The Christmas lights are up. Jumbo snowflakes — blue and white, the school colors — dangle from the lampposts on Beaver and College avenues. On Thursday night, the mayor ordered the switch thrown to illuminate the city’s Christmas tree. On the surface, it’s the holiday season.

But this place that calls itself Happy Valley is in anguish.

Penn State has been gut-punched by the Jerry Sandusky child-rape accusations. The day of the tree-lighting ceremony, the NCAA sent a searing letter to the university’s interim president saying that it had opened an investigation of the school’s handling of the case.

The NCAA said that if the allegations against the former assistant football coach are true, “individuals who were in a position to monitor and act upon learning of potential abuses appear to have been acting starkly contrary to the values of higher education.”

Few people could have imagined that Penn State, of all places, could face such an inquiry. The university has prided itself on doing things the right way, of adhering to old-fashioned values, of having a football program that doesn’t cheat. Players went to class, they earned diplomas. These were the good guys. “Success with Honor” was the Penn State mantra.

Now this place is a target of scorn and ridicule. The situation is open-ended. State and federal investigators continue to look into who knew what and when about Sandusky’s actions. No one expects this to be over soon.

“Where’s this going to stop? How do we solve this? How does the wound ever stop bleeding?” James Ryan, a vice president emeritus at the university, said Friday.

He said people want the guilty punished and the innocent exonerated — and right now it’s hard to tell who’s who. Some here say that this place will pull itself together, that the community is resilient. Others are still stunned, depressed, unsure what to say or do. Or what to believe anymore.

This is an agonizing moment, for example, for Kip Richeal, a former student equipment manager at Penn State who became a close friend of Sandusky and eventually co-wrote Sandusky’s memoir, “Touched: The Jerry Sandusky Story.”

“It’s troubling and disheartening to find out a friend of yours had a double life,” said Richeal, who now lives in western Pennsylvania.

He and Sandusky talked in the spring after the story broke that a grand jury was looking into child sex abuse allegations against the former coach. Sandusky professed his innocence then, but they haven’t spoken since his arrest.

“I honestly wouldn’t know what to say,” Richeal said.

Said State College Mayor Elizabeth Goreham, “Our town is heartbroken.”

The grand jury said Sandusky, a former defensive coordinator for the Nittany Lions, assaulted underage boys he contacted through the Second Mile, a charity he founded to help troubled youths. He was charged with assaulting eight boys over the course of 15 years.

In the wake of those charges, the winningest head coach in the history of big-time college football, Joe Paterno, has been fired, as has the university president, Graham Spanier, who had been a rock star in academia. Two top administrators face perjury charges. The head of the Second Mile has resigned.

These men were the revered architects of a great football team, a stellar athletic program, a thriving charitable organization, and a university system that had rapidly expanded and improved its stature on the national scene. Now their reputations are in tatters and their life’s work threatens to crumble before their eyes.

The Second Mile

At the heart of the tragedy is the charity Sandusky started in 1977. At first he had just 45 local kids in the program. It now boasts that it helps 100,000 youths a year in Pennsylvania. The Second Mile’s survival is in doubt; it must contend with the widespread suspicion that, despite whatever good deeds it may have done, it was founded by Sandusky as a mechanism for meeting troubled kids.

Sandusky’s attorney did not return phone calls and messages. Sandusky, 67, gave an interview to NBC last week and said he is innocent. He said he had showered with boys but is not a pedophile.

It is hard to find anyone who found Sandusky persuasive in the interview. Here at Penn State, the horror could not be more total — a beloved charitable institution may have grown from a malevolent seed.

“We’re in the realm of evil genius,” Michael Bérubé, who holds the title of Paterno Family professor of literature at the university, said Friday during an interview on campus. Bérubé said it appears to him that Sandusky used his credentials in the athletic department to build up the Second Mile and then seamlessly incorporated his philanthropic work to recruit and then abuse underage boys.

“It was such a great cover,” Bérubé said. “And by great I mean the most repugnant thing we’ve ever seen, so beyond anything we could ever imagine. This has totally ruined our legitimacy.”

Sandusky’s charity has close connections to the university. The university’s former top lawyer, Wendell Courtney, went to work for the Second Mile. He resigned from the charity after the scandal broke, and he declined to be interviewed for this article.

Three university trustees have contributed to the charity, a review of government records shows. The wife of a trustee emeritus is on the charity’s board.

Leslie Dutchcot, the district judge who was originally assigned to the Sandusky case and who let the coach go free on a $100,000 bond, recused herself last week after news reports that she had contributed to the Second Mile.

At the door of the Second Mile, a packet of written statements provided for the news media was sprinkled with new-fallen snow. One is the resignation letter of the group’s chief executive, Jack Raykovitz. Another is a statement by the charity expressing shock and horror over the recent developments.

The Second Mile postponed a Nov. 11 fundraiser, saying in a written statement that “we cannot imagine holding this event in the wake of the recent allegations, which have brought shock, sadness and concern to all associated with The Second Mile organization.”

On the charity’s Web site, the “History” page has no mention of who started it.

The ‘Grand Experiment’

This has been an extraordinary drama for a place that has sometimes seemed frozen in time. Paterno started coaching here as an assistant in 1950. He became head coach in 1966. His teams weren’t flashy, and the uniforms were militantly plain, with no names on the jerseys.

Off the field, he had a strict dress code for his players. There was a famous moment before the 1987 Fiesta Bowl. At a pregame social event, University of Miami players, who reveled in their bad-boy image, showed up in camouflage fatigues. The Penn State players showed up in jackets and ties.

