[B]URLINGTON — Former Burlington College trustee Joel Miller denied any impropriety and disputed any conflict of interest when he invested in prime waterfront property the struggling college sold while he was also serving on the board.
Miller told VTDigger Wednesday that he loaned developer Eric Farrell money for one of Farrell’s purchases of Burlington College land, but said no “inside deal” was involved. Claims by fellow board members that he acted unethically investing with Farrell had left him “absolutely sick,” he said.
“I don’t think there’s anything unethical about what I did, nothing,” Miller said. “I didn’t benefit from anything. This sale that Eric had with the bank had nothing to do with the board. I don’t even think the board was involved.”
The New York Times broke the news of Miller’s investment Saturday, a revelation which surprised and upset fellow former board members. Former trustee Jane Knodell said that she thought Miller’s decision to invest while also on the board was not “appropriate or ethical.”
“It just has an appearance of profiting individually from very difficult circumstances facing an organization to which you have a fiduciary responsibility, and a responsibility to help that organization succeed,” Knodell said Monday.
Farrell bought 27 acres from the college in 2015, a move the college hoped would improve its financial struggles. A year later, the college shut down and Farrell secured the additional six acres after the closure.
Farrell’s $80 million development, Cambrian Rise, includes more than 700 condominiums on the prime waterfront land.
Miller said that he loaned Farrell money in 2015, but said he did not remember how much he invested.
“I didn’t invest in the building, I loaned money to somebody who was buying from the bank, who was going to do something with the property,” Miller said. “I may never see a return on this, this is 15 years away, 20 years away.”
Miller said he was on the college board for 12 years and discussed his investment with individual members of the board, none of who mentioned they believed it was a conflict. He didn’t identify who he spoke with.
“The school was going to fold, the school owed the bank a lot of money, they had a buyer, the buyer needed investors,” he said.
At the same time he denied any wrongdoing, Miller backtracked from his statement in the Times that other members of the board had also invested with Farrell.
“I don’t know, and if I did know, I wouldn’t say,” he said.
Miller said his tenure on the board was supposed to end in 2015, but he agreed to stay on for another year through the college’s closure. He said the combination of the New England Association of Schools and Colleges stripping the school of its accreditation and the bank being unwilling to loan the school any more money led to the college’s closure.
“The school lost its accreditation, the school was in big debt to the bank.” Miller said. “It was public information, there was no secret here, there was no secret dealing.”
The disclosure of Miller’s investment came to light as part of a Times story about Jane Sanders’ tenure as president of Burlington College and whether the college’s closing would impact the presidential run of her husband, Sen. Bernie Sanders.
While Jane Sanders was college president, Burlington College purchased a 33-acre parcel of prime waterfront being sold by the Vermont Catholic Diocese to settle sex abuse claims. The land purchase, part of an ambitious expansion, and the debt were later blamed for the college’s demise.
The 2010 land deal also triggered a probe by the federal government into whether Jane Sanders had inflated pledges the college received from donors as collateral for the loans.
The college had paid $10 million for the approximately 33 acres and borrowed $6.7 million from People’s Bank when it bought the land in 2010. The Catholic Diocese also provided a $3.6 million loan. The “crushing debt” caused by those loans and the failure to increase enrollment were blamed for the college’s demise. Both the bank and the diocese lost money on the deal when the college went under.
A spokesperson for Sanders said last year the investigation concluded with no charges being brought. Sanders was forced out in 2011, less than a year after the college purchased the land.
Miller said the story about his investment was “nonsense” and that “nobody’s covering” the big story — why People’s United Bank approved a $6.7 million loan in 2010.
“How does a bank loan this kind of money to a school that has no money, how does that happen?” he said.
Yves Bradley, the former chair of the college’s board of trustees, told VTDigger that board members were “incredulous” that Miller had invested in the deal.
“Whether it’s an investment opportunity or not, it doesn’t seem like it’s a wise thing to invest in a land deal that is going on with a college that is failing, that you are on a board of,” Bradley, a commercial real estate agent, said Monday.
Farrell said he did not believe there was a conflict of interest as he negotiated the sale with former Burlington College interim president Mike Smith and accountant David Coates, and not the board of trustees itself.
“I would say, unequivocally, there was no conflict of interest,” Farrell said Monday.
Miller said that he couldn’t explain why his fellow trustees were so critical of his decision to invest.
“They’re making such a big deal out of this,” Miller said. “I’ve had private conversations with them asking them if they were getting involved, and they said no. And that was it.” He did not identify the other board members.
Miller, a retired psychologist married to Jogbra co-founder and former state Sen. Hinda Miller, said there were factual errors in the VTDigger story about his investment, but said he was not “going to go into” what those were.
Miller said he prides himself in his service to the community, including stints serving on the boards of the Howard Center and Vermont Public Interest Research Group.
“I feel badly because I put pride into my reputation, and this is making me absolutely sick,” Miller said. “And it just gives people stuff to read and talk about, but there is no story. There is no inside story.”