A loan that Jane Sanders helped secure for the now defunct Burlington College is back in the news after revelations that Sanders and her husband, Bernie, have retained lawyers to deal with a federal investigation into it.
The federal FBI probe is looking into whether a multi-million dollar loan for a college land purchase was properly obtained. Bernie Sanders’ top adviser Jeff Weaver confirmed to CBS News that “the couple has sought legal protection over federal agents’ allegations from a January 2016 complaint accusing then-President of Burlington College, Ms. Sanders, of distorting donor levels in a 2010 loan application for $10 million.”
Although the loan controversy first emerged during Bernie Sanders’ presidential campaign and the investigation was requested by Donald Trump’s Vermont campaign chair, an independent website in Vermont reported in April 2017 that a federal investigation had been launched into the loan, ramping up the investigation talk. The Sanders deny wrongdoing.
Here’s what you need to know:
Jane Sanders always greets Bernie with a kiss. (Getty)
Jane Sanders’ tenure as president of tiny Burlington College was beset with controversy even before the college went belly up after becoming saddled with debt it couldn’t afford. When Jane Sanders took over at the helm of Burlington College, the school was already struggling financially, but it did have a respected and innovative vision: An alternative educational structure in which students designed their own majors.
By 2011, not long after obtaining a loan for a major expansion of the college and seven years after becoming president, Sanders resigned her position. “Members of Burlington College’s Board of Trustees were trying to force the president out because they were unhappy with her fund-raising record,” reported Inside Higher Ed, adding that Sanders left the school with a $200,000 buyout.
The center of allegations against Jane Sanders: A loan that Sanders, as college president, obtained for a swath of prime lakefront land once owned by the Catholic Church. The allegations focus on accusations that Jane Sanders was not honest about the school’s financial ability to pay back bank loans the college received to finance the land purchase.
In a lengthy story on June 22, 2017, Politico reported that the initial complaint seeking a federal investigation originated with Brady Toensing, “an attorney who chaired Trump’s Vermont campaign, and whose January 2016 letter to the U.S. attorney for Vermont put federal agents on the trail,” but added that Toensing noted the investigation started under the President Obama administration.
According to Politico, a local website called VTDigger had confirmed in April that the FBI was investigating the loan. Now, reported Politico, “Bernie and Jane Sanders have lawyered up.”
You can read Toensing’s letter that got the ball rolling here.
The letter said that Toensing represented a Catholic parishioner and was requesting an investigation into what “appears to be federal loan fraud involving the sale of the Roman Catholic Diocese of Burlington headquarters (33-acres of prime, lake-front property) to Burlington College.”
Alleged Toensing, “The loan transaction involved the overstatement and misrepresentation of nearly $2 million dollars in what were purported to be confirmed contributions and grants to the college.”
The letter contends that, in 2010, Jane Sanders, then President of Burlington College, “orchestrated the college’s purchase of the Diocese headquarters property for $10 million dollars.” Jane Sanders sought approval from the Vermont Educational and Health Buildings Finance Agency, which “voted to use tax exempt bonds for the transaction.” The People’s United Bank purchased the bonds in the form of a loan to the college and second mortgage from the Diocese.
To get the loan, alleges the letter, Sanders submitted what she claimed “was evidence of $2.6 million in confirmed grants and donations.” However, by the end of fiscal year 2011, six months after loan closing, she had collected only $279,000 in donations, and, by the end of fiscal year 2014, the college had collected only $676,000 in the donations and “failed to meet required loan benchmarks and defaulted on its loan from the Diocese.”
Toensing also alleged that Sanders’ “privileged status as the wife of a powerful United States Senator seems to have inoculated her from the robust underwriting that would have uncovered the apparent fraudulent donation claims she made.”
Although reporters largely ignored the letter at the time, Politico reports that a federal investigation was indeed launched. “Federal investigators and FBI agents started to pull apart the $10 million financial arrangement. They showed up at Burlington College to sift through hard drives, audit reports and spreadsheets. They began to interview donors, board members” and a past president, reported Politico.
