Jane Sanders Bank Fraud Investigation: 5 Fast Facts You Need to Know

jane bernie sanders photo

Jane helps make sure Bernie Sanders doesn’t compromise his ideals for the campaign. (Getty)

A loan that Jane Sanders helped secure for the now defunct Burlington College is back in the news after revelations that Sanders and her husband, Bernie, have retained lawyers to deal with a federal investigation into it.

The federal FBI probe is looking into whether a multi-million dollar loan for a college land purchase was properly obtained. Bernie Sanders’ top adviser Jeff Weaver confirmed to CBS News that “the couple has sought legal protection over federal agents’ allegations from a January 2016 complaint accusing then-President of Burlington College, Ms. Sanders, of distorting donor levels in a 2010 loan application for $10 million.”

Although the loan controversy first emerged during Bernie Sanders’ presidential campaign and the investigation was requested by Donald Trump’s Vermont campaign chair, an independent website in Vermont reported in April 2017 that a federal investigation had been launched into the loan, ramping up the investigation talk. The Sanders deny wrongdoing.

Here’s what you need to know:

1. The FBI Has Sifted Through Audit Reports & Spreadsheets

bernie and jane sanders

Jane Sanders always greets Bernie with a kiss. (Getty)

Jane Sanders’ tenure as president of tiny Burlington College was beset with controversy even before the college went belly up after becoming saddled with debt it couldn’t afford. When Jane Sanders took over at the helm of Burlington College, the school was already struggling financially, but it did have a respected and innovative vision: An alternative educational structure in which students designed their own majors.

By 2011, not long after obtaining a loan for a major expansion of the college and seven years after becoming president, Sanders resigned her position. “Members of Burlington College’s Board of Trustees were trying to force the president out because they were unhappy with her fund-raising record,” reported Inside Higher Ed, adding that Sanders left the school with a $200,000 buyout.

The center of allegations against Jane Sanders: A loan that Sanders, as college president, obtained for a swath of prime lakefront land once owned by the Catholic Church. The allegations focus on accusations that Jane Sanders was not honest about the school’s financial ability to pay back bank loans the college received to finance the land purchase.

In a lengthy story on June 22, 2017, Politico reported that the initial complaint seeking a federal investigation originated with 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,” but added that Toensing noted the investigation started under the President Obama administration.

According to Politico, a local website called VTDigger had confirmed in April that the FBI was investigating the loan. Now, reported Politico, “Bernie and Jane Sanders have lawyered up.”

You can read Toensing’s letter that got the ball rolling here.

The letter said that Toensing represented a Catholic parishioner and was requesting an investigation into what “appears to be federal loan fraud involving the sale of the Roman Catholic Diocese of Burlington headquarters (33-acres of prime, lake-front property) to Burlington College.”

Alleged Toensing, “The loan transaction involved the overstatement and misrepresentation of nearly $2 million dollars in what were purported to be confirmed contributions and grants to the college.”

The letter contends that, in 2010, Jane Sanders, then President of Burlington College, “orchestrated the college’s purchase of the Diocese headquarters property for $10 million dollars.” Jane Sanders sought approval from the Vermont Educational and Health Buildings Finance Agency, which “voted to use tax exempt bonds for the transaction.” The People’s United Bank purchased the bonds in the form of a loan to the college and second mortgage from the Diocese.

To get the loan, alleges the letter, Sanders submitted what she claimed “was evidence of $2.6 million in confirmed grants and donations.” However, by the end of fiscal year 2011, six months after loan closing, she had collected only $279,000 in donations, and, by the end of fiscal year 2014, the college had collected only $676,000 in the donations and “failed to meet required loan benchmarks and defaulted on its loan from the Diocese.”

Toensing also alleged that Sanders’ “privileged status as the wife of a powerful United States Senator seems to have inoculated her from the robust underwriting that would have uncovered the apparent fraudulent donation claims she made.”

Although reporters largely ignored the letter at the time, Politico reports that a federal investigation was indeed launched. “Federal investigators and FBI agents started to pull apart the $10 million financial arrangement. They showed up at Burlington College to sift through hard drives, audit reports and spreadsheets. They began to interview donors, board members” and a past president, reported Politico.

Politico also documented problems with the listed donors: “Sanders listed two people as having confirmed pledges for more money than they had offered; neither knew their pledges had been used to support the loan. A third donor had offered a $1 million bequest, to be paid upon her death. Instead, the college’s loan application counted it in funds to be paid out over the next few years,” the site reported.

