The transactions stick out because Burlington College at the time was struggling to pay its own faculty and bills.74
Carina’s school also received at least one federal grant from the U.S. Department of Agriculture (USDA) to install biomass heating.75 At the time, Senator Bernie Sanders sat on the powerful Senate Budget Committee, with financial oversight of the USDA budget.76 Other insiders who benefited from Burlington College money included the Leopold family. Bernie Sanders described longtime friend Jonathan Leopold as part of his “family.”77 Leopold’s son had purchased a small resort in the Bahamas called Andros Beach Club. The college contracted with the club to host students during spring break at the suggestion of Jane Sanders. Burlington College paid the club close to $70,000 between 2009 and 2011.78
Despite Burlington College’s high tuition and small student population, the college’s graduation rate was abysmal. Students who enrolled in the college in 2007, for example, had a graduation rate of 22 percent—six years later. A higher percentage, 30 percent, actually transferred out of the college.79
There were other problems as well. Complaints mounted from faculty and students that Jane’s leadership style was creating a campus with a “toxic and disruptive environment.” Professor Genese Grill, a popular faculty member and one of Jane’s first hires, made the mistake of sending a letter to the Academic Affairs chair Bill Kelly complaining of an “atmosphere of fear and censorship.”
Jane Sanders denied the charge and then chose not to “reappoint” Grill.80
Despite the academic failings of the college, its continuing financial difficulties, and the growing river of funds that were flowing to her daughter’s business, Jane’s salary as president continued to rise. By 2009, she was making $160,000, including benefits.81 Her income combined with Bernie’s meant that they were starting to accumulate wealth. Despite Bernie’s outspoken attacks on corporate America, the Sanderses became quite comfortable investing in those same companies with their growing investment portfolio.
They held many of their investments in mutual funds under Jane’s name. Although her retirement plan provided the option of investing in so-called Socially Responsible Funds, the Sanderses had little interest. In 2012, for example, they held assets in only one “socially responsible fund.” Much of the rest was in mutual funds invested in large corporations.82 In 2014, they held investments in thirty-four separate mutual funds. Only four were “social conscience” funds.83 Burlington College, despite its avant-garde vibe, was also decidedly bourgeois when it came to its investments. According to tax filings, the college’s meager investment portfolio included shares in cigarette makers Philip Morris and Altria; chemical giant DuPont; financial goliaths HSBC Holdings and Merrill Lynch; and the petrochemical equipment firm Ameron International. None of the investments listed in their tax filings hint at anything remotely anticorporate.84
In 2010, Jane announced ambitious plans for Burlington College. Like many small colleges, Burlington was facing serious challenges attracting students. Jane wanted to expand the campus to make it more attractive to prospective students. She wanted to buy some property along the Lake Champlain shoreline from the Roman Catholic diocese. It was a prime piece of Burlington real estate and was therefore expensive: it would cost more than $10 million. How was a small institution with less than 200 students and an annual budget of less than $4 million going to manage that? It remains a source of great controversy.85
The deal was complicated and tough to pull off. Jane Sanders turned to the powerful and wealthy Pomerleau family. Not only did Tony Pomerleau help negotiate the deal on her behalf, he also provided a bridge loan of $500,000 to make the deal happen. The half-million dollars from Pomerleau was key. A wire transfer was arranged outside of normal banking hours on New Year’s Eve in 2010 to get the deal done. As one local reporter put it, “Pomerleau rescued the entire Burlington College land deal.”86
With the Pomerleau family backing certain Sanders family projects, both Bernie and Jane decreed that as far as this rich family was concerned, they were different. At the annual Pomerleau Holiday Party held in Burlington, local observers found it surprising that Bernie Sanders, a “notorious critic of the One Percenters,” was the “most effusive” of all the politicians present when talking about Pomerleau. Jane also explained to reporters that this rich family was in her eyes a good rich family. “It’s not that people are bad because they’re millionaires or billionaires,” she offered. “It’s the ones who are pressing to get more and more at the expense of the people. Tony is the antithesis of that. He doesn’t care about getting more. He cares about giving more.”87
“He [Pomerleau] understands relationships,” Jane would say on another occasion.88
With Pomerleau’s help, Jane patched together a financial deal that included a $6.5 million loan from a bank and a $3.6 million mortgage from the Roman Catholic diocese. Financing was secured through the Vermont Educational and Health Buildings Financing Agency (VEHBFA), a state-backed organization. Sitting on the board of VEHBFA at the time was Vermont secretary of education Armando Vilaseca, who would later sit on the board of Burlington College.89 Recall, Vilaseca made at least one trip to Cuba as part of the college’s foray into that country.