Politico also documented problems with the listed donors: “Sanders listed two people as having confirmed pledges for more money than they had offered; neither knew their pledges had been used to support the loan. A third donor had offered a $1 million bequest, to be paid upon her death. Instead, the college’s loan application counted it in funds to be paid out over the next few years,” the site reported.
According to VTDigger, one “donor says that former Burlington College President Jane Sanders mischaracterized the terms of a gift the donor planned to give the institution. Corinne Bove Maietta, a member of the famed Burlington Bove’s Restaurant family, said she agreed to give the college an unspecified amount upon her death. Documents show, however, that Sanders put her down for a series of cash payments.”
In 2004, Jane was named the president of Burlington College. (Getty)
Bernie Sanders has attempted to deflect questions about the probe by pointing out that it was requested in a 2016 letter by Toensing, Donald Trump’s campaign chair in Vermont.
Toensing is the son and stepson of Victoria Toensing and Joseph DiGenova, former prosecutors whose criticisms of Democrats, especially of Bill Clinton during the Monica Lewinsky scandal, are well known and earned them frequent television appearances.
Toensing works for their law firm. According to Politico: “His mother, Victoria Toensing, is one of the most committed conservative lawyers in Washington.” Both Victoria Toensing and diGenova frequently appear on national television programs to bolster Republican causes, and they were especially prolific during the Clinton years and investigations.
Victoria Toensing has represented a Benghazi “whistleblower,” and “was named Special Counsel by the U.S. House of Representatives to probe the International Brotherhood of Teamsters. In 2007, Toensing was retained by the New York State Senate to investigate then-Gov. Eliot Spitzer in the Troopergate matter,” her law firm bio says.
Victoria Toensing spent time as a prosecutor in the Reagan Justice Department. “As Deputy Assistant Attorney General in the Criminal Division of the U.S. Justice Department from 1984-1988, she established Justice’s Terrorism Unit,” her law firm bio says. She was also chief counsel for Republican senator Barry Goldwater.
In 1998, The Washington Post called Toensing and her husband, diGenova, “The Power Couple at Scandal’s Vortex.” The Post described their criticism of the Clintons and wrote that diGenova was a “white-hot media presence, politically connected lawyer and all-around agent provocateur. He and Toensing, also a battle-tested former prosecutor, keep popping up wherever there is trouble — as commentators, as investigators, as unnamed sources for reporters.”
The Post described how Victoria Toensing and diGenova were involved in criticism over Bill Clinton’s affair with Monica Lewinsky. Victoria “Toensing was approached by an intermediary for a Secret Service agent who had supposedly seen something untoward involving President Clinton and the former intern. DiGenova was at the heart of a quickly retracted Dallas Morning News account of that matter,” the Post reported.
Joseph diGenova is the former U.S. Attorney for Washington DC. According to his law firm bio, “He led the prosecution of Israeli spy Jonathan Pollard. He was the Principal Assistant U.S. Attorney during the prosecution of attempted Presidential assassin, John W. Hinckley.”
Brady Toensing inherited his mother’s conservative views. In 2016, Toensing called Bernie Sanders a hypocrite on Twitter because of his purchase of a new lake home. “Sanders is proselytizing socialist. Yet profits from $200K golden parachute and pays cash for 3rd home. Hypocrite?” he wrote.
According to his law firm bio, Brady “Toensing represented the government of the District of Columbia and the Director of its prison system in Section 1983 cases in Superior and Federal Courts involving the deaths of two prisoners sent to a private prison.” His bio added hat he “devised the argument that allowed the Firm’s client to be dismissed from the federal case based on qualified immunity and won a stay of proceedings in Superior Court based on this argument.”
Some of his cases involved Ruby Ridge and the Clintons.
“Mr. Toensing has represented clients in a number of Congressional investigations, including Clinton White House Pardon issues, Ruby Ridge, Waco, and during the Senate Permanent Subcommittee on Investigations inquiry into tax shelters,” his bio says.
He received his law and undergraduate degrees from Georgetown University. “Before joining diGenova & Toensing, Mr. Toensing worked for United States Senator Warren B. Rudman,” his bio says.
