During the 2016 US presidential election, Vermont Senator Bernie Sanders became an unlikely candidate, firing up many voters with his rhetoric that targeted a corrupt financial system and the people who manipulate it to their own benefit. A new FBI investigation has revealed that, if Sanders wants to root out such corruption, he may need to start with those closest to him first.
….After applying for a $6.5 million loan for the deal, she told lenders that the school could afford the debt.
The story takes place at Burlington College, a liberal arts school in Vermont. From 2004, Sander’s wife Jane was the college’s president and in 2010, as part of a campus expansion plan designed to attract new students, she struck a $10 million deal to buy 33 acres of land. After applying for a $6.5 million loan for the deal, she told lenders that the school could afford the debt with donations, expected donations and money from enrollment numbers increasing.
Sanders resigned as president in September 2011 (less than a year after the deal was made) under pressure from the school’s board of trustees as it had quickly become apparent that she could not secure the commitments for the donations she’d promised. The result was a school that struggled under the weight of the debt that Sanders had accrued, leading to its eventual closure in May 2016.
…Sanders abused her ‘privileged status as the wife of a powerful United States senator’.
However, behind the scenes this whole episode looks somewhat dodgy to say the least. On the face of it, it seems that Sanders was committing federal loan fraud in misrepresenting the college’s financial position when applying for the loan. But surely, one might ask, the bank would have carried out due diligence before granting the college money? But this is exactly where the second issue comes into fruition – it has been alleged that Bernie Sander’s office leant on the bank, pressuring them to accept the loan.
Former vice chairman of the Vermont GOP, Brady Toensig – and also the man who raised this matter with the federal authorities – said that Sanders abused her ‘privileged status as the wife of a powerful United States senator’ which ‘seems to have inoculated her from the robust underwriting that would have uncovered the apparent fraudulent donation claims she made.’
… [Bernie Sanders] slated the apparent sexism behind the move – the implication that Jane Sanders was only able to obtain a loan because her husband helped her out.
So how has the much-loved Bernie reacted to all this? He has openly described his wife as ‘the most honest person I know’ and criticised the move to investigate her for two reasons. Firstly, the timing – Toensig began to push the matter in January 2016, in the middle of the Democratic primary in which Sanders challenged Hillary Clinton. He also slated the apparent sexism behind the move – the implication that Jane Sanders was only able to obtain a loan because her husband helped her out. Jane Sanders agreed on this point, claiming that Toensig was ‘going after my husband by destroying my reputation, and that’s not okay.’
The federal investigators have begun to contact former trustees and, in April, a subpoena was issued that requested all documents related to the land deal and Burlington’s financial records in general. Past that, we don’t know what is happening – all the key players (Jane Sanders’ lawyers, the US Attorney’s Office for the District of Vermont, the FBI and the Department of Justice) have all refused to comment on the investigation – although the subpoena itself is the first public confirmation that prosecutors have collected evidence to present to a grand jury.
Unsurprisingly however, this investigation appears to have political undertones. Many have suggested that this investigation is an attempt discredit Sanders who, as a popular politician with substantial public support, could prove a threat if he were to run for President again in 2020. Even so, the threat of this all-too familiar scandal encircling him could prove toxic for a man claiming to represent a new style of politics and a breakaway from the supposed corruption of the American political past.