Vermont Senator Bernie Sanders and his wife Jane O’Meara Sanders have hired attorneys in response to an FBI investigation into a 2010 bank loan, Politico Magazine reported on 22 June 2017.
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.
The probe stems from a long-running series of allegations by Brady Toensing, a Vermont attorney who was the chairperson of then-candidate Donald Trump's campaign in the state in 2016.
Toensing claimed that Jane Sanders, when she was president of the now-defunct Burlington College, lied about pledged donations to the school in order to obtain a loan to purchase a $10 million property owned by the Catholic Diocese of Burlington as part of an expansion of the college.
In a 2016 letter to the U.S. Attorney for Vermont, Toensing wrote:
In 2010, Jane Sanders, then-President of Burlington College and wife of United States Senator Bernard Sanders, orchestrated the college's purchase of the Diocese's headquarters property for $10 million dollars. To finance the purchase, Ms Sanders sought approval from the Vermont Educational and Health Buildings Finance Agency (VEHBFA), which voted to issue tax exempt bonds for the transaction. Those bonds were purchased by People's United Bank in the form of a $6.5 million dollar loan to the college along with a $3.65 million second mortgage from the Diocese.
The loans were contingent on the college providing proof of a minimum commitment of $2.27 million in grants and donations prior to the closing...As the college president, Ms. Sanders submitted what she claimed was evidence of $2.6 million in confirmed grants and donations...
The letter claims, however, that the forthcoming funding cited in the loan application did not materialize.
At the end of the fiscal year 2011 (six months after closing on the loan), Ms. Sanders had collected only $279,000 in donations, which was less than 25 percent of the $1.2 million Ms. Sanders guaranteed to the bank that she would have collected in that year.
...By the end of fiscal year 2014, of the $2.6 million Ms. Sanders guaranteed to the bank as confirmed donations, the college had collected only $676,000, a shortfall of almost $2 million. As a consequence, the school failed to meet required loan benchmarks and defaulted on its loan from the Diocese.
Jane Sanders resigned as president in the fall of 2011, and the small liberal arts college shut down in May 2016.
The federal investigation could include an examination of actions taken by Bernie Sanders. According to Politico, a second letter sent to Justice Department officials in early 2016 alleged that the Senator's office had improperly pressured the People's United Bank to issue the loan at the heart of the case. However, the Washington Post reported that Bernie Sanders is not personally under investigation.
We requested comment from Bernie Sanders, through his U.S. Senate Office, and Jane Sanders, through her non-profit organization the Sanders Institute. Neither had responded by press time.
On 24 June 2017, the Vermont Senator played down the story in comments made to the Washington Post.
This was a story that just, amazingly enough, came out in the middle of my presidential campaign, initiated by Donald Trump's campaign manager in Vermont. That's about it. I don't think it'll be a distraction.
In an interview with Vermont TV channel WATX in May 2017, Sanders called the allegations "nonsense," but appeared to confirm the investigation and declined to comment any further.
Sanders: This implication came from Donald Trump's Vermont campaign manager, 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.
WATX reporter Kyle Midura: You've previously said it was nonsense.
Sanders: Yes, it is nonsense. But now that there is a process going on, which was initiated by Trump's campaign manager - somebody who does this all of the time, has gone after a number of Democrats and progressives in the state - it would be improper at this point for me to add any more to that.