It's standard operating procedure in American management to bring up the accusations to the accused, even if obliquely, and give the accused the right of reply. (Part of it is to observe how the accused reacts to the accusations.) That's standard operating procedure period. A player is not an assistant coach, and an assistant coach is not a player. Sandusky was not Paterno's star player, he was Paterno's subordinate.
Therefore, it's reasonable to assume that Paterno brought the matter up to Sandusky. To assume the opposite is just too unreasonable given standard American bossing practice.
That leaves us one of two options:
1. Sandusky was a sociopath who showed the sociopath's notorious skill with conning people, including the boss. In this case, Paterno was one of his victims. It's even less reasonable to expect an athletic director to marshal the alertness and training required of police officers and jail guards, who are specifically trained to see through a sociopath's con maneuvers. If Sandusky's a sociopath, then an innocent man (Paterno) was hung.
2. Sandusky is not a sociopath, but yet another garden-variety (if particularly heinous) criminal. Non-sociopathic criminals exhibit "tells" that an ordinary person can pick up on. If Sandusky is not a sociopath, then Paterno should have spotted enough oddness to warrant a call for an outside investigator. Consequently: if Sandusly is not a sociopath, then Paterno deserved what he got.
Obviously, the sledgehammer of public opinion squares with #2.
I imagine around 1998, Paterno learned about Sandusky, they made an agreement that Sandusky would “retire”, in exchange for PSU sweeping what happened under the carpet....they figured that from there the problem would just go away.
But Sandusky didn’t go away, he flaunted his leverage knowing that the Administration wouldn’t dare do anything to him, lest their image be blown to smithereens. That’s why he was still allowed to access the campus facilities. Call it a case of “Mutually Assured Destruction.” And the longer it went on, the worse it got, and the worse it would be once the news came up, as most cover-ups go, things just snowballed from there.