Paterno won that game for his second national title. His 409 victories set an all-time big-college record that, given the high-stress, hyper-competitive nature of the game these days, seems unlikely to be surpassed.

He achieved this while maintaining his status as a tenured professor, one who lived in a modest house near campus, drove a car that he bought used and took vacations to the Jersey Shore with his wife, Sue, whom he’d met in the college library. All five of their kids went to Penn State.

Twenty-six times, Paterno could point to one of his players and say that he’d coached that kid’s dad.

Paterno had long talked about his “Grand Experiment” to find an honorable marriage between athletics and academics. His kids graduated at rates far above the national average for football players.

“People thought Penn State wore white to the wedding and even after the wedding,” said Charles Yesalis, a Penn State professor emeritus of health and human development. He’s an expert on college athletic scandals, having written about them for years.

“I’m 65, and this is the biggest college scandal in my life,” he said.

The grand jury did not indict Paterno, and prosecutors said he is not a target of the investigation. But the grand jury report was devastating nonetheless to Paterno and his program. One of his former starting quarterbacks, Mike McQueary, who after graduation became an assistant on his staff, testified that he saw Sandusky raping a boy, approximately 10 years old, in a shower in the locker room.

McQueary testified that he told Paterno about the assault. Paterno discussed the incident with athletic director Tim Curley and Gary Schultz, a vice president who oversaw the university’s legal and police departments. Curley and Schultz later met with McQueary but testified that they did not know the extent of the assault in the shower. President Spanier testified that he was notified of the incident by Curley and Schultz. No one went to the police.

The university decided to take away Sandusky’s key to the locker room, ban him from coming to campus with children and report the situation to the Second Mile.

Curley and Schultz have been charged with perjury and failure to report the incident to police. Spanier has not been charged with a crime.

Bérubé, the professor, said: “We really thought we were exempt. We went from a school with no NCAA violations to a school that coddled and enabled an alleged child rapist.”

A campus in shock

Rumors have circulated on campus that authorities will show up one night to take away the statue of Paterno. The new athletic director denied that there were plans to remove it. But the Big Ten has decided to remove Paterno’s name from its Stagg-Paterno Championship Trophy.

More grim news came Friday: Paterno’s son, Scott, said his father had visited the doctor last weekend for a follow-up exam after a bronchial infection and learned that he has lung cancer. Scott Paterno said it is a treatable form of the disease.

In the first days of the scandal, the 84-year-old coach spoke to students rallying outside his home near campus. Now there’s no sign of anyone at the house. The curtains are tightly closed. At night, the glow through the curtains gives the house the appearance of a jack-o-lantern.

The other men caught up in the scandal are highly respected and have spent years building up Penn State as a football powerhouse and an internationally known university. All of the men involved have seen their names removed from monuments to their careers.

Curley, 57, was just shy of celebrating his 18th year as athletic director. He oversaw massive growth in the athletics program, millions in donations and 21 NCAA championships. In June, the National Football Foundation named Curley the country’s top athletic director.

Soon after Curley was charged, that honor was rescinded.

Curley would not speak for this report, but a spokeswoman for his attorney arranged for an interview with Mark Murphy, a former Washington Redskin who is now president of the Green Bay Packers and knows Curley from when both were athletic directors in the Big Ten. “He’s a person of high character,” Murphy said.

Schultz, 62, is another Penn State lifer. Schultz retired in 2009, then returned when his successor departed for another job. Schultz was honored in September at a ceremony dedicating the new, 21,500-square-foot Gary Schultz Child Care Center.

Earlier this month, a sign near the front entrance to the multimillion-dollar facility was vandalized. Now, the sign is blank. There is no mention of Schultz. There are no words at all.

Schultz would not comment, but Ryan, the emeritus vice president, vouched for his character. “I think Gary will be exonerated,” Ryan said, “just knowing the man, knowing his character, knowing his integrity.”

Spanier, 63, had been well-liked on campus. He oversaw 96,000 students and 46,000 employees on 24 campuses while making time to perform with student music and theater groups, advise the magic club and sub for the Nittany Lions mascot at sporting events. His wife, Sandra, is on the faculty; their two children graduated from Penn State.

Spanier’s high school in Illinois this week removed a plaque honoring him as a distinguished alumnus.

‘A heaviness, a tension’

How do you rebuild after this? People are making gestures. Stores sell T-shirts with Penn State logos and a pledge to give $5 to a charity to help abused children. People are saying that this doesn’t mean it can’t be Happy Valley anymore.

But a bleak winter approaches. The campus went on fall break at the end of the week, and so State College is emptier than usual. There are no more home football games this fall; the team is doing well, but football suddenly seems secondary to everything else.

Jerry Sandusky lives at the end of a cul-de-sac. On the other side of the chain-link fence in his back yard is the playground of an elementary school.

“There’s a heaviness, a tension in the neighborhood,” said a neighbor with three young children who did not want her name publicized. “I’m having trouble sleeping.”

She’s caught only fleeting glimpses of her neighbor. He walks the Sandusky family St. Bernard, Beau.

She didn’t believe the news when she heard it. Then she read the grand jury report in its entirety. She’s haunted by it. She thought about Sandusky’s alleged crimes when she comforted her 8-year-old son after he had a nightmare.

“How could anybody hurt a child in that way?” she said.

In Sandusky’s front yard, “No trespassing” signs warn away visitors. There’s an artificial carved pumpkin on the stoop. A window is boarded up; someone threw a cinder block through it. The bushes are sprinkled with shattered glass.

Johnson and Achenbach reported from Washington. Staff writer Mary Pat Flaherty and staff researchers Madonna Lebling and Julie Tate contributed to this report.