According to VTDigger, one “donor says that former Burlington College President Jane Sanders mischaracterized the terms of a gift the donor planned to give the institution. Corinne Bove Maietta, a member of the famed Burlington Bove’s Restaurant family, said she agreed to give the college an unspecified amount upon her death. Documents show, however, that Sanders put her down for a series of cash payments.”

2. The Letter Seeking the Investigation Was Written By a Donald Trump Campaign Chairman Whose Mother Is a Well-Known Clinton Critic

Bernie Sanders wife, Bernie Sanders family, Jane Sanders

In 2004, Jane was named the president of Burlington College. (Getty)

Bernie Sanders has attempted to deflect questions about the probe by pointing out that it was requested in a 2016 letter by Toensing, Donald Trump’s campaign chair in Vermont.

Toensing is the son and stepson of Victoria Toensing and Joseph DiGenova, former prosecutors whose criticisms of Democrats, especially of Bill Clinton during the Monica Lewinsky scandal, are well known and earned them frequent television appearances.

Toensing works for their law firm. According to Politico: “His mother, Victoria Toensing, is one of the most committed conservative lawyers in Washington.” Both Victoria Toensing and diGenova frequently appear on national television programs to bolster Republican causes, and they were especially prolific during the Clinton years and investigations.

Victoria Toensing has represented a Benghazi “whistleblower,” and “was named Special Counsel by the U.S. House of Representatives to probe the International Brotherhood of Teamsters. In 2007, Toensing was retained by the New York State Senate to investigate then-Gov. Eliot Spitzer in the Troopergate matter,” her law firm bio says.

Victoria Toensing spent time as a prosecutor in the Reagan Justice Department. “As Deputy Assistant Attorney General in the Criminal Division of the U.S. Justice Department from 1984-1988, she established Justice’s Terrorism Unit,” her law firm bio says. She was also chief counsel for Republican senator Barry Goldwater.

In 1998, The Washington Post called Toensing and her husband, diGenova, “The Power Couple at Scandal’s Vortex.” The Post described their criticism of the Clintons and wrote that diGenova was a “white-hot media presence, politically connected lawyer and all-around agent provocateur. He and Toensing, also a battle-tested former prosecutor, keep popping up wherever there is trouble — as commentators, as investigators, as unnamed sources for reporters.”

The Post described how Victoria Toensing and diGenova were involved in criticism over Bill Clinton’s affair with Monica Lewinsky. Victoria “Toensing was approached by an intermediary for a Secret Service agent who had supposedly seen something untoward involving President Clinton and the former intern. DiGenova was at the heart of a quickly retracted Dallas Morning News account of that matter,” the Post reported.

Joseph diGenova is the former U.S. Attorney for Washington DC. According to his law firm bio, “He led the prosecution of Israeli spy Jonathan Pollard. He was the Principal Assistant U.S. Attorney during the prosecution of attempted Presidential assassin, John W. Hinckley.”

Brady Toensing inherited his mother’s conservative views. In 2016, Toensing called Bernie Sanders a hypocrite on Twitter because of his purchase of a new lake home. “Sanders is proselytizing socialist. Yet profits from $200K golden parachute and pays cash for 3rd home. Hypocrite?” he wrote.

According to his law firm bio, Brady “Toensing represented the government of the District of Columbia and the Director of its prison system in Section 1983 cases in Superior and Federal Courts involving the deaths of two prisoners sent to a private prison.” His bio added hat he “devised the argument that allowed the Firm’s client to be dismissed from the federal case based on qualified immunity and won a stay of proceedings in Superior Court based on this argument.”

Some of his cases involved Ruby Ridge and the Clintons.

“Mr. Toensing has represented clients in a number of Congressional investigations, including Clinton White House Pardon issues, Ruby Ridge, Waco, and during the Senate Permanent Subcommittee on Investigations inquiry into tax shelters,” his bio says.

He received his law and undergraduate degrees from Georgetown University. “Before joining diGenova & Toensing, Mr. Toensing worked for United States Senator Warren B. Rudman,” his bio says.

Toensing, as Trump’s GOP chair in Vermont, strongly defended Trump when other Republicans turned against him following Trump’s lewd comments on the Billy Bush Access Hollywood tapes.

“Brady Toensing, Trump’s state chairman and vice chair of the Vermont GOP, said the recent harsh words from Vermont leaders won’t matter,” reported VTDigger.

“These guys are local politicians — who cares?” Toensing said, according to the site. “Why are they weighing in on the presidential race? Either an overinflated sense of self or a slow news cycle. It doesn’t matter.”