The backing of VEHBFA was important: it made the interest paid on the bonds that financed the purchase of the property exempt from federal taxes. Curiously, VEHBFA, when approving the bonds, applied a credit rating of “none” to Burlington College.90
To secure the loan from the bank, Jane had claimed that she had nearly $2 million in confirmed donations. These donations, though, were not what she made them out to be. One million of it was a bequest from a woman not yet dead—hardly “confirmed.” Another $1 million was from a donor who would match that bequest. These gifts could not be expected anytime soon, “unless [the first donor] were assassinated,” joked Yves Bradley, a later board member at the college.91
It quickly became apparent that the college did not have enough money coming in to pay for its loans, and it started falling behind in its loan payments. The board of directors asked Jane to leave in 2011. She received a $200,000 severance on the way out.92 When it was all over, the college would collapse.
It was later revealed that those were not the only financial misrepresentations that Jane had put on the bank loan application. Several other donors she mentioned told a Vermont news outlet that “their pledge amount was overstated or misrepresented.”93
Burlington College board trustee David Dunn was astonished to find himself listed as a donor who had made a commitment, even though he had never done so.94
When these misrepresentations came to light, the Federal Bureau of Investigation (FBI) and the Justice Department launched a fraud investigation.95
How Burlington College ultimately managed to get the bank loan remains a mystery.
A member of the college’s board of trustees was mystified that the loan was granted. “How does a bank loan this kind of money to a school that has no money, how does that happen?” said Joel Miller.96
One of Jane’s successors had her ideas. Carol Moore had decades of experience in higher education before she became the college’s president.97 She called the purchase an “appallingly inappropriate business deal,” and believes that the loans were approved in part because Jane happened to be married to the U.S. senator. “What bank lends a small, private, unendowed college of that size and financial status an amount that so obviously outweighs its ability to repay?” she asked. She suggested that part of the answer is “a bank in the state of an influential senator—a senator, as it turned out, with bigger ambitions?”98
Burlington College closed its doors in 2016. Five years earlier, Jane had landed easily on her feet. She left Burlington College in deep financial trouble—with a considerable severance in hand in spite of that. While still in the two-year payout window of the $200,000, Jane listed her income from Burlington College on her husband’s annual financial disclosure form as greater than $1,000,
and the type as “sabbatical.”99 The FBI began looking into the loan applications that Jane Sanders had filed. Fraud is a very complex legal concept, but if you purposely misrepresent financial information to a lending institution, it could constitute financial fraud. In 2017, federal investigators began questioning college officials and others in an attempt to get to the bottom of it.100
* * *
Then, with the FBI investigation swirling, the saga of Burlington College took an unusual turn. In the summer of 2016, a mysterious burglary took place when an intruder broke into the college’s North Avenue building on the night of July 24. The only reason the crime has received any attention is the terrific reporting done by Morgan True of the nonprofit VTDigger.com.
