Subpoena confirms feds’ focus is Burlington College land deal

Sanders

Sen. Bernie Sanders, I-Vt., with his wife, Jane Sanders. Photo by Gage Skidmore/Wikimedia Commons

BURLINGTON — The lending agency that issued tax-exempt bonds to help finance Burlington College’s purchase of a lakefront campus received a grand jury subpoena from federal prosecutors in April.

James Foley, who serves as general counsel to the Vermont Education and Health Buildings Finance Agency, provided VTDigger a copy of the subpoena, which was first obtained by The Washington Post.

Seven Days reported in May that the agency received a grand jury subpoena, but the document is the first concrete evidence that the U.S. attorney may be presenting a case to a grand jury.

It also provides new information about the nature of the federal probe, confirming that investigators are scrutinizing the land deal orchestrated by former Burlington College President Jane Sanders, wife of U.S. Sen. Bernie Sanders, I-Vt.

A former employee of the defunct college has previously reported receiving a subpoena in February 2016 demanding similar information, but that subpoena never became public. Federal officials have refused to confirm a probe is underway.

Emails obtained through a VTDigger public records request in April revealed that the FBI was investigating.

The subpoena of the Vermont finance agency demands records related to Burlington College’s 2010 purchase of the former Roman Catholic Diocese of Burlington property for $10 million, including “any and all fundraising efforts, pledges, donations” related to the purchase or the loans that supported it.

In 2015, VTDigger reported that Jane Sanders overstated pledged donations used as collateral to obtain $6.7 million in tax-exempt bonds from the finance agency, which were backed by People’s United Bank. A year later the school closed, with officials citing the weight of debt from the land purchase as the proximate cause.

It’s unclear whether the U.S. attorney has begun presenting information to a grand jury or is merely compiling information for the investigation. Kraig Laporte, a spokesman for the office, declined to say.

“The grand jury process in general is a confidential and private process,” Laporte said. “The only way we’re going to comment on any type of investigation or inquiry is if charges result.”

Any charges would come in the form of an indictment by a grand jury.

Burlington College sign

Burlington College’s former North Avenue campus. File photo by Mike Dougherty/VTDigger

David Kirby, a former U.S. attorney for the district of Vermont, said Monday that he recently joined the legal team helping Jane Sanders navigate the probe.

Kirby declined to comment on the Burlington College case. He did say that, in general, a grand jury subpoena is a standard way for federal prosecutors to gather information prior to an indictment. It doesn’t necessarily mean prosecutors have begun presenting their case to jurors, Kirby said.

Kirby, who served for two decades in the U.S. attorney’s office, said it was exceedingly rare for a grand jury to be convened specifically to hear the evidence in a certain case.

Instead, the district of Vermont has a regularly empaneled grand jury that hears cases for up to 18 months, though it’s typically swapped out annually to reduce the burden for jurors, who give up a day each week to weigh evidence in federal cases, Kirby said.

A cover letter for the Vermont Education and Health Buildings Finance Agency subpoena signed by acting U.S. Attorney Eugenia Cowles states that a “personal appearance is not required” and a CD, DVD or mailed documents could suffice.

However, the accompanying form filled out by an assistant U.S. attorney calls for someone from the finance agency to appear in court April 27 at a specific time to “testify before the Court’s grand jury.”

Foley, the agency’s lawyer, said that once he contacted the U.S. attorney’s office it became clear that as long as he provided the records, it wouldn’t be necessary for Executive Director Robert Giroux to testify.

“They really weren’t looking for his testimony, although that’s the way the document was framed,” Foley said.

According to Foley, the records the finance agency provided to the U.S. attorney are essentially the same as those provided to VTDigger and other entities that have previously made public records requests about Burlington College, including CNN and the Republican National Committee.

As a public lending entity with the ability to issue tax-exempt bonds, the Vermont Education and Health Buildings Finance Agency is subject to the state’s Public Records Act.

The subpoena says any questions can be directed to Special Agent Michael Eaton with the Federal Deposit Insurance Corp. Foley said he got a call from Eaton after fulfilling the subpoena in which the agent asked why the lending agency didn’t have more correspondence detailing how such a complex financial transaction came about.

Foley said he told Eaton the agency is a conduit lender, meaning it’s essentially a pass-through used by borrowers to access tax-exempt bonds.

As a result, none of the negotiations between Burlington College and People’s United Bank looped in the lending agency, Foley said. All the agency received was the finalized loan document and others laying out the agreement.

Once the agency’s board voted to approve the loan, it became “a direct relationship between People’s and the college after it left our office,” Foley said.



Morgan True

Morgan True is VTDigger's Burlington bureau chief covering the city and Chittenden County. A Seattle native, he graduated from Boston University with a Bachelor of Science in Journalism before working for several publications in Massachusetts. Read more

Email: mtrue@vtdigger.org

Follow Morgan on Twitter @true_morgan

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