The alleged cover-up by Paterno, then-university President Graham Spanier and two other Penn State administrators allowed Sandusky to prey on other boys for years, said the report by former FBI Director Louis Freeh, who was hired by the university's trustees to investigate.
He called the officials' behavior "callous and shocking."
"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 at a news conference in Philadelphia upon the release of the 267-page report. "The most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized."
The findings of the $6.5 million, eight-month investigation into one of the biggest scandals in the history of college sports could further stain Paterno's reputation. The revered coach who emphasized integrity both on and off the field and ran what was considered one of the cleanest programs in sports died of lung cancer in January at age 85, months after he was summarily fired by the trustees.
Freeh said that while he regretted the damage the findings would do to Paterno's "terrific legacy," the coach "was an integral part of this active decision to conceal," and his firing was justified.
Asked whether the actions of the four officials amounted to a crime such as conspiracy or obstruction, Freeh said that would be a matter for a grand jury to decide.
In a statement, Paterno's family strongly denied he protected Sandusky for fear of bad publicity.
"The idea that any sane, responsible adult would knowingly cover up for a child predator is impossible to accept. The far more realistic conclusion is that many people didn't fully understand what was happening and underestimated or misinterpreted events," the family said. "Sandusky was a great deceiver. He fooled everyone."
The findings could have consequences for the criminal case against Penn State athletic director Tim Curley and retired senior vice president Gary Schultz, who are awaiting trial on charges of failing to report abuse and lying to a grand jury. In addition, the Pennsylvania attorney general's office is still investigating the scandal, and others could be charged.
Sandusky, a former member of Paterno's coaching staff, is awaiting sentencing after being convicted last month of sexually abusing 10 boys over 15 years.
Freeh and his team, which included lawyers and former law enforcement officials, interviewed more than 430 people and examined more than 3.5 million emails, handwritten notes and other documents. Paterno died before he could be interviewed but testified before a grand jury.
The investigation focused largely on the university officials' decision not to go to child-welfare authorities in 2001 after a coaching assistant told Paterno that he had seen Sandusky sexually abusing a boy in the locker room showers.
Paterno and the others gave various explanations for their decision, saying among other things that they misunderstood the allegations, that they did the best they could and that this was the "humane" way to handle the matter.
But the Freeh report said: "It is more reasonable to conclude that, in order to avoid the consequences of bad publicity, the most powerful leaders at the university - Spanier, Schultz, Paterno and Curley - repeatedly concealed critical facts relating to Sandusky's child abuse from authorities, the university's board of trustees, the Penn State community and the public at large."
A number of other factors contributed to the decision to keep quiet, the report found, including "a culture of reverence for the football program that is ingrained at all levels of the campus community."
Spreading the blame around, the report also said the trustees failed to exercise oversight and didn't inquire deeply into the matter when they finally learned of it.
Spanier's lawyers Thursday denied Spanier took part in a cover-up and said Freeh's conclusion "is simply not supported by the facts." Spanier was ousted along with Paterno four days after Sandusky's arrest last November.
Attorneys for Curley and Schultz said that the investigation was flawed and that their clients would prove their innocence in court. Curley lawyer Caroline Roberto called it a "lopsided document that leaves the majority of the story untold."
Freeh said officials had opportunities in 1998 and 2001 to step in.
In 1998, police investigated after a woman complained that her son had showered with Sandusky. The investigation did not result in charges. But the emails show Paterno clearly followed the 1998 case, Freeh said. University officials took no action at the time to limit Sandusky's access to campus.
Then, after the 2001 report of Sandusky sexually abusing a boy in the showers, university officials barred him from bringing children to campus but decided not to report him to child-welfare authorities.
Some of the most damning evidence against Paterno consists of handwritten notes and emails that portray him as having been involved in that decision.
According to the report, Spanier, Schultz and Curley drew up an "action plan" that called for reporting Sandusky to the state Department of Public Welfare. But Curley later said in an email that he changed his mind about the plan "after giving it more thought and talking it over with Joe." Instead, Curley proposed to offer Sandusky "professional help."
In an email, Spanier agreed with that course of action but noted "the only downside for us is if the message isn't (heard) and acted upon and we then become vulnerable for not having reported it."
Freeh suggested it was Paterno's intervention that kept administrators from going to authorities. "Based on the evidence, the only known intervening factor ... was Mr. Paterno's Feb. 26 conversation with Mr. Curley," Freeh said.
Michael Boni, a lawyer for a boy known as Victim 1, called the report a "serious indictment against Penn State's culture and environment of protecting at all costs the football program." He added: "Nothing is shocking anymore in this case ... but the fact that the highest levels of the school made a conscious decision to cover up what Sandusky had done, it comes close. It is shocking."
Karen Peetz, chairwoman of the trustees, said the board "accepts full responsibility for the failures that occurred." She said the panel believes Paterno's "61 years of excellent service to the university is now marred" by the scandal.
The report chronicled a culture of silence that extended from the president down to the janitors in the football building. Even before 1998, football staff members and coaches regularly saw Sandusky showering with boys but never told their superiors about it. In 2000, after a janitor saw Sandusky performing oral sex on a boy in the team shower, he told his co-workers. None of them went to police for fear of losing their jobs.
