Catholic Parishioners In Vermont Claim The Wife Of Bernie Sanders Lied To Get A Sweetheart Loan From The Catholic Diocese Of Burlington
Catholic parishioners in Vermont want the wife of Bernie Sanders investigated for federal bank fraud. A letter sent to the U.S. attorney Eric Miller in January and to a similar letter sent to the Office of the Inspector General of the FDIC.
The plan didn’t work out as well as Jane Sanders had hoped. Burlington College found itself unable to make its loan payments within a year after getting the loan. The Roman Catholic diocese sold the land to help pay for a $17 million sexual-abuse settlement.
The Diocese ultimately lost between $1.5 million and $2 million.
Catholic parishioners claim Sanders misrepresented the amount pledged to the college in its fundraising push. Aggravated parishioners have called for an investigation by the U.S. Attorney’s Office in Burlington. They have also requested an investigation by the FDIC for bank fraud.
Bank fraud is a federal crime. Sanders could face 30 years in prison and a $1 million in fines if found guilty.
Sanders Campaign Dismisses Allegations As Hogwash
The only comment made by the Sanders campaign was in a statement to WCAX in January. The Sanders campaign called the allegations “recycled, discredited garbage” and election-year mudslinging.”
The presidential campaign of Bernie Sanders tried to deflect the allegations. They did it in typical political fashion:
These kinds of attacks on family members of candidates are one of the reasons why the American people are so disgusted with politics in America today.
How The Deal Went Down
Burlington College turned to the Vermont Educational and Health Buildings Finance Agency (VEHBFA) to finance the deal. VEHBFA is a state entity that issues tax-exempt bonds to help libraries, health-care facilities, and educational institutions.
Sanders claimed in the application to VEHBFA that Burlington College had received more than $2 million in fundraising commitments and pledges.
The college was able to receive help from VEHBFA to secure a loan from People’s United Bank by making this claim.
People United Bank gave Burlington College a $6.7 million tax-exempt loan. The arrangement required a minimum commitment of $2,270,000 in grants and donations prior to the closing of the deal. People’s United Bank also made the loan contingent upon the minimum commitment of $2.27 million of grants and donations from Burlington College.
The bond purchase agreement, loan agreement, and tax certificate and agreement note were all signed by Sanders. All three documents stated that the college would receive $2.27 million or in fundraising commitments and grants during the loan period.
The Catholic Diocese of Burlington underwrote a second loan of $3.65 million to cover the difference for the property acquisition. The Diocese agreed to be in second lien position behind People’s United Bank.
It Soon Became Clear Jane Sanders Lied
It soon became clear after closing that Sanders’ fundraising claims had been exaggerated. Burlington College stated to both People’s United Bank and VEHBFA it had confirmed pledges of $1.2 million. Yet, it only raised $279,000 in the fiscal year 2011
Sources from the college defend the wife of Bernie Sanders to Street Heat by claiming:
Burlington College received an anonymous bequest, which the college leadership understood would include an immediate cash gift of $1 million, with the possibility of additional future donations, the source says. But the donor backtracked, in part because her investment adviser recommended against it, this person said. Two other potential large donors made promises for significant gifts but “in the end, these simply did not materialize.”
In 2011, it became clear Burlington College was not going to be able to live up to financial commitments in 2011 and stopped making payments on the second mortgage. The Diocese began imposing heavy penalties on the college. It claimed Burlington College had defaulted on the loan. The Diocese eventually took a financial hit of between $1.6 million and $2 million in principal and interest on the loan.
Jane Sanders’ House Of Cards Begins To Collapse
Sanders resigned from Burlington College with a $200,000 golden parachute as her house of cards began to collapse.
The regional accrediting agency placed Burlington College on probation for two years in 2014. The agency cited its unstable finances, budget deficits, and increasing debt. Burlington College’s finances became so unstable it almost didn’t make payroll in 2011.
In order to avoid bankruptcy and make payroll, the college sold off 27 acres of the former diocese property to a Vermont real-estate developer.
Brady Toensing wrote letters to both the FDIC and to U.S. Attorney on behalf of Burlington’s Catholic parishioners. He believes the political status of Jane O’Meara Sanders as the wife of Bernie Sanders helped Burlington College acquire the land. Jane Sanders’ status also helped the deal escape the scrutiny other prospective borrowers would have received.
The wife of Bernie Sanders also made other decisions that smack in the face good old fashioned political cronyism. According to Vanity Fair,
“Sanders’s wife’s tenure as the president of Burlington College will certainly raise eyebrows. During her time there, the college paid nearly $500,000 to the Vermont Woodworking School, run by her daughter, Carina Driscoll, for classes. The college also paid tens of thousands of dollars to an all-inclusive Caribbean resort run by Jonathan Leopold, the son of a family friend, for a study-abroad program. Between 2009 and 2011, when O’Meara Sanders stepped down, Burlington College paid around $68,000 to the resort. The payments to both the woodworking school and the resort stopped soon after she left.”
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