Exactly. Sounds like spin to make the college look less bad. Of course the dean's office just looks ridiculous if it truly wasn't on top of this.
Like you, I am not buy the school's poor CYA manoeuver. A simple background check would have revealed her past. Hell, someone could have run a simple google search and learned about her past! Usually, universities perform the informational equivalent of a body cavity search when considering people for faculty positions. The truth is possibly as follows: they were enamoured with her "romantic, rebl past" and hired thinking that no one would discover who she is. They got caught and now they are looking for a patsy to take the blame.