Vermont Republicans Ask Feds to Probe Sanders College Loan

Dem presidential candidate accused of pressuring bank to lend to wife’s college

Bernie Sanders, Jane Sanders
Jane and Bernie Sanders / AP
• May 26, 2016 2:45 pm


Vermont Republicans are asking federal law enforcement officials to investigate Bernie Sanders over allegations that he illicitly pressured a bank to lend money to a college run by his wife.

In a Wednesday letter to a top Justice Department official and a federal ethics watchdog, they alleged that Sanders used his political influence to secure financing for an expansion of Burlington College, which Sanders’ wife led until 2011.

The college announced this month that it would close after the current academic year, citing the "crushing debt" incurred as a result of its purchase of land in Burlington from the city’s Catholic Diocese.

Vermont GOP vice-chair Brady Toensing accused Sanders in the letter of pressuring People’s United Bank to approve a $6.7 million loan application submitted by Jane Sanders, the senator’s wife, in order to secure the financing for that purchase.

"I was recently approached and informed that … Sanders’s office improperly pressured People’s United Bank" to approve the application, Toensing wrote in a letter to the U.S. Attorney in Vermont and the acting inspector general of the Federal Deposit Insurance Corporation.

"Ms. Sanders loan application did not receive the sort of scrutiny and basic underwriting to which those of us who are not married to a powerful United States Senator would have been subjected," Toensing said.

That alleged political pressure, he added, "helps explain why a loan was approved that never should have been approved."

Contacted by email, Toensing said he "can't comment on my source at this time." He reiterated that he "was informed by my source that the bank was told to get it done. That type of pressure by a sitting United States senator on a federal financial institution is textbook impropriety."

Neither the Sanders presidential campaign nor his Senate office responded to requests for comment. People’s United declined to comment.

The loan that Toensing claims was improperly approved drew controversy after it was revealed that Mrs. Sanders had allegedly overstated pledged donations to the school by nearly $2 million in loan application documents.

Toensing cited those misstatements of the college’s financial health as evidence of "a fraudulent scheme to actively conceal and misrepresent material facts from a federal financial institution."

He asked the U.S. attorney’s office to investigate in his capacity as the legal representative for Wendy Wilton, the Republican treasurer of the town of Rutland.

Burlington College trustees have hinted that the school may already be under federal investigation, though multiple college officials have refused to confirm or deny any ongoing law enforcement activity against the school.

In a separate letter to Sanders’ Senate office on Wednesday, sent on Wilton’s behalf, Toensing asked the senator to "publicly release all documents concerning Burlington College and your involvement with a loan application submitted by your wife" on the college’s behalf.

"I was recently informed that your office contacted People’s United Bank and pressured them to approve" that loan application, Toensing wrote.

Burlington College’s failure has made national news due to Sanders’ quixotic presidential run, and Toensing hinted at political dynamics in his letter to Sanders.

"You cynically refuse to release your tax returns, which will presumably show you directly benefitted from the $200,000 Golden Parachute paid to your wife from a school that was in financial trouble due to her apparent loan fraud," he wrote.

In addition to the controversial loan, other financial practices by the college during Sanders’ tenure as president have drawn scrutiny since the senator entered the presidential race.

The Washington Free Beacon previously reported that Mrs. Sanders established a woodworking school affiliated with the college. That school was run by her daughter, Sen. Sanders’ stepdaughter. Burlington College paid her Vermont Woodworking School more than $500,000.

Published under: 2016 Election, Bernie Sanders