Reporting the assault "would have been like going against the president of the United States in my eyes," a janitor told Freeh's investigators. "I know Paterno has so much power, if he wanted to get rid of someone, I would have been gone." He went on to assert that "football runs this university."
According to the report, Sandusky was permitted to retire from the university in 1999 "not as a suspected child predator but as a valued member of the Penn State football legacy," thus ensuring his access to football events and campus facilities. That, in turn, "provided Sandusky with the very currency that enabled him to attract his victims."
Sandusky received what Freeh called an unprecedented lump sum of $168,000 when he retired. But the former FBI chief said there was no evidence it was an attempt by the university to buy Sandusky's silence.
The report could influence investigations under way at the NCAA and at the U.S. Education Department, which is examining whether the university violated the Clery Act, a federal law that requires reporting of certain crimes on campus. The Freeh report said Penn State apparently failed to comply with the law. Neither the Education Department nor the NCAA would comment directly on the report.
George Enteen, a retired professor of Russian history, called the Freeh report a "terrible mark" on the character of Paterno, a man he otherwise respected as someone who raised a lot money for Penn State and elevated the school's reputation and academic quality.
"The worst suspicions were borne out," Enteen said. Paterno, he added, "was the key figure. If he had said, 'Report it,' they would have." But he said: "It doesn't negate all the good things he did."
Christian Beveridge, a masonry worker who grew up near Penn State, said the findings will damage Paterno's legacy.
"He built this town," Beveridge said. "All of his victories, he'll be remembered by everyone in town for a long time, but there will be that hesitation."
Scott Berkowitz, president of the Rape, Abuse and Incest National Network, said the hard-hitting report "is opening people's eyes to the potential liability that schools face if they don't address this correctly."
"Heads of every college and university in the country have got to be taking note of this, and calling board meetings today and saying, 'We need to make sure that we change the way we're doing things,'" he said.
Statement from Tom Farrell, Counsel for Gary Schultz:
"Since the Attorney General's office prevented Louis Freeh and his team access to critical witnesses with full knowledge of all of the facts, the Freeh Report is not fair, full, accurate or complete. Absent the opportunity to interview critical witnesses, including, but not limited to Mike McQueary, Chief of Police Tom Harmon and former Assistant District Attorney Karen Arnold, the Freeh Report, like the Grand Jury Presentment, does not provide a comprehensive rendition of the facts.
When the complete factual story is told before an impartial jury, it will be clear that Mike McQueary never told Mr. Schultz that he witnessed Mr. Sandusky engaging in anal intercourse with a young boy, that Mr. Schultz did not possess or maintain any secret files about Mr. Sandusky, and that there were no efforts between and among Messrs. Schultz, Curley, Paterno and Spanier to conceal Mr. Sandusky's behavior."
Statement from Caroline Roberto, Counsel for Tim Curley:
"The Freeh Group was limited in its investigation by lack of subpoena power and the reluctance of many people to be interviewed. Therefore, the Freeh Report has limited impact on the defense of Tim Curley. At the request of the Pennsylvania Attorney General, the Freeh Group did not interview critical witnesses such as Mike McQueary and others. The result is a lopsided document that leaves the majority of the story untold.
Thus, the conclusions reached in the Freeh Report are based on an incomplete record.
A complete record can and will be made in a court of law, aided by the power of subpoena, where all of the witnesses are subject to thorough cross examination. Fortunately for Mr. Curley, the Constitution guarantees that the criminal charges pending against him will be decided by twelve citizens of the Commonwealth of Pennsylvania based upon proof beyond a reasonable doubt, and not upon mere opinions drawn from limited sources.
Mr. Curley looks forward to his day in court and the opportunity to present a comprehensive slate of facts to an impartial jury, within the fair confines of a judicial proceeding where he is presumed innocent."
Statement from attorneys for Dr. Graham Spanier:
"As a former Federal Judge and a former United States Attorney, we appreciate and respect the investigative efforts of the Freeh Group and the comprehensive report they have today provided the Board of Trustees of Penn State University.
Unfortunately, Judge Freeh's conclusion, repeated often during his press conference this morning, that Dr. Spanier was engaged in a course of "active concealment," is simply not supported by the facts or by the report itself.
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. And as he told Judge Freeh himself last Friday and has steadfastly maintained, at no time in his 16 years as President of Penn State was Dr. Spanier told of any incident involving Jerry Sandusky that described child abuse, sexual misconduct, or criminality of any nature. While we disagree with certain of Judge Freeh's conclusions, Dr. Spanier joins with others in hoping that the University will never have to endure such a traumatic chapter again. This has been a painful episode in the history of a great university, and the thoughts and prayers of Dr. Spanier, and all of us, continue to be with the victims and their families."
Hon. Timothy K. Lewis
Schnader Harrison Segal and Lewis, LLP
Armas reported from Scranton and Scolforo from Harrisburg. Associated Press writers Michael Rubinkam, Marc Levy in State College and Maryclaire Dale and Randy Pennell in Philadelphia contributed to this report.