It is maddeningly easy to commit felony bank fraud. All it takes is for natural optimism to find it’s way into a bank loan application. The story of Jane Sander’s peril in an FBI investigation follows. Jane is the wife of Bernie, the socialist from Vermont. Harry Jaffe, a writer from the area tells the story of the fall of Burlington College and Jane Sanders. The title is “Jane Sanders Lawyers Up” and was published by Politico.
Bernie Sanders was in the midst of an interview with a local TV reporter early last month when the senator fielded an unexpected question about an uncomfortable matter.
“There’s an implication, and from at least one individual, an explicit argument that when they called for an investigation into Burlington College that you used your influence to secure a loan from People’s United—”
The senator cut him off.
Sanders is used to fielding softball questions from an adoring local press, but his inquisitor, Kyle Midura of Burlington TV station WCAX, had a rare opportunity to put him on the spot. Investigative reporters had been breaking stories about a federal investigation into allegations that the senator’s wife, Jane Sanders, had committed fraud in obtaining bank loans for the now defunct BurlingtonCollege, and that Sanders’s Senate office had weighed in.
Sanders had never responded to questions about the case, but he took the bait this time. Briefly.
“Well, as you know,” he said, “it would be improp— this implication came from Donald Trump’s campaign manager in Vermont. Let me leave it at that, because it would be improper at this point for me to say anything more.” …
… Sanders and his wife have been trying to ignore the federal investigation since reporters for VTDigger, an online publication, confirmed the FBI’s involvement in April. The original request for an investigation into the potential bank fraud did indeed come from 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. (Toensing, in an email to Politico Magazine, notes, “The investigation was started more than a year ago under President Obama, his Attorney General Loretta Lynch, and his United States Attorney, all of whom are Democrats.”)
Now, Senator Sanders and his wife are taking the case more seriously. Jeff Weaver, Sanders’ longtime top political adviser who heads Sanders’ political organization, Our Revolution, confirms to Politico Magazine that Bernie and Jane Sanders have lawyered up. The couple has retained Rich Cassidy, a well-connected Burlington attorney and Sanders devotee, and Larry Robbins, the renowned Washington-based defense attorney who has represented I. Lewis “Scooter” Libby and disgraced former Rep. Bill Jefferson, to represent Jane Sanders in the matter.
Now, President Donald Trump’s Justice Department is handling an investigation that will proceed at the discretion of a U.S. attorney of Vermont that Trump has yet to appoint. …
… The couple met and fell in love during Sanders’ startling 10-vote victory in Burlington’s 1980 mayoral race. His victory uprooted the Democratic machine in Vermont’s largest city and elevated an unabashed socialist at a time when Republicans across the U.S. started using liberal as an epithet. At the time, she was 31. He was her first husband; she was his second wife. For the next 23 years, she worked as his professional sidekick, enforcer and strategist. While he was mayor, Jane Sanders directed Burlington’s youth services division. When he ran for the House in 1990, she managed his campaign, then ran his congressional office as chief of staff. But when the chance came to step out and build her own legacy in 2004, she pounced and became president of BurlingtonCollege. …
… On January 10, 2016, in the midst of Sanders’ sudden stardom—just weeks before the votes in Iowa and New Hampshire—the U.S. attorney for Vermont was sent a “Request for an Investigation into Apparent Federal Bank Fraud.”
Backed by six exhibits and a dozen documents, the four-page letter described how Jane Sanders had “orchestrated” the purchase of 33 acres along Lake Champlain in Burlington, Vermont’s largest city, where her husband had minted his populist political brand as mayor. The deal closed in 2010, when the senator’s wife was president of BurlingtonCollege, a tiny, obscure, nontraditional school that always seemed to be struggling for students and funds. The letter alleged that to secure a $10 million loan and execute her grand plan to expand the college, Jane Sanders had falsified and inflated nearly $2 million that she’d claimed donors had pledged to repay the loans.
Sanders had “successfully and intentionally engaged in a fraudulent scheme to actively conceal and misrepresent material facts from a federal financial institution,” the letter alleged. It pressed for a federal investigation into potential bank fraud.
Bernie and Jane Sanders shrugged off the charges. Reporters, mesmerized by the rumpled Vermont senator’s razor-thin margin in Iowa and crushing defeat of Clinton in New Hampshire, ignored the letter. The allegations got no traction on the trail. …
… Jane Sanders took over in 2004 as a self-described “turnaround” president. Steeped in alternative schooling, she had earned her undergraduate degree at GoddardCollege, a slightly larger alternative school in Plainfield, Vermont, that offers a “holistic” approach to higher education. She got a doctorate in leadership studies in politics and education at Union Institute and University, an accredited nontraditional school based in Ohio that specializes in distance learning.
Sanders had big plans for BurlingtonCollege. As president, she immediately wanted to grow the student body and campus. “In 2005 she said that increasing numbers was vital because tuition dollars would help pay for the overall plan she was developing,” (Greg) Guma wrote in his deeply researched 2016 essay, Paradise Lost: The Fall of Burlington College. “As it turned out tuition dollars rose, but the number of students didn’t.”
In 2006, Sanders announced a $6 million plan to expand the campus. That plan never materialized. At the same time, faculty and students began to bridle at Sanders’ leadership style. In the four years since she had taken over, two dozen faculty and staff had left the tiny college. The Student Government Association in late 2008 described a “toxic and disruptive environment on campus.” Nearly half of the students and faculty members signed a petition demanding a meeting about the “crisis in leadership.” Even so, Sanders’ salary rose to $150,000 in 2009, according to college records, as tuition increased by $5,000, to $22,407 in 2011, and enrollment dropped to 156 students.
