MONTPELIER, Vt. (AP) — Federal investigators are looking into the finances behind a real estate deal for a now-defunct college put together by the wife of U.S. Sen. Bernie Sanders, and she has hired a lawyer to look after her interests, a family spokesman confirmed on Monday.
The investigation, first reported by the news website VTDigger.org, is looking into allegations that Jane O'Meara Sanders made fraudulent claims and promises while seeking $10 million in financing for the real estate deal.
The complaint against Jane Sanders was filed in early 2016 by attorney Brady Toensing, who served as the Vermont campaign chairman for Donald Trump during his run for president as a Republican. In a separate complaint, Toensing alleged that Bernie Sanders' senatorial office pressured a bank to approve the loan.
Sanders, an independent, ran for president as a Democrat last year but was ousted in the primary by Hillary Clinton, who lost to Trump in the general election.
Asked about the allegations Monday at a Washington press conference on expanding community health centers, Sanders sought to keep the questions on health care.
"No, that's not what I'm talking about today," Sanders said when an Associated Press reporter attempted to ask him about the FBI's investigation.
Sanders then chided a Fox News reporter also seeking to question him on the issue, saying, "I'm glad that you're interested in the fact that the Republican leadership is proposing legislation which would throw millions of people off of health insurance and give hundreds of billions of dollars in tax breaks to the top 1 percent."
The Sanderses' spokesman, Jeff Weaver, who was the senator's 2016 presidential campaign manager, said the allegations that prompted the investigation were politically motivated attacks.
Toensing noted that the investigation began during President Barack Obama's administration under a Democratic attorney general and U.S. attorney for Vermont. He said he's only looking for a "fair, impartial and thorough investigation."
In 2010, Jane Sanders was president of the tiny Burlington College when she brokered a $10 million deal for the college to buy the last undeveloped parcel of land in Burlington on the Lake Champlain waterfront — 32 acres overlooking the lake and the 77,000-square-foot former orphanage and administrative offices of Vermont's Roman Catholic Church, which needed the money to settle a series of priest sex abuse cases.
At the time Jane Sanders, a longtime political adviser to her husband, promised the deal would be paid for with increases in enrollment from about 180 to 500 students and $2.7 million in donations. She left the college in 2011.
In a previously unreleased letter from Jane Sanders to the Burlington College board provided by Weaver, she wrote that during her seven years at the college she had improved its financial outlook, the accreditation had improved and the college had gone from not offering any financial aid to offering $400,000 in student aid.
"Together, I think it is safe to say we turned the corner," she wrote in an Oct. 12, 2011, memo to the board. "We've got many opportunities before us, but we need to realize them to continue our momentum."
But the increase in the size of the student body and the promised donations didn't materialize.
By 2014, the college had about $11 million in debt, and the only significant asset it had was the land. The college ended up selling much of the land, which is now being developed. The college closed for good in 2016.
In January 2016, Toensing filed a complaint with the Vermont office of the U.S. attorney and the Federal Deposit Insurance Corp. He alleged a loan used by the college to buy the land "involved the overstatement and misrepresentation of nearly $2 million ... in what were purported to be confirmed contributions and grants to the college."
In a follow-up letter in May 2016, Toensing, who in the past has filed complaints against Democrats and members of Vermont's Progressive Party, said that as a result of his original complaint he was "approached and informed that Senator Bernard Sanders's office improperly pressured" the bank to approve the loan.
As is typical in most cases, federal law enforcement won't confirm nor deny an investigation.
THE SANDERSES' RESPONSE
Weaver said Jane Sanders was working honestly to improve the outlook for Burlington College.
"She was working to take the college to the next level with the land purchase," Weaver said. "People can Monday morning quarterback it if they want, that's for sure. But what her intent was was to turn Burlington College into a world-class liberal arts college in Burlington for the benefit of the community."
Weaver confirmed the existence of the federal investigation but predicted nothing would come of it. He said it only made sense that the Sanderses had hired an attorney, but they had not been contacted by investigators.
"Are you supposed to wait for (U.S. Attorney General) Jeff Sessions to knock on your front door before you talk to a lawyer?" he said in a statement.
Last week, Bernie Sanders told a Burlington television station the allegations were nonsense.
"But now that there is a process going on, which 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," he said. "It would be improper at this point for me to add any more to that."
WHAT COULD THIS MEAN FOR BERNIE?
Bernie Sanders remains one of Vermont's most popular politicians. He took that popularity nationwide in the 2016 presidential primary campaign, and he remains a leader of the progressive political movement in the United States.
Sanders is up for re-election to the Senate next year. He has served in the Senate since 2007.
A retired Middlebury College political science professor, Eric Davis, said he didn't think the state GOP could field a serious candidate to challenge Sanders nor would the national party help fund a campaign against him. Davis said he didn't think the Burlington College issue would end up hurting Sanders' re-election prospects.
AP Congressional Reporter Kevin Freking in Washington contributed to this report.
Corrects the short headline to say feds are looking into Sanders' wife, not Sanders. Corrects text to say the Sanderses have not been contacted by investigators. Corrects that the news website is VTDigger.org, not Vtdigger.com.