of gross negligence, such activities would be impossible to uncover without access to the information requested.”
Fenchak told Inside Higher Ed he filed the lawsuit because without the specific information he requested and was denied, he felt unable to carry out his fiduciary duties “with the proper level of diligence on issues that are impactful to the university.”
The aggregated data he was given, he said, “was of no use in conducting analysis from a fiduciary standpoint.”
Fenchak alleges in the lawsuit that fellow trustees shut down his requests for more financial data, citing a letter from board chair Matthew Schuyler and vice chair David Kleppinger in which they call his requests both “unreasonable” and “overly burdensome.”
In addition to denying his requests, Fenchak alleges, Schuyler “repeatedly imposed sanctions and punishments.” The lawsuit alleges he has been censured, banned from committee membership and had his “board social privileges” revoked.
Fenchak also told Inside Higher Ed that fellow trustees have warned him not to post recaps of board meetings on his personal website, where he has explained his own voting decisions.
Penn State declined to discuss the lawsuit, noting the university doesn’t comment on pending litigation. But a spokesperson wrote by email, “Trustees are provided with robust data and information, designed to educate them and enable decision making and oversight.”
Fenchak is not the only trustee to allege a lack of transparency in recent months. Trustee Anthony Lubrano also expressed concerns about Penn State’s use of executive sessions.
“This is a problem that has plagued the governance of Penn State for as long as I’ve been on the board—our use and abuse of rules and laws,” Lubrano told the local news organization Spotlight PA in June. (Lubrano did not respond to a request for comment from Inside Higher Ed.)
Like Fenchak, Lubrano has accused board leadership of trying to stifle his dissenting views. In April he shared with local media a letter of reprimand from Schuyler and Kleppinger, scolding him for making media appearances that were not “coordinated with the strategic communications team” and for allegedly sharing “confidential information.”
In an interview, Schuyler disputed notions that Penn State’s board has fallen short on transparency and denied that any members have had their views stifled.
“The notion that trustees don’t have the opportunity to give input or to be heard is foreign to me because we have so many forums for them to do that. And I disagree with the notion that they are not able to disagree in public—that is the very nature of our deliberation. Many times the deliberations result in disagreements, and that’s OK,” he told Inside Higher Ed.
Like the university, Schuyler declined to comment on pending litigation.
Calls for Transparency
When Penn State enacted voluntary buyouts and consolidated campus leadership positions earlier this year, faculty members expressed concerns that the effort felt rushed and lacked community input. Some told Inside Higher Ed they wanted more transparency.
But calls for more openness from the administration and board are nothing new.
Faculty Senate chair Josh Wede, a longtime psychology professor at Penn State, believes the university has long struggled with transparency due to a mix of legal and cultural factors.
As a state-affiliated but not state-owned institution, Penn State is subject to an unusual carve-out in the state’s public records laws that limits information it is legally required to provide to the public. (The other state-affiliated institutions—Lincoln University, Temple University and the University of Pittsburgh—are also largely exempt from Pennsylvania’s right-to-know laws.)
Schuyler said he had no opinion on whether state right-to-know laws should include Penn State.
Wede sees the public records exemption as a key factor in what he believes is Penn State’s lack of transparency. But he also said that just because university officials can withhold certain information doesn’t mean they should; in particular, he believes the Board of Trustees should spend more time deliberating in open session instead of behind closed doors, where many big decisions seem to be made first.
Wede said that after the Jerry Sandusky sexual assault case in 2011, there was talk of increasing transparency, but it never happened.
“I think it’s partly based on the culture of how Penn State has operated for decades,” Wede said.
Alumni have also raised complaints about a lack of transparency by the administration.
Long-Standing Concerns
At Penn State, both the president and the board have complicated relationships with transparency.
Neeli Bendapudi, who was hired as president in late 2021, has been trailed by transparency concerns since her days at the University of Louisville, which she led from 2018 to 2021. She began her Louisville presidency with a promise to be clear and open in her decision-making.
“I hope to set the tone that we have to be transparent,” Bendapudi told The Louisville Cardinal upon taking office in 2018. “If I’m the only one that knows what’s going on, if I’m the only one that holds the cards, if we have not shared information with people, you get bad decisions faster. To get good decisions you’ve really got to share with people, so then they can bring their wisdom. In my mind, it’s a great way to enhance accountability, and provide better solutions.”
