Did Gerald know?

In advance, I apologize for reading too much into this ridiculous movie.

The scene where Krippendorf pulled Gerald aside, ready to confess his misappropriation of the grant money. He starts by saying 'How long have we known each other? Twenty years.' Then Gerald tells him about the other professor who spent grant money on personal things and how he was looking at jail time. Do you think that Gerald had an inkling about Krippendorf, but, for the sake of friendship, was offering him an out by telling him about the other guy?

------Jesus loves you, but only as a friend.------