Since Curley and Schultz were going to report Sandusky back in ‘98, and then Curley changed his mind after talking to Paterno, I have a hard time believing Paterno was that naive.
I suspect Paterno was such a powerful intimidating figure and getting up their in age that no one wanted to confront the guy and put their career in jeopardy I suspect the coaching staff were concerned about their career path that they knew enough about Paterno to not rock the boat and hope for the best. I am just guessing their was a deep denial factor too that someone from his era like to be exist in.
Never happened. Sandusky was being investigated by the Department of Public Welfare in 1998 but the investigation was suspiciously cut short and brought to an end for no apparent reason, even though the DPW was aware of five more kids involved.
Curley did change his mind apparently in 2001, but that was after talking to Sandusky's charity CEO -- child psychologist Dr Jack Raykovitz.