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Zach Gorchow, who has spent two decades as a journalist, knows the real story often is below the surface. What people don't say or try to diminish can be revealing.
So the Lansing editor sees significance in three words that appear midway through a 16-paragraph email to "MSU community members" from President Lou Anna Simon late last week on the Larry Nassar mess. The telltale words are "its insurers require."
Simon uses a similar phrase (above) in paragraph 10 of an 18-paragraph letter to all state legislators Jan. 10.
Zach Gorchow: "It doesn’t take advanced math to see the liability potentially surging past $1 billion."
Gorchow, who oversees content at Gongwer News Service, which posts authoritative state government coverage, explains the short phrase's outsize impact:
The fear among MSU brass appears to be that if MSU were to immediately settle in those [civil] cases instead of mounting a defense, which always includes a motion to dismiss the case, that the university’s insurers would walk away and MSU would have to rely on its own resources – its endowment, general fund, other internal sources – to pay the victims instead of its insurers.
This approach also appears to govern Ms. Simon’s refusal to resign, and the Board of Trustees’ decision not to fire her, that such a move would somehow signal an admission of guilt and provide an opening for the university’s insurers to avoid covering what could be many hundreds of millions in liability.
The Nassar victim count is up to 200 – and rising. It doesn’t take advanced math to see the liability potentially surging past $1 billion.
That type of a judgment or settlement would have massive consequences for the university if it had to pay out of its own funds. So every move MSU is making appears governed by that fear.
Gorchow, a 1998 Michigan State graduate, says the three words "shed some light on why the university has taken the approach of issuing carefully worded denials that no university official 'believed' Nassar committed crimes until he was arrested and why it is mounting an all-out defense in federal court against the more than 100 lawsuits Nassar's victims have filed against the school."
However, not all costs are tallied in dollars, the editor reminds his alma mater:
In its effort to stave off financial ruin, MSU is suffering reputational ruin. . . .
MSU is afraid of the financial consequences if its insurers walk away.
But what if it keeps those insurance policies in place only to see large numbers of potential students, donors and alumni walk away in disgust?
