The Atlanta Journal-Constitution
Feds push inquiry linked to Sanders’ wife
Land deal that had role in college’s closing scrutinized.
A federal investigation into a land deal led by Jane Sanders, the wife and political adviser of Sen. Bernie Sanders, has accelerated in recent months — with prosecutors hauling off more than a dozen boxes of records from the Vermont college she once ran and calling a state official to testify before a grand jury, according to interviews and documents.
A half-dozen people said in interviews in recent days that they had been contacted by the FBI or federal prosecutors, and former college trustees told The Washington Post that lawyers representing Jane Sanders had interviewed them to learn what potential witnesses might tell the government.
The investigation centers on the 2010 land purchase that relocated Burlington College to a new campus on more than 32 acres along Lake Champlain. While lining up a $6.7 million loan and additional financing, Sanders told college trustees and lenders that the college had commitments for millions of dollars in donations that could be used to repay the loan, according to former trustees and state officials.
Trustees said they later discovered that many of the donors had not agreed to the amounts or timing of the donations listed on documents Jane Sanders provided to a state bonding agency and a bank. That led to her resignation in 2011 amid complaints from some trustees that she had provided inaccurate information, former college officials said.
The land deal, the officials said, became a financial albatross for the 160-student school, contributing to its closure last year.
The questions from government investigators, as described by those who were interviewed or received subpoenas for documents, suggest the investigation is focused on Jane Sanders and alleged bank fraud, and not on her husband. But the inquiry could nonetheless create a political liability for the senator, who was a candidate for the 2016 Democratic presidential nomination and is the progressive movement’s most popular leader.
A spokesman for the couple, Jeff Weaver, denied wrongdoing late last week. Weaver told The Post the couple hired a D.C. law firm this spring because they allege President Donald Trump’s Justice Department could use the investigation as a way to derail a potential 2020 challenger.
“While the Obama administration was in office, I don’t think anyone thought that these baseless allegations warranted hiring a lawyer,” Weaver said. “But with Trump and [Attorney General] Jeff Sessions at the helm, that’s a very different situation.”
The investigation began in early 2016 after Brady Toensing, a lawyer who was the state chairman for Donald Trump’s presidential campaign, wrote to the U.S. attorney and federal bank regulators, alleging potential bank fraud. FBI agents conducted interviews last year, but the probe was not publicly confirmed until this April, when the local news outlet VTDigger.org reported that a federal prosecutor had asked that records from the college be preserved.
Last week, an attorney for the Vermont Educational and Health Buildings Financing Agency, which helped the college get financing, told The Post that its executive director was asked to testify before a grand jury in April. That is the first public confirmation that prosecutors have sought to present evidence to a grand jury.
Paul J. Van de Graaf, chief of the criminal division in the U.S. attorney’s office in Vermont, cited an ongoing investigation in declining to comment on the case or on the claim that it is politically motivated. The Justice Department also declined to comment.
Burlington College grew out of gatherings in its founder’s living room in the 1970s, drawing returning Vietnam War veterans and nontraditional students. Former administrators lauded the school’s small size and the opportunity for students to design their own academic plans.
Jane Sanders became its president in 2004, with the promise of boosting its profile and its fundraising. By 2010, Sanders was pushing the college to move from its storefront campus to waterfront property that belonged to the local Roman Catholic diocese.
The move would cost the college $10 million.
Jane Sanders told trustees that the college could afford it, former trustees said. She projected a surge in enrollment in the coming year and presented financial documents showing $2.6 million in “confirmed” donations, two former trustees said. The donors were identified only by their initials — presumably to protect their anonymity, former trustees said.
The board decided to pursue the land purchase in May 2010. “The board made the decision based on the information Jane provided,” said Adam Dantzscher chairman of the board at the time.
The college soon got a $6.7 million loan with the help of the Vermont Educational and Health Buildings Financing Agency, which issues tax-exempt bonds for schools and hospitals.
In addition to providing the donation spreadsheets to the agency, Sanders signed a document saying the college “expects to receive pledged amounts” of about $2.27 million, records show.
“My gut was, this is biting off more than you can chew,” said Charly Dickerson, one of two board members who voted no after hearing a presentation from Jane Sanders. “Their balance sheet was not all that strong.”
People’s United Bank bought the bond, meaning the bank became the lender. The college promised to pay the remaining $3.65 million to cover the entire $10 million purchase to the diocese over 10 years.
The donations were critical. An independent consultant warned in a report to the state bonding agency that the college’s ability to repay its loans from People’s United and the diocese “depends on its ability to raise sufficient capital through its capital campaign.”
But only months after the college closed on the property purchase, trustees sensed problems.
“Things did not add up,” Dantzscher said. “The donations were not coming in.”
Trustee David V. Dunn said the college collected only about $125,000 through the summer of 2011. The trustees asked other college administrators to get in touch with donors, he said.
“What they were finding was different than what was represented,” he said. “Multiple donors were saying they had never committed to those amounts.”
One of the listed donations, for example, was a $1 million gift from Corinne Bove Maietta, a member of a wellknown Burlington family. In fact, trustees learned, the $1 million had been intended as a bequest upon her death.
Maietta’s accountant, Richard Moss, confirmed the bequest and said his client went on to donate between $50,00 and $100,000, a gift that was to be subtracted from the bequest. Moss said FBI agents contacted him in February or March for help in locating Maietta.
Maietta did not return a message from The Post.
By October 2011, the trustees asked Sanders to resign, in part because of the fundraising flap.
For her part, Sanders touted major accomplishments in her October 2011 report to college trustees, such as providing financial aid to students, expanded academic offerings and improved accreditation. “We have come a long way over the past seven years, and we should be proud of what we have achieved,” she wrote.
Four months after Toensing’s letter last year urging the U.S. attorney’s office to investigate, the college closed under financial distress, and the bank foreclosed on the property. It is unclear whether the bank lost money. People’s United spokeswoman Cynthia Belak declined to discuss the deal, saying that “as a matter of policy, we do not comment on matters related to our clients.”
The diocese said in a statement that it was “satisfied” with a settlement it reached with the college on repayment of the $3.65 million loan: In addition to the more than $540,000 in principal payments made on the loan, the college agreed to give the diocese $1.05 million in cash and another “$1 million investment” in a company it did not identify.
Dantzscher, the former college trustee who was among the donors on the list, said he considers himself a victim of financial mismanagement at the college.
“I would say everybody is a victim,” he said. “The community, the students, the employees, the board of directors. Everybody gets hurt.”
Dantzscher said he was contacted by law enforcement officials, but he declined to reveal details of the conversation. Speaking on the condition of anonymity, three other people familiar with the college’s financing said they were contacted by federal authorities.