But toward the end of her term, a column in the Louisville Courier-Journal flatly accused her of failing to deliver on the promise of transparency. It argued that Bendapudi had “declined to explain how a board meeting met the legal requirements to be conducted behind closed doors” and withheld details about the unexpected exit of Louisville’s athletic director.
Bendapudi has also clashed with local media at Penn State. Last April, following a report about looming budget and personnel cuts by Spotlight PA that was also published in the Centre Daily Times, Bendapudi called the newspaper “fake news,” arguing that the article irresponsibly made predictive claims without any evidence. Both outlets defended their journalistic integrity in a joint editorial rebutting Bendapudi’s accusation.
(Asked if Bendapudi’s characterization was appropriate, Schuyler said, “Not at all,” but argued it was likely borne out of frustration with coverage she perceived as negative and inaccurate.)
Spotlight PA has also sued the Penn State Board of Trustees over allegedly abusing executive sessions to conduct public business behind closed doors in violation of state sunshine laws. That lawsuit, filed late last year, is currently pending.
In 2022, the news organization launched a project called the Penn State Transparency Tracker, which reporter Wyatt Massey, who covers the university, said grew partly out of conversations with community members who want more transparency about the university’s operations given the vast economic impact and long shadow it casts over the region.
“State College [where Penn State is located] is sort of a company town except the company is a university, not a mill or a manufacturer, and has a nearly 10-billion-dollar budget,” Massey said.
Though lawmakers have sought more transparency given the public funding that flows to Penn State, former president Graham Spanier argued in 2007 that the university should not be included in Pennsylvania’s right-to-know laws. (Spanier was later fired and jailed after lengthy appeals for failing to report allegations of sexual abuse by Sandusky.)
Spanier argued that Penn State already reported financial details and imposing broader public record laws would “fundamentally change the way we operate, the way our trustees govern, and the way the university administers their policies. Frankly, we will have to operate in a way that will make us less nimble and less competitive with many other major research universities in the nation.”
Bendapudi struck a different tone when lawmakers raised transparency concerns last year. With a state funding bill stalled, Bendapudi wrote in an op-ed that she had “heard the call from some lawmakers who want additional accountability and transparency from state-related universities.” The president promised that Penn State would be more accountable going forward, promising the university would release an annual Accountability Report with frequently requested data.
Currently on vacation, Bendapudi was not available for an interview, but a Penn State spokesperson highlighted the report in response to interview requests from Inside Higher Ed, writing by email that the university “has released an unprecedented level of financial information this year,” including budget allocation details, additional insights and workbooks.
“All of this information is provided despite the fact that as a state-related rather than public University, Penn State is not subject to Pennsylvania’s ‘Right to Know Law,’” a spokesperson wrote.
Faculty members, however, are skeptical about the value of the Accountability Report and the additional information that Penn State has released. Much of the material in the report is already publicly available, Wede noted; the report’s website simply provides it all in one place. And while he credits “the current administration” for being more open about budget allocations “than any prior administration has been in my time,” he said it remains unclear “how faculty will have input into deficiencies in the [budget] model” shared by university leaders.
He noted that in April, Bendapudi rejected a formal Faculty Senate request asking for more transparency regarding cuts at Penn State.
Local media has seen little change since Bendapudi’s proclamation. In his two years on the beat, Massey said, Penn State officials have only granted two requests for interviews. At a recent board meeting, Massey said he approached a trustee with questions, only to have a member of Penn State’s communications staff step in and insist he send questions in writing instead.
Schuyler defended the practice, stating that “we answer any, every, and all questions that comes to us period, full stop, without exception” and adding that it might be more effective to answer questions in writing than in the moment. When Schuyler was pressed on the matter, Penn State spokesperson Rachel Pell, who sat in on the telephone interview, interrupted the line of questioning, arguing that Inside Higher Ed was “speculating based on what a different reporter told you in a circumstance that you weren’t present at.”
To date, Massey said he has not been granted an interview with Bendapudi or Schuyler.
Despite all the concerns, Schuyler argues that under the current administration, transparency at the university has never been better. Asked if Penn State could do more to improve overall transparency, the board chair demurred, calling the question “hypothetical.”
“I feel steadfastly that the communications have been better than they’ve ever been. They’re getting better all the time. This administration has been very transparent with the change initiatives and strategy that they’ve set and the vision that it works back from,” Schuyler said.
