Vermont GOP official requests federal probe into Jane Sanders fraud allegations

Burlington College President Jane O’Meara Sanders. Photo courtesy of Burlington College.

Former Burlington College President Jane O’Meara Sanders. Photo courtesy of Burlington College.

BURLINGTON — Vermont GOP Vice Chair Brady Toensing, a Charlotte attorney, is asking federal officials to investigate alleged fraud by former Burlington College President Jane Sanders.

In a Jan. 10 letter sent to the U.S. Attorney for the District of Vermont and the Federal Deposit Insurance Corporation (FDIC) Inspector General, Toensing asks that they investigate “what appears to be federal loan fraud” by Sanders in Burlington College’s 2010 purchase of the former Roman Catholic Diocese of Burlington headquarters.

Sanders, as president, helped the college secure loans to buy the former diocese property located on 33-acres of lakefront. She resigned in 2011 as doubts emerged about her ability to raise donations and expand enrollment to pay for the purchase.

In the years that followed, more than $1 million in confirmed donations listed by Sanders in loan documents never materialized, as previously reported by VTDigger.

When the diocese settled a loan with the college last year, the church lost as much as $2 million, according to financial statements from the diocese obtained by VTDigger.

Burlington College could not afford the new campus, and nearly went bankrupt before selling much of the land to developer Eric Farrell last year. Farrell recently inked a development deal with the city to build housing on a portion of the land.

Toensing’s firm, diGenova & Toensing LLP, sent the complaint letter on behalf of Wendy Wilton, a parishioner with the Immaculate Heart of Mary in Rutland, and other “aggrieved Vermont parishioners.”

Toensing writes that the “apparent fraud” led to significant financial losses for the church, and that Sanders’ “privileged status” as the wife of a senator “inoculated” her dealings from proper scrutiny. “This privileged status, however, should not inoculate her from the scrutiny, culpability and accountability of a federal investigation,” he writes.

Reached by phone Monday, Jane Sanders declined to comment. Michael Briggs, a spokesman for the senator’s presidential campaign, said in an email later Monday that, “As Bernie gains in national polls showing him defeating Republican presidential candidates, it is not surprising that Republican operatives are slinging mud at him and his family.”

Briggs dismissed the allegations as “recycled, discredited garbage” and highlighted Toensing’s connections to the Vermont Republican Party. “Attacks” like the ones leveled by Toensing are “one of the reasons why the American people are so disgusted with politics in America today,” Briggs added.

Jane Sanders has not responded to multiple interview requests from VTDigger in the past year and previously declined to answer a set of written questions about loan documents which bear her signature.

Burlington College

Burlington College, and the former headquarters of the Roman Catholic Diocese of Burlington. Photo by Phoebe Sheehan

Toensing and Wilton, a 2012 Republican candidate for state treasurer, said Monday that the letter was not motivated by partisanship or a desire to hurt Sanders’ presidential campaign. Instead, they hope it could potentially help the church recoup its losses through the legal system, they said.

“I don’t expect anyone from (Sanders’) party is going to be raising these issues,” Toensing said. “The complaint I put together is driven by facts. People can read those facts and draw their own conclusions.”

Toensing writes in the letter that the losses “materially” impact the church’s charitable activities, and Wilton says they have impaired “(the diocese’s) ability to fulfill their very important social mission.”

Bishop Christopher Coyne and Rev. Msgr. John McDermott did not respond to requests for comment Monday. Wilton said she would not speculate as to why church officials haven’t raised the loss as an issue.

U.S. Attorney Eric Miller said in an email that his office does not comment on public requests for criminal investigations. “Every such request is evaluated for appropriate action, and my office is committed to enforcing federal law in a neutral and impartial manner,” Miller added.

Messages sent to the FDIC Inspector General’s office requesting comment were not returned Monday.

Sanders involvement in the Burlington College land deal

In loan documents from 2010, Sanders overstated the pledged donations of at least two people listed as confirmed donors in a list of pledges used to secure a $6.7 million from People’s United Bank, according to a VTDigger investigation.

People’s United Bank has previously refused to comment on the loan, which was settled when the college sold the land to developer Eric Farrell.

Toensing writes in the complaint that it’s impossible to know how much money People’s United Bank lost on its loan (that information is not public), but ultimately that’s irrelevant, he says because federal banking laws don’t require that fraud materially impact the lending institution, only that the deception was intentional.

Ultimately, the school only collected $676,000 of the $2.14 million Sanders listed in confirmed pledges, sending the school into dire financial straits and resulting in the sale of much of the lakefront property last year. Sanders resigned in 2011 under pressure from the board of trustees, who still gave her a $200,000 early exit package.

The diocese also loaned Burlington College $3.65 million in 2010 to help the school afford the $10 million purchase price for the land. Financial statements from the diocese show it wrote off $996,000 in principal payments on that loan, and did not receive between $593,000 and $923,000 in interest payments accrued during the life of the loan, which was settled earlier this year — a total of as much as $2 million.

Church officials have refused to comment on the losses, but Chief Financial Officer Martin Hoak did not dispute that the loan was not fully repaid.

Instead he argued that the property was only worth $6 million, and that therefore “funds received above that amount are a premium, and any amounts not collected on the loan reduces our premium, but are not a loss.”

However, Boston-based Joseph J. Blake and Associates appraised the property for $11.9 million in 2010 and at that time the city of Burlington valued the property at $19.8 million.


Morgan True

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