Vermont Sen. Bernie Sanders is dismissing a reported FBI probe into whether his wife fraudulently obtained a $10 million loan for a Burlington College expansion as a "pathetic" and political attack.
But the complaint that supposedly triggered the scrutiny raises numerous red flags about the application that might not be so easily ignored, including the sources she listed as proof of the school's ability to repay.
The loan was arranged by Sanders’ wife, Jane O’Meara Sanders, when she was president of the now-closed college to acquire 33 acres of lakefront property to improve and expand the small, non-traditional school.
Sen. Sanders, a 2016 Democratic presidential candidate and torchbearer of the progressive movement, has alternately ignored and dismissed concerns about the deal since news of a probe broke this spring.
On Monday, Sanders rebuffed a Fox News producer’s question about whether he thinks the ordeal is politically motivated. The next day on CNN, Sanders noted the complaint was filed “coincidentally no doubt when I’m a candidate for president of the United States” by an individual connected to the Trump campaign.
Sanders, a former Burlington mayor, called the attack on his wife “pretty pathetic,” while declining to confirm whether his wife was indeed under FBI investigation.
Still, people close to the couple, including Sanders' presidential campaign manager Jeff Weaver, have confirmed that the independent senator and his wife each have retained a lawyer in connection with the case.
Jane Sanders, college president from 2004-2011, structured the loan deal in two parts — a $6.5 million loan from People’s United Bank to buy tax-exempt bonds issued by a state agency that signed off on the deal and a $3.65 million second mortgage from the Roman Catholic Dioceses of Burlington.
To secure the money, Sanders submitted a spreadsheet that attempted to show the school had $2.4 million in confirmed pledges, grants and other funds to repay the debt.
The document — obtained through a Freedom of Information Act request and listed as exhibit B in the original complaint — showed the money would come from 40 separate entries.
However, each entry was denoted only by initials, under such categories as “friends” or “faculty and staff” and with no additional documentation, according to the complaint filed to the Federal Deposit Insurance Corp.’s office of the inspector general.
Problems repaying the debt started roughly a year after the deal was signed, when the college received just $279,000 of the confirmed pledges, according to the website VTDigger.org, which first reported the loan story.
The site also reported that first entry on the spreadsheet — C.B.M. for $1 million over roughly six years — is in fact a woman named Corinne Bove Maitta who apparently said she promised the money upon her death.
The school and Maitta dispute the terms of the agreement with supporting documents now believed to be in the hands of FBI agents who have reportedly visited the school and removed records several times over the past months.
The complaint was first published in news reports; the attorney behind the document confirmed its authenticity. The original document was sent in January 2016 to the FDIC and the U.S. attorney for the district of Vermont by the law firm of diGenova and Toensing. Partner Brady Toensing, a former Donald Trump presidential campaign official, wrote the complaint — and followed up with a second letter alleging Sen. Sanders' Senate office tried to influence the deal.
That letter provided little detail. However, a source told Fox News on Wednesday that a former People’s United Bank executive openly complained at a luncheon that Sanders’ office pressured the bank to approve the loan, saying “make it happen.”
Sanders’ Capitol Hill office on Wednesday did not respond to requests for comment. The FBI declined to discuss the matter, citing a pending investigation.
“Much of the attention has been focused on whether Mrs. Sanders has violated any laws in connection with the bank loan. But Senator Sanders may have to worry about ethics violations of his own, if the bank loan was not provided on a commercially reasonable basis, but because of Mrs. Sanders’s relationship to a United States senator,” Caleb Burns, a partner at the Washington law firm Wiley Rein specializing in election law and government ethics, said Wednesday.
In fall 2011, Burlington College negotiated Sanders' resignation that included a $200,000 severance package.
The college sold off some of the acreage along Lake Champlain to stay afloat. But the bank called the loan in spring 2016. And the school closed amid the debt, declining enrollment and related problems at the new waterfront campus.
The law firm filed the complaint as the legal representative for several “aggrieved Vermont parishioners” and asked U.S. officials to investigate “what appears to be federal loan fraud,” as a result of the apparent “overstatement” or “misrepresentation” of confirmed contributions and grants.
Toensing said the Diocese lost $1.6 million to $2 million in principal and uncollectable interest in the deal and the bank’s losses remain unknown.