News broke over the weekend that Sen. Bernie Sanders and his wife Jane had “lawyered up,” having retained a “prominent attorney” to represent Jane in a bank fraud case stemming from her tenure as President of now-defunct Burlington College.
Well, that’s disconcerting. So we took a look at the news stories that had been published from 2010 when the deal was hatched until the school’s closure in 2016. Frankly, we were left shrugging…
The property acquisition was not made unilaterally or in isolation
This was not something any one person did on their own. There was a whole host of players involved. Alphabetically:
- Burlington College Board of Trustees
- College of Consultors
- College of Deans
- Diocesan Administrative Board
- Diocesan Finance Council and
- Diocesan Presbyteral Council
They all signed off on the purchase of the Catholic Church’s property on Lake Champlain.
Additionally, a bond issue was made by the Vermont Educational and Health Buildings Finance Agency. They were “in” upon the completion and submission of an 18-page application. They did not take the application at face value, but had it vetted by an independent financial consultant in Boston.
The bonds were then purchased by People’s United Bank; Burlington College agreed to a 10-year term with 30-year amortization. The school’s VP of Finance – who later succeeded Jane Sanders as President, co-signed the loan agreement.
Additionally, $3.5M came as a loan from the Diocese from which the property was purchased.
Burlington College Presidents
College presidents have a number of vital responsibilities for the health and continuation of the institutions they head. One of the key performance measures is attracting and retaining donors.
We weren’t able to lay our hands on any complaint filed in court, so we’re guessing as to the actual accusations being levied from press accounts. But we’re also guessing that Jane Sanders based her projections for enrollment and contributions to the school on pledges made and her plans for achieving the performance metrics.
There were three presidents of Burlington College after Sanders left. These were Christine Plunkett (the VP of Finance who co-signed the bank agreement and concurrently served the school as President and Chief Financial Officer), Michael Smith (interim capacity only), and Carol A. Moore.
Plunkett did not follow Sanders’ plan for growth of the school through enrollment. Instead, she went to China for a week, bringing with her for all her efforts, one student. Instead of enforcing pledges or cultivating other donors, she sold off student housing.
In 2012, Plunkett said in an interview that she’d raised half of the school’s goal for the year. In 2013, one $1M pledge made to Jane Sanders before her resignation was not realized; this year, that million-dollar donor indicated that she’d handed Sanders a check along with a verbal promise that the substantial gift was would be received by the school upon her death, with donations in addition to the bequest in the interim. In 2014, Plunkett’s capital campaign efforts were “put on the back burner”. Over her tenure, most of the confirmed pledges made to the school never materialized; only about $676,000 was ever collected.
An audit of the school’s finances was conducted and released in June 2013. It showed that Burlington College had not paid ANY principal OR interest on the loan. The Diocese had sent notice of default. Recall that Plunkett was both college President and Chief Financial Officer at this time; Sanders had left in 2011.
Likewise, the school did not make any payments on a $500,000 bridge loan from a philanthropist for the purposes of improving the property so that it could be used.
By 2014, the school was in default, on probation and facing loss of accreditation when Plunkett left the school to students’ chants of “hey, hey, ho, ho, Christine Plunkett’s got to go”. It closed in 2016 under “crushing debt” and with an enrollment of only 200 students – about the same number as when Jane Sanders stepped down.
UPDATE (July 2, 2017): VTDigger reports that the allegations arose from a conversation with three bankers around the time the school closed. They were not involved in the loan and no longer employed at People’s United Bank when the conversation took place. A link to that story appears below.
© 2017 Poligags
Update story: https://vtdigger.org/2017/07/02/source-sanders-bank-pressure-allegations-says-evidence-hearsay