Just hours after the burglary, a suspect was arrested in Troy, New York. A young man named Brett Seglem had backed into a fence with a stolen Burlington College van. The police found the back of the van stuffed with electronics stolen from the college’s main building.101
Once the Burlington police began investigating the crime, they found several strange elements to the incident. Seglem, who had no known connection to the college, seemed to know what he was doing when he broke in. He entered through a back door to the building (which was apparently unlocked) and then disconnected the security cameras. One school official told the police that someone had “removed the exact cables needed to disable the video surveillance of the areas which would have been accessed in gaining entry to the building.” The intruder then went to another room “to disable the remainder of the system.” Three former Burlington College employees believed that Seglem had prior knowledge of the building layout.102
Having disabled the security cameras, he gained access to the room that stored the college’s computer servers. He then poured a “large amount of water” over some of the servers, effectively destroying them. The main server and an external hard drive were among the items taken. The intruder somehow found the van keys (the employee whose office they were in wonders how) and made off with close to $50,000 worth of property.103
When police found Seglem in the stolen van, they seized the computers in the back. Mysteriously, crucial components were missing. The main server and an external hard drive were not in the van. Documents taken from a Burlington College safe concerning those bogus diplomas awarded by the Israeli extension of Burlington shortly before Jane took the helm of the college were also missing.104
“There are still lots of unanswered questions as to motive and other things,” said Burlington police detective Jeffrey Beerworth almost a year after Seglem’s arrest. These questions would go unanswered because, oddly, Seglem was never charged.105
Other materials related to Burlington College disappeared, albeit in a more conventional, if still troubling, manner. After Burlington College closed, their records were placed for safekeeping with the Vermont Agency for Education (VAE). In November 2015, Vermont attorney Brady Toensing requested college records held by the VAE. On December 16, three days before rejecting his request, state officials wrote to Burlington College asking if they should destroy the records. Eventually the records were destroyed and they were never released to the public.106
* * *
One of the most curious and mysterious elements of Bernie Sanders is the movement of funds and his efforts to obscure the flow of money, whether into his political operation or his own pocket.
For a U.S. senator, there is really only one legal way to supplement your income. Formerly, politicians could take speaking fees—as Sanders did when he was mayor of Burlington. In 1991, Congress halted this practice of self-enrichment, at least for members of Congress.107 As Bernie Sanders realized, a U.S. senator can boost their income by writing books.
Sanders dismisses criticisms of his newfound wealth as an author. “I wrote a best-selling book,” he told the New York Times. “If you write a best-selling book, you can be a millionaire, too.”108
Sanders, however, has not just written a book. Indeed, while sitting in the U.S. Senate, he has been one of that body’s most prolific authors, penning more books than anyone except for the late John McCain. (In contrast to Sanders, McCain donated a portion of the proceeds of his book sales to charity.)109 Indeed, during his tenure in the U.S. Senate, Sanders has actually written more books than he has written successful and substantive pieces of legislation. According to the U.S. government’s GovTrack, Sanders had passed seven pieces of legislation over the course of his entire career in Washington, spanning close to thirty years. Two of those pieces of legislation were the naming of post offices and one was to declare a “Vermont Bicentennial Day.”110
In contrast, between 2015 and 2019 alone, Sanders released three new books: Where We Go from Here (2018), Our Revolution (2016), and Bernie Sanders Guide to Political Revolution (2017). In 2015, he also rereleased a previous book with a new title: Outsider in the White House.111 In one instance, Bernie did not even write the book; Nation Books transcribed and published one of his long speeches on the Senate floor and appropriately titled it The Speech. Then his campaign committee, Sanders for Senate, paid Nation’s parent publisher, Perseus Books, more than $60,000 to purchase copies.112 The campaign then gave the books to supporters for donations. The Bernie 2016 campaign also paid Verso Books more than $440,000 for copies of his book Outsider in the White House.113
As Sanders’s book sales have boomed, his book advances have ballooned. He received a $795,000 advance for his book Our Revolution. He earned another $63,750 for his teen book titled Bernie Sanders Guide to Political Revolution.114 (Teen Vogue shared an “exclusive” sneak peek with its readers, calling his tome “Your Next Beach Read.”)115
Sanders pockets profits from his book sales as the law and Senate rules allow. As a result, Bernie and Jane’s annual income in 2016 and 2017 topped $1 million.116
Critics note that while Sanders once railed against “millionaires and billionaires” in his speeches, he has now seemed to drop references to millionaires as he has joined their ranks. He now goes after just the billionaire class.117 Still, Sanders tries to obscure the fact that he has become wealthy because of his position as a U.S. senator writing books.
