[B]URLINGTON — The Justice Department was investigating the activities of the now-defunct Burlington College as recently as February, according to emails obtained through a public records request.
The emails show the U.S. attorney for Vermont and an FBI agent reviewed Burlington College records in the state’s possession earlier this year pursuant to an investigation. Both enforcement agencies declined to comment on the substance of that probe or whether it has been completed.
“It’s typical for us not to comment or to confirm whether or not there’s a current investigation. We would not comment on any active investigation,” said Kraig LaPorte, a spokesman for the U.S. attorney’s office. An FBI spokeswoman cited a similar policy.
The chair of the Burlington College board of trustees said Thursday that the FBI investigation has been going for more than a year, and at least one former school employee was subpoenaed as part of the probe.
In January 2016, after reporting by VTDigger showing former Burlington College President Jane Sanders overstated pledged donations in applying for a loan so the school could purchase its former North Avenue campus, Republican lawyer Brady Toensing made a formal request to the U.S. attorney for a fraud investigation.
The Vermont Agency of Education took possession of records left at the college in the wake of its sudden closure in May. When a college closes, state law requires the school or the state to keep academic records so students can obtain transcripts and graduate certificates.
Burlington College opted to let the state handle that process. Agency officials said they found the school’s records in disarray, in part because of an unsolved burglary. The state, as a result, took possession of nonacademic records as well as the student records it was required to take.
In November, Toensing requested an index of the records in the state’s possession. Education officials provided a list showing business records, board materials such as meeting minutes dating back to 1998, and records relating to the school’s accreditation.
Toensing then filed a public records request for some of the documents, which was denied on the basis that the nonacademic materials were not Agency of Education records.
The emails obtained by VTDigger show that, on Dec. 16, three days before rejecting Toensing’s request, Agency of Education attorney Molly Bachman sent an email to Burlington College attorney Robert Roesler asking for permission to destroy the records or for school officials to come collect them.
Roesler responded: “My initial impression is that some of those records need to be retained, but perhaps not all. … If we can find a place to store them, we probably will take the financial records, at least.”
Chief Deputy Attorney General Bill Griffin is copied on that exchange, in which Roesler stated that he spoke with Griffin about the situation.
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.”
Van de Graaf told Bachman the U.S. attorney would pay for the state to extend its lease on the property where the records were being stored. Bachman then drafted two resolutions for the Burlington College board to approve.
One resolution gave the U.S. attorney permission to “review and take possession” of the records being stored by the Agency of Education. The second authorized the Agency of Education to destroy any records that remain in its possession. Both are signed by Burlington College board Chair Yves Bradley and dated Dec. 28.
Van de Graaf and another lawyer with the U.S. attorney’s office began sifting through the Burlington College records Jan. 4, according to the emails.
On Feb. 2, Bachman told Van de Graaf that FBI special agent Patrick Hanna had requested an additional month to review the Burlington College records. She asked Van de Graaf to make sure he had the records he needed before March 1, so the state could begin shredding whatever remained.
The FBI spokesman VTDigger spoke with declined to say what Hanna does for the bureau.
Bachman said this week that the Agency of Education has now destroyed the remaining nonacademic records from Burlington College.
Bradley, the board chair, said Thursday that he was aware of an FBI investigation into Burlington College for more than a year. He said he and other board members were informed of the inquiry by Coralee Holm, who was at that time dean of operations and advancement.
Holm and others connected to the college were subpoenaed by the FBI, according to Bradley. Agents told Holm she could inform the board of trustees that an investigation was taking place, but she was directed not to provide any further information, Bradley said.
Holm, who is now public information officer for South Burlington, did not return a call seeking comment Thursday.
Bradley said he had no contact with the FBI or U.S. attorney — except through the college’s lawyer — and was not aware of who else was subpoenaed.
Toensing said he still believes the records the agency held should have been released.
On Dec. 19, the Education Agency told him in an email that it was “in the process of returning the records to the college,” and his request for access was denied on the grounds that “these are not the agency’s records, but rather the records of a private corporate entity.”
Toensing, who was already embroiled in three public records lawsuits with the state, chose not to appeal the decision, despite disagreeing with it. “These records were acquired in the course of agency business, which makes them public records under the law,” he said.
Griffin, at the attorney general’s office, who is battling Toensing over public records on other fronts, said that only the academic records from Burlington College were obtained in the course of agency business, and therefore the denial was justified.
“In the course of business you look at the statutory authority and responsibility of the Agency of Education, and they focus on academic records,” Griffin said Thursday. “The other records belong to the college.”
Toensing said he believes it was misleading for the state to say it was in the process of returning the records to Burlington College.
“I understood the denial as telling me that the records were on their way back to Burlington College. Looking back, I believe this impression was intentionally created to dissuade me from pursuing these records,” Toensing said.
“The state now routinely engages in a taxpayer-funded war of attrition to block access to public records,” he added.
The loan fallout
“These records are of significant public interest because they are relevant to an improper loan that led directly to the college’s demise,” Toensing said.
Bradley, the board chair, said he has no information about what the FBI is investigating. Still, he speculated that the probe indeed relates to the school’s purchase of its former North Avenue campus.
“At the end of the day, it’s got to relate back to the purchase of the land by the college,” he said.
Two other board members, Tom Torti, with the Lake Champlain Regional Chamber of Commerce, and Jane Knodell, Burlington City Council president, said they had had no contact with the FBI and were aware of the federal investigation only through the resolutions approved in December.
Torti said he too suspected, based on “rumors” he had heard, that the investigation related to the 2010 purchase of the Burlington College campus.
Asked to describe the rumors, Torti said they related to “the purchase of Burlington College and how the money came about, going back to what a lot of us scratched our heads about who came to the board after (the purchase), which was what were they thinking and how did this all make sense financially.”
Jane Sanders, wife of Sen. Bernie Sanders, I-Vt., overstated donation amounts in a bank application for a $6.7 million loan the college used to purchase a prime 33-acre property on Lake Champlain in 2010.
She told People’s United Bank in 2010 that the college had $2.6 million in pledged donations to support the purchase of the former Roman Catholic Diocese of Burlington property.
The college, however, received only $676,000 in actual donations from 2010 through 2014, according to figures provided by Burlington College.
Two people whose pledges are listed as confirmed in the loan agreement told VTDigger that their personal financial records show their pledges were overstated. Neither was aware the pledges were used to secure the loan.
Jane Sanders did not respond to a request for comment Thursday asking whether she was subpoenaed or otherwise contacted by the FBI or the U.S. attorney in relation to her time as president of the college.
Projected increases in enrollment at the college never occurred, and as the college’s finances began to crumble, the school began to sell off its property to developer Eric Farrell. Farrell, who is expected to own the entire property — minus 12 acres he sold to the city for a park — recently received city approval for a massive residential development on the land.