3. Jane Sanders Has Hired a Lawyer Who Once Represented Scooter Libby & Bernie Has Lawyered Up Too

Democratic presidential candidate U.S. Sen. Bernie Sanders (I-VT) gets a kiss from his wife Jane Sanders before speaking at a meet-and-greet fundraising reception at the Park West on August 17, 2015 in Chicago, Illinois. (Getty)

Jane and Bernie Sanders have now both lawyered up, according to CBS News, and they’ve chosen well-known legal fire power.

“Sanders supporter Rich Cassidy has reportedly been hired to represent the senator, and Washington defense attorney Larry Robbins has reportedly been retained for his wife,” reported Fox News.

Why would Bernie Sanders need a lawyer too? Politico reported that federal investigators may also be looking into whether the senator’s office pressured the bank to approve the loan.

Jane Sanders’ lawyer once represented I. Lewis “Scooter” Libby, former chief of staff to Vice President Dick Cheney. Libby was convicted of perjury, obstruction of justice and lying to federal investigators. President George W. Bush eventually commuted Libby’s sentence.

4. A Non-Profit Website in Vermont Has Been Aggressively Investigating the Jane Sanders’ Loan & a Mysterious Burglary

Democratic presidential candidate Sen. Bernie Sanders (I-VT) (L) and his wife Jane O’Meara Sanders wave to the crowd as they take the stage at the Claremont Opera House on February 2, 2016 in Claremont, New Hampshire. (Getty)

Toensing is not the only Vermont resident who has dug into the loan details, though. In fact, his letter seems to have piggybacked on aggressive reporting done on the issue by VTDigger, an independent website in that state.

According to VTDigger, which has done the most extensive investigatory work on the Jane Sanders’ loan, a “former college employee who coordinated the school’s response to an FBI subpoena in February 2016 said she was contacted by two attorneys representing Jane Sanders shortly after VTDigger broke the news confirming the federal probe in late April.”

The lawyers wanted to know what the FBI had asked, reported the site.

In April, VTDigger’s Morgan True reported, “The Justice Department was investigating the activities of the now-defunct Burlington College as recently as February, according to emails obtained through a public records request.”

The site added, “The chair of the Burlington College board of trustees said …the FBI investigation has been going for more than a year, and at least one former school employee was subpoenaed as part of the probe.”

VTDigger reported that Toensing’s letter came after its reporting into the Sanders’ loan. The site has reported on everything from a mysterious burglary of college records to open records battles to preserve the school’s records.

VTDigger describes itself as “a statewide news website that publishes watchdog reports on state government, politics, consumer affairs, business and public policy. VTDigger.org is a project of The Vermont Journalism Trust, a 501(c)3 nonprofit organization.”

The story of the Burlington College burglary is one of the oddest angles, although there is no evidence it’s connected to the Jane Sanders’ loan.

According to Inside Higher Ed, in July 2016, “a break-in occurred on the property. Someone vandalized offices, took a van the college owned, took electronics — including the college’s main computer server — and took records of students from Israel. Someone had disabled security cameras, police said. They noted no signs of forced entry, adding a door had likely been left unlocked.”

A 26-year-old was investigated “after he allegedly crashed the college van into a fence in Troy, N.Y. Officials recovered the van, electronics and almost 20 computers,” reported Inside Higher Ed.

The education site reported that “police do not have an external computer hard drive that was taken from the college’s main server, according to a Burlington Police spokesman. He said he could not release further details, adding the police investigation runs parallel to an active FBI investigation.”

Brett Seglem, a 26-year-old man, was arrested in the burglary, but no charges were pursued, reported VTDigger, which added that the “main computer server” was stolen. VT Digger said that Seglem’s name is spelled three different ways in court documents, and there were other passengers in the van; It is spelled as “Brett Seglem, Brett Segler and Brett Seglam” and may also be Bret Seglem. Furthermore, school officials said it appeared whomever burglarized the college had advance knowledge of its layout, according to VTDigger.

5. Bernie Sanders Says His Wife Has Done Nothing Wrong

Sen. Bernie Sanders waits for caucus results with his wife Jane O’Meara Sanders (R) and other family members in their hotel room prior to a caucus night party February 1, 2016 in Des Moines, Iowa. His family is very supportive of his campaign. (Getty)

Although Bernie and Jane Sanders haven’t said much about the investigation until recently, Bernie Sanders predicted in an interview with The Washington Post that it wouldn’t amount to anything, and he attempted to cast the probe as partisan.

“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,” Sanders said, according to The Post. “That’s about it. I don’t think it’ll be a distraction.”

“[This] 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 this state,” the Vermont senator also said, according to The Huffington Post.

A Sanders’ political adviser called the accusations baseless and said the loan was approved by the college board, reported Huffington Post.