In April 2016, Senator Sanders loudly proclaimed, “I remain one of the poorer members of the United States Senate.”118 However, several months later he and his wife dropped more than half a million dollars in cash to purchase a vacation home.119
In addition to their investment portfolio, with stakes in America’s largest corporations, the Sanderses have managed to amass a substantial real estate portfolio. In addition to the vacation home, they own a four-bedroom house in Burlington and a town house on Capitol Hill in Washington.120 They purchased the vacation home through a private trust, called Islands Family Trust, which provides certain tax benefits. The irony of Sanders owning three homes was not lost on critics who noted that Bernie had once chided the rich, asking, “How many cars do they need?”121
The Sanderses’ vacation home sits on picturesque North Hero Island, on Vermont’s Lake Champlain, and boasts five hundred feet of lake frontage. They purchased it just months after Burlington College closed its doors forever. When the deal was disclosed, questions were immediately raised about where the money for the purchase came from. Jane Sanders tried to explain it away, saying that she sold her share in a Maine family property she held with her brothers. But real estate records from Maine reveal that property accounted for only $150,000 of the purchase price.122
What makes the Sanders case unusual is the effort to which the family has gone to obscure their income. When Bernie Sanders announced his run for president in 2015, the Federal Election Commission (FEC) required him to file a personal financial disclosure that is more detailed than the one he is required to file as a U.S. senator. Rather than actually file the disclosure, Sanders repeatedly filed for extensions to avoid having to release his financial information. (On the campaign trail, Sanders promised to release his tax returns, but only disclosed a summary of his 2014 filing.) Whe
n he failed to get the nomination in mid-2016, he said the filings were no longer necessary. He effectively “beat the clock,” according to the Center for Public Integrity.123
One of Bernie Sanders’s most popular themes with his supporters has been the rule that financial ties between politicians and the rich lead to favors for the wealthy at the expense of the average American.124
Bernie Sanders has enjoyed those ties as well, despite his best efforts to obscure them.
Bernie Sanders has been a regular fixture at a high-bar fund-raising meeting with big-dollar donors held by the Majority Trust, a project of the Democratic Senatorial Campaign Committee (DSCC). Sanders is an Independent, not a Democrat, and has no obligation to attend these events, but chooses to do so. He is a regular attendee along with his wife, Jane. For an invitation to these events, supporters have to donate the maximum allowed by law to the DSCC itself: $33,400. These Majority Trust events occur at exclusive locales such as Martha’s Vineyard in the summer and Palm Beach, Florida, in the winter. Wealthy donors run the gamut and include lobbyists, lawyers, industrialists, and Wall Street executives. While Wall Street has been a particular target of Sanders’s attacks over the years, one executive attending these events told CNN that when Sanders speaks at these events, “I don’t recall him ever giving a speech attacking us.”125
Bernie Sanders was an early and enthusiastic supporter of the Occupy Wall Street movement. He praised the movement for “shining a national spotlight on the most powerful, dangerous and secretive economic and political force in America.”126
The ecosystem of political finances means that money is fungible. So Sanders can raise money from Wall Street for a Democratic Party committee (a party to which he professes to not actually belong) and then the Democratic National Committee (DNC) can funnel that money back into his campaign. The origin of the funds—Wall Street, large financiers—does not have to be disclosed. In short, Sanders can declare that he does not receive donations from wealthy investors while he actually benefits from them. In 2006, when he first ran for the Senate, the party spent $60,000 on ads for his campaign, another $100,000 to the Vermont Democratic Party, and the DSCC gave $37,300 directly into his campaign. For his part, Sanders has his PAC send his donor dues to the DSCC so he can attend these events.127
Profiles in Corruption Page 19