Donor sues Burlington College, alleges misused money

The estate of one a former faculty member and donor of Burlington College has sued the institution, alleging the college misused money intended for student scholarships to prop up the institution during financial troubles in recent years.

"My client acted in good faith in conveying $70,000 to the school with a fairly detailed agreement as to how the school was to handle that money, and they did something totally beyond the scope of the agreement," said Norm Blais, who represents the estate of G. Jason Conway.

Conway, who died in 2010, bequeathed $70,000 to Burlington College as an endowment for "deserving students," court papers state. But Marjorie Lemay, the executor of Conway's estate, alleged in court filings that the college used the money for other purposes.

The lawsuit revives discussion of the 2014 financial scandal that college officials had hoped to leave in the past. Burlington College is 18 months through a two-year probationary period set by an accrediting agency.

Blais, Conway's attorney, alleged in a Feb. 1 filing in Vermont Superior Court that the college had breached its contract with Conway and committed fraud by using the endowment for expenses other than student scholarships.

The estate is asking the court to void the endowment contract and impose punitive damages against the college.

Burlington College President Carol Moore, Dean of Operations Coralee Holm and Chief Financial Officer John Castaldo did not respond to requests for comment Monday. Board of Trustees Chairman Yves Bradley said he was unaware of the case and declined to comment.

Lemay, the estate's executor, stated that then-President Christine Plunkett and then-Chief Financial Officer William Breen said in 2012 that all but $20,000 of the endowment had been used for other purposes, but the college would replace the missing $50,000 by making a transfer from a different account. Lemay claims the college never made the payment.

"I have never been advised by the college that the endowment has been replenished, nor have I ever received any notification ... outlining the status of the endowment," Lemay wrote in court papers.

Lemay added she is unaware of any scholarships the college has made to students using the endowment. A donor bill of rights published on the Burlington College website states that donors deserve to know the capacity of the college "to use donations effectively for their intended purposes."

Blais said he is confident Burlington College will settle the case soon. Blais said Lemay, his client, sought counsel after unsuccessful attempts to persuade college officials to replenish the endowment.

"Why the college did not act on this before, they'll have to answer that," Blais said.

The lawsuit comes at a critical time for Burlington College, which is trying to shed its reputation as an academic institution on the brink of insolvency.

Barbara Brittingham of the New England Association of Schools and Colleges, the accrediting agency that sanctioned the college, said the commissioners will consider lifting the probation in April.

Brittingham said she had yet to learn about the Conway lawsuit, and said the organization would examine the merits of the case.

“If there is a judgment against the institution, and the commissioners know that, that’s a stronger statement," Brittingham said.

Should the accrediting agency revoke its endorsement from Burlington College, Brittingham said the federal Department of Education would likely balk at providing future financial aid for students there.

Scandal fallout continues

In an ambitious bid to grow the institution, Burlington College in 2011 purchased 32 acres acres of lakefront property from the Roman Catholic Diocese of Burlington to establish a new campus. The college, then led by Jane O'Meara Sanders — wife of Democratic presidential candidate Sen. Bernie Sanders, I-Vt. — persuaded banks to finance the deal with a plan to increase significantly enrollment and fundraising.

The money never materialized, and the fallout left the school in peril.

Jane Sanders quit in September 2011, less than a year after the diocese land deal. The New England Association of Schools and Colleges in June 2014 placed Burlington College on probation for having insufficient financial resources. The following month, Burlington College defaulted on its loan from the church.

Plunkett, the college administrator whom Jason Conway's estate says promised to restore the scholarship endowment, resigned in 2014 amid institution's financial instability.

The school in late 2014 hired Carol Moore as president, who promised to guide Burlington College out of trouble. The college has scaled back its vision for a lakefront campus and sold some land to a Burlington developer.

At the college's commencement ceremony last May, Moore predicted a bright future for the institution, which was founded in 1972.

"Although it has seen challenging days over the past few years ... I can assure you that Burlington College's doors will be open to welcome many future generations of potential graduates," Moore said.

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Correction: G. Jason Conway earned degrees from and became a faculty member at Burlington College, the school’s first president, Steward LaCasce, says. The Free Press, relying on court papers, incorrectly identified Conway’s connection to the school in an earlier version of this report.

 
Contact Zach Despart at 651-4826 or zdespart@burlingtonfreepress.com. Follow him on Twitter at www.twitter.com/ZachDespart
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