Almost exactly a year ago, Burlington College announced its closure over a “crushing weight of debt” it had accrued under the leadership of Jane Sanders. The school borrowed heavily during her years as its president, as Sanders planned an expansion of the campus and aimed to eventually fill the gaps through fundraising, but the donors never materialized, leading her to resign in 2011. The issue arose in the final weeks of the presidential primary campaign of her husband Bernie, and raised questions about her judgment and that of her husband.
It turns out that those weren’t the only questions that arose over Burlington College’s collapse. The Daily Caller and other outlets report that the FBI and FDIC have conducted a series of interviews that point to an investigation into the Burlington’s finances and certain representations made by Sanders about contributions:
Allegations Jane Sanders falsified loan documents to expand the campus of Burlington College, which collapsed into bankruptcy in May 2016, swirled more than a year prior. The Daily Caller News Foundation first broke the news of the allegations against Mrs. Sanders in March 2015. The Department of Justice and the FBI will not confirm the existence of an investigation, but recent interviews conducted by officials from the FBI and the Federal Deposit Insurance Corporation (FDIC), independently confirmed to TheDCNF, suggest an investigation is ongoing.
Sanders wrote on a 2010 loan application that 83-year-old Corinne Bove Maietta, the daughter of the founders of Bove Restaurants in Burlington, pledged $1 million to Burlington College over five years. Maietta, who has a property in West Palm Beach, says it was not a pledge but an unspecified bequest to be paid to the school upon her death. …
Sanders stated in a 2010 loan application she had secured $2.6 million in promised donations to pay for the land purchase, which helped secure a $6.5 million loan from the People’s United Bank. Only $676,000 ever materialized over the next four years and the college defaulted on the loans, eventually going bankrupt in May 2016.
That discrepancy seems guaranteed to get the attention of the FDIC, perhaps primarily so, as an investigation into capital losses that could impact the solvency of the bank. That’s one of the FDIC’s core missions — to ensure that bad loans don’t drive the US into another crisis of the kind seen in the now-defunct FSLIC in the savings and loan industry criss in the late 1980s. One loan with an underfunded contribution of that extent from a bank with nearly $40 billion in assets won’t precipitate a crisis, but it’s not exactly chump change, either.
That doesn’t necessarily mean that the investigation has targeted anyone for bank fraud, but the partnership with the FBI certainly suggests that it goes beyond a probe into an incompetent lending decision, too. That information comes from both the Daily Caller and a Vermont blogger named Morgan True writing at VT Digger, which the Daily Caller says it has independently verified. True found evidence of the Department of Justice’s involvement through a FOIA request that produced e-mail evidence of “interviews” stretching back into last year, and some as recent as February. The e-mails discussed the dispositions of stored records of the school, which the state secured after Burlington’s closure but wanted to get off their hands in December:
After it became clear the remaining college trustees could find nowhere to put the 150 banker boxes of records the state wanted to get rid of, Roesler emailed Bachman on Dec. 21: “You are aware there is a DOJ investigation into some aspects of the College’s activities.” Roesler added that the Agency of Education had permission from Burlington College to shred any records the U.S. attorney didn’t want.
In a Dec. 22 email, Paul Van de Graaf, chief criminal lawyer for the U.S. attorney’s office, wrote to Bachman: “I think we need to make sure there is nothing significant to our federal investigation before (the records) are destroyed.”
The Daily Caller confirmed with Maietta that interviews continued into “March or April” of this year, which seems like a fairly lengthy period of time to dig into a seven-year-old loan declaration. Another on-line publication in Vermont, Seven Days, reported last week that two other officials had been contacted about Sanders’ land deal, too:
Sara Adsit-McCuin, who served on the defunct college’s board for roughly three years, said Friday that she was contacted by the Federal Bureau of Investigation “a couple of weeks ago.” During an in-person interview, two FBI agents focused their questions on Burlington College’s 2010 purchase of a 32-acre campus overlooking Lake Champlain. At the time of the deal, O’Meara Sanders was serving as the college’s president.
“I didn’t give them any information that they didn’t already have,” Adsit-McCuin told Seven Days.
Carol Moore, a former president of the college, told Seven Days that she, too, had been contacted “three or four weeks ago” by an FBI agent. He confirmed to her that “this is an ongoing investigation,” Moore said. …
Moore, who was Holm’s boss at the time, was aware of the FBI’s interest. She said it was clear from the start what the bureau was investigating: “Was there any collusion between Jane Sanders and the bank? Did she falsify records in order to get the loan from the bank?”
The DoJ is refusing to comment on whether an investigation is open or not, as per its usual policy. A few months before the closure, Washington DC-based lawyer Brady Toensing requested that both the local US Attorney and the FDIC investigate the circumstances of Sander’s land deal, and it could just be that both agencies are still continuing due-diligence efforts to respond to Toensing’s complaint. Nothing at all may come of it, and none of the reporting so far suggests that the DoJ has begun a grand jury review of the matter. Still, none of this looks good either, and the records that have emerged certainly paint a very curious picture about Sanders’ stewardship.