Sanders’ 2008 dismissal of Genese Grill, a popular literature professor, exposed more of the college’s inner turmoil. In a letter to the school’s academic affairs committee, Grill described what she termed Sanders’ “harassment and unethical treatment of other faculty and staff members, many of whom have since left the college disgruntled and angry.” The American Association of University Professors noted the school’s lack of a formal grievance policy for faculty and offered to help create one. Sanders declined. She told reporters at the time that the guidelines would have been for tenured faculty and “would be extremely difficult to do at such a small college.” …
… Brady Toensing was never one to miss an opportunity.
While Berniemania consumed most Vermonters—starting during his decade as Burlington mayor and continuing through his statewide campaigns for the House and Senate and 2016 presidential run—Toensing appreciated Sanders’ political skills but balked at his positions. The 49-year-old lawyer has conservative politics in his blood.
His mother, Victoria Toensing, is one of the most committed conservative lawyers in Washington, D.C. She was Barry Goldwater’s chief counsel from 1981 to 1984, and served in Ronald Reagan’s Justice Department. She later married Joseph diGenova, a storied lawyer who investigated Mayor Marion Barry while serving as U.S. attorney for the District of Columbia during the Reagan administration. The two now run diGenova & Toensing, a law firm active in conservative causes (both had cameos on Fox News when they represented the whistleblowers in the Benghazi attacks). Though he lives and pays taxes in Vermont, Brady Toensing is a partner at his mother’s Washington-based law firm.
For more than a decade, Brady Toensing has been vice chair of the Vermont Republican Party. He chaired Donald Trump’s campaign in the GreenMountainState and remained loyal even as more moderate elected Republicans vowed not to vote for Trump. Known in Vermont political circles as a jocular, entertaining activist, he’s constantly on alert for cases where he can slip the knife into Democratic politicians. In 2013, when news broke that then-Governor Peter Shumlin might have taken advantage of a neighbor in acquiring land, Toensing took the neighbor’s case. But the rise of Bernie Sanders clearly stuck in his craw—especially given what he considered to be the lack of scrutiny Sanders enjoyed.
So it was no surprise that Toensing scrutinized Jane Sanders’ rise and fall at Burlington College.
On July 7, 2014, Seven Days, a Vermont alternative weekly newspaper, published a deeply reported (There’s that “deeply” guy again- Pkrhd) piece by Alicia Freese about Burlington College’s plummeting fortunes. The New England Association of Schools and Colleges had put it on probation because of the school’s shaky finances. The college was about to sell off land to defray its mounting debt.
Two weeks after Freese’s piece appeared, Toensing requested loan documents from the Vermont Educational and Health Buildings Finance Agency that had issued the $6.5 million bonds for the land. The August 1 response from the bonding agency produced a trove of documents that detailed how Jane Sanders convinced the bank and the church that Burlington College could pay back its millions of dollars in loans. …
… In hindsight, it’s hard to avoid blaming Jane Sanders for the Burlington College fiasco. She took over a struggling-but-functioning institution and set it on a course that led to its demise. But in a state where Bernie Sanders is sacrosanct, no one was—or is—eager to unload on his wife.
Carol Moore, a veteran Vermont educator, lowered the boom in an essay published by the Chronicle of Higher Education in September 2016. “BC’s fate was set when its former board members hired an inexperienced president and, six years later, approved the imprudent purchase of a $10 million piece of property for campus expansion,” Moore wrote. “Enrollment that year was about 195 and the budget just over $4 million, less than half of this ill-advised investment. What were they thinking?”
She then suggests an answer: “Who is to blame for this appallingly inappropriate business deal? Perhaps a board that steered clear of the tough questions which needed to be asked. Or a bank in the state of an influential senator—a senator, as it turned out, with bigger ambitions?” …
… Hiring a lawyer is no admission of guilt, but it does speak to the potential seriousness of the federal investigation. “It would be negligent for anyone involved in the matter to not retain counsel,” Weaver tells Politico Magazine.
Charges of bank fraud, say legal experts, are not easy to prove. “It requires that the act be performed knowingly,” says William Lawler, a former federal prosecutor now with the law firm Vinson & Elkins. “Not every mistake is going to rise to the level of a crime.”
As yet, the investigation has not concluded. Once FBI or other federal agents present the results of their investigation to federal prosecutors, the top lawyers will have discretion on whether or not to bring charges.
Once the federal investigation concludes, the Justice Department will decide whether or not to bring charges—which some worry will give Donald Trump a chance to affect the course of action.
That gives President Donald Trump a chance to affect the course of the investigation and potential for prosecution, as Trump’s Department of Justice—led by Attorney General Jeff Sessions, a longtime senatorial colleague of Bernie Sanders—will make the call on whether to prosecute the wife of a senator who has been deeply critical of this president and once called him a “pathological liar.”
Trump’s largest potential impact on the case, though, could come in his choice of U.S. attorney for Vermont—a post that has been awaiting a nominee since the resignation of Obama appointee Eric Miller in February. This week, Vermont Senator Patrick Leahy, a Democrat, and Governor Phil Scott, a Republican, recommended that Assistant U.S. Attorney Christina Nolan become the state’s next U.S. attorney. …