New Reporting about Jane Sanders and the FBI Investigation

Last week, I reported on two news stories coming from VTdigger and Seven Days, two independent Vermont news media organizations. The stories indicated that there has been an ongoing federal investigation into the collapse of Burlington College. The Seven Days story indicated that specifically, the investigation is focused on Jane Sanders and the bank loan she negotiated for the college under potentially fraudulent and/or potentially improper circumstances. This week, the story has been picked up by Vermont Public Radio and the Burlington Free Press, two much larger—but still Vermont-specific—news organizations. And Paul Heintz at Seven Days has a new story with more information.

Heintz tracked down a college donor in Florida who says the FBI contacted him about a gift he made to the college:

The semiretired orthopedic surgeon had moved from Vermont to Florida five years earlier, but his association with the shuttered liberal arts college — and the wife of a United States senator who served as its president — had followed him to the Sunshine State. When he returned home to his gated community later that afternoon, Leavitt found two Federal Bureau of Investigation agents waiting for him with plenty of questions about a $30,000 donation he had made to the school.

"It was a little strange," he said of the unexpected visit.

…Neither the FBI nor the U.S. attorney for the District of Vermont would comment on the matter. But according to Carol Moore, who served as the college's final president until it closed last May, an FBI agent who contacted her "three or four weeks ago" called it "an ongoing investigation."

Moore said the focus of the feds' questions was clear: "Was there any collusion between Jane Sanders and the bank?" Moore said, quoting the FBI agent. "Did she falsify records in order to get the loan from the bank?" Moore said the focus of the feds' questions was clear: Did [Jane O'Meara Sanders] falsify records in order to get the loan from the bank? click to tweet

Heintz further notes that spokespeople for the diocese, the bank, and for former board of trustees, among others, declined to comment on the investigation.

Jane Sanders, however, made comment via Jeff Weaver:

But in an unusual statement issued Monday through the digital services firm Revolution Messaging, former Sanders presidential campaign manager Jeff Weaver noted that Republican operatives were behind the request for an investigation.

"Jane has not been contacted by the FBI or any other authority and only knows as much as news reports indicate," Weaver said in the statement, which noted that he was "speaking for the Sanders family."

In an emailed statement to the Burlington Free Press, Weaver had a slightly different message.

"In the middle of Bernie's presidential campaign, the vice-chair of the Vermont Republican Party asked for a federal investigation of Burlington College," Weaver wrote, referring to Toensing's letter. "Jane has not been contacted by the FBI or any other authority and only knows as much as news reports indicate. Jane served as president of the college from 2004 to 2011. In the five years following her departure, the college experienced major turnovers in leadership, staff and its Board of Trustees."

This statement much more strongly suggests that Sanders is laying the blame for the college’s problems on Carol Moore, who succeeded her as president. Moore has previously placed the blame for the college’s demise on the bank loan that Sanders acquired. In a September letter to the Chronicle of Higher Education, Moore wrote:

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. 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? Where was the Finance Committee when these decisions were being made?

More interestingly, what bank lends a small, private, unendowed college of that size and financial status an amount that so obviously outweighs its ability to repay? People’s United Bank of Vermont. And the collateral? One planned gift of a revocable trust, payable upon the death of the donor, and the “promise” of another million-dollar gift. But, alas, no written record of such a “promise” could be found, anywhere in Burlington College’s records.

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?

While not directly connecting Bernie Sanders to the loan, Moore certainly suggested in her last line that Jane’s relationship to him may have influenced the bank to give the college what, in retrospect, looks like an appallingly irresponsible amount.

I provide the material about Moore as context for Jeff Weavers’ statement, and the not–terribly-subtle finger pointing back at Moore, who had been left trying to attract the new students that Jane Sanders had promised the college could recruit in order to help pay back the loan. Moore is also one of the main sources for the quotes suggesting that the FBI questioning was focused on Sanders. The other is Coralee Holm, Burlington College's former dean of operations and advancement.

Obviously there is a lot of blame-shifting going on here. I don’t have any special insight into who did what, but the search for guilty parties in the college’s closure is much more serious with the feds involved, and with possible criminal charges on the table.

Thus far, the national media still has not picked up the story in any serious fashion. (I note in passing how unlikely that would be for any political figure with the last name Clinton.) But the reporting from larger Vermont outlets, and the release of a statement, suggests that Jane knows how explosive this may be, and is aware she can't totally ignore the story. Not only is Bernie himself up for re-election in Vermont in 2018, they now lead a movement. There is a nation-wide constituency depending on them to be trustworthy spokespeople for a message of economic populism.

And there is cause for concern in regards to Bernie Sanders’ claim that he can attract Trump voters with his economics-focused message.

Because there is one type of media outlet that was all over this story at the weekend — right wing blogs. I’m not going to link to any of that trash, but Gateway Pundit, David Horowitz’s FrontPageMag, the Daily Caller, Red State, Heat St and a slew of other smaller sites have been reporting and commenting on this, screaming that it proves Bernie Sanders is a hypocrite, a crook and so forth, and most especially that it somehow proves his socialism is a sham.

Clearly, that’s a bunch of bigoted garbage, heavily flavored with anti-Semitism. None of these claims make sense. But it really doesn’t matter to the people who consume this propaganda. What is does mean is that Sanders’ imagined credibility with the right is currently under assault from the usual suspects. As far as I can tell, this hasn’t climbed up the ladder to the biggest outlets like Fox, Breitbart, or (Maude forbid) Info Wars. It may only be a matter of time, and who knows what the story will look like once its run through that mangle.

Again, Bernie and Jane need to get their ducks in a row. It doesn’t look like this story is going to go away any time soon. And more than their personal reputations are riding on them being able to credibly refute the garbage the right is getting ready to toss their way.

For one, Sanders’ claims about his attractiveness to right-leaning voters will need some re-examining if this story ends up (however unfairly) staining him as just another “establishment” hypocrite, cozy with banks. But of even more concern is how it may affect the wider progressive movement he says he is leading, and the candidates he is supporting as the Democrats attempt to increase their congressional delegation in 2018.

It’s not just about you, Bernie and Jane. Get ready for this, for all of our sakes.