SWAMPSCOTT — In April 2016, nearly a year after Marian Court College closed, a trustee of the school returned to its now-empty building in search of a financial reckoning.
Marian Court had shut down abruptly in 2015, stunning students of the small Roman Catholic commuter school, where 95 percent of them were the first in their family to go to college and many were low-income.
Students questioned why the school was closing so quickly, a month after a graduation ceremony featuring Gov. Charlie Baker as commencement speaker and six weeks after a gala fundraiser hosted by Lauren Baker, the governor's wife and a longtime trustee at Marian Court.
The state Attorney General's office had questions, too. The office, which oversees public charities, asked trustees for more information about the shuttered school's "outstanding obligations and liabilities."
That's why Shawn Potter, the college trustee, was back at Marian Court a year after it closed, looking for records in the oceanfront mansion that had served as the college's home for 50 years, and where President Calvin Coolidge once stayed on his summer vacation.
Potter's search came up empty. In an email to the Attorney General's office, he said it appeared that a final audit of the school's finances was never performed.
"I have exhausted my resources and have made every attempt to comply with your request but, without the 2015 financial audit, I am unable to complete your request in its entirety and not sure where to go from here, please advise," he wrote.
What happened next was ... nothing. The Attorney General's office said it could not sign off on the college's dissolution — a process that would have provided the public with answers about the school's finances — without the information.
Instead, college officials walked away without providing a final public accounting of its finances, leaving unanswered questions about what became of the school's assets, endowment and liabilities. At least two former students requested an investigation, with one asking the Attorney General's office to look into "the people who took away our money and our time and gave us false dreams."
The Attorney General's office declined to investigate. A spokeswoman said the office's focus is on the "proper administration of charitable assets (and we understand Marian Court to no longer have any)."
The lack of transparency raises questions about why Marian Court College has not been held accountable, especially in light of recent investigations into the last-minute closing of another school, Mount Ida College in Newton.
The Mount Ida closing is being investigated by the Attorney General's office, was the subject of a State Senate committee hearing, and has been criticized by Gov. Baker, who said the "grownups" at Mount Ida let students down.
The Attorney General's office pointed to differences between the Mount Ida and Marian Court closings, and said its office received "hundreds" of complaints about Mount Ida and only four about Marian Court.
But an investigation by The Salem News showed that Marian Court trustees, who were charged with overseeing the college's finances, made mistakes of their own in the final days before the school closed and failed to follow state laws governing the closing of nonprofits after Marian Court was shut down.
By all appearances, Marian Court College seemed to be in good shape in the spring of 2015. On May 1, more than 500 people attended a gala, chaired by Lauren Baker and attended by Charlie Baker, that raised $200,000 for scholarships.
Two weeks later, Gov. Baker spoke at graduation, highlighted by the awarding of diplomas to the first recipients of bachelor's degrees at what had previously been a two-year school. A total of 60 students graduated, double the number the year before.
The ceremony also marked the 50th anniversary of the college, which was founded by Catholic nuns in 1964 as a secretarial school for women. Enrollment was 277 in 2014, according to the National Center for Education Statistics, with tuition at $16,200.
Behind the scenes, the picture was much bleaker. According to financial filings, the school had accumulated more than $1.3 million in debt over the three previous years. On June 14, a month after the graduation ceremony, the board of trustees held an emergency meeting. The topic: A $600,000 line of credit needed to keep the school up and running.
According to documents filed by the college after it closed, trustees planned on using an annex to the college's main building as collateral for the line of credit. But when trustees chairman John Burke examined the deed as part of the bank application, he determined the annex was owned by the Sisters of Mercy, the college's founders, and not by the college itself.
With no property to back the loan, Salem Five Bank denied the line of credit. Trustees then turned to the Conference for Mercy Higher Education, a Maryland-based organization affiliated with the Sisters of Mercy that oversaw 18 colleges across the country, including Marian Court.
In the emergency meeting, Marian Court trustees held a conference call with the trustees of the Conference for Mercy Higher Education and asked for a $600,000 line of credit from them "to get through the summer months."
At noon the next day, the trustees got their answer: No. Moya Dittmeier, the executive director of the Conference for Mercy Higher Education, called Marian Court President Denise Hammon and said the organization would meet the school's payroll obligations under one condition — that the college announce that it would close on June 26.
In an interview, Dittmeier said Conference for Mercy Higher Education trustees recommended against giving Marian Court the loan "because we had great concern about the lack of financial knowledge that the board had, and the board was not operating as a fiduciary of a school." She declined to comment further.
On June 22 — less than two months after the gala fundraiser and five weeks after graduation — trustees voted in executive session to close the school.
'What can/should I do?'
Salem State University and North Shore Community College agreed to accept Marian Court students. But the sudden closing left many students scrambling to find alternatives. One student filed a complaint with the Attorney General's office saying she had already been victimized by the closing of the for-profit Corinthian College a few years earlier.
The student, a single mother, asked how she was supposed to support two children "if every time I enroll in an educational institution they either straight-up lie to the student about what certifications they'll graduate with or they simply close up shop."
"Honestly, I would just like to know how to proceed, what can/should I do?" she wrote.
Trustees and administrators appeared to be unequipped to handle the sudden closure. State law requires institutions to notify the Board of Higher Education of their intention to close "as far as possible and well in advance."
Marian Court did not file its "closing plan" until Aug. 14, six weeks after the school had closed. A recent presentation on college closings by the state Department of Higher Education called Marian Court's notification the "worst" of any of the 15 colleges that have closed or merged in the last five years.
The lack of a plan made it difficult for some students to obtain their transcripts. In another complaint filed with the Attorney General's office, a student said she had been trying for five months to obtain her records in order to be eligible for financial aid in her master's program at American International College.
It wasn't until March of this year that the Massachusetts Department of Higher Education declared that Marian Court's transcript problems had been "resolved."
The shutdown also revealed another problem — Marian Court had never registered with the Attorney General's office as a public charity or submitted its annual financial filings, a violation of state law. To get it into compliance, the AG's office registered the college and asked trustees for four years of back financial filings.
That's what sent Potter on his futile search for the school's 2015 financial records. It is unknown what happened to those records or why he couldn't find them. Potter, the president and CEO of Lynn-based All Care VNA, did not return messages for this story.
Burke, the trustee chairman and an attorney based in Peabody, said in an email to The Salem News that the records were "currently not available."
Where did the money go?
The last available filing, from 2014, shows the college had nearly $500,000 in net assets and more than $400,000 in endowment funds. There is no record of what happened to those funds, or to the $200,000 in scholarship money that was raised at the gala. There is also no public accounting of how much money the college owes and whether people ever got the money they were due.
At least one person appears to have been left unpaid by the college. In September 2015, a man wrote a letter to Attorney General Maura Healey saying the college had failed to return a $2,000 deposit he had paid for his daughter's wedding, which was scheduled to be held at Marian Court but had to be moved when the college closed suddenly.
The man said he wrote three letters to college officials, including President Hammon, and received no response. "This leads me to believe Marian Court College has no intention of returning the $2,000 wedding deposit check it took from me and cashed," he wrote.
Jillian Fennimore, a spokeswoman for the AG's office, said officials there attempted to help the man get a refund, but the college had no money. Hammon could not be reached for comment.
The only glimpse of the college's financial status at the time of its closing comes from meetings held by the college's "closing team," which included a consultant who was paid $40,000 per month to help shut down the school. Minutes from those meetings list some of the college's outstanding debts, including $250,000 to Salem Five Bank, $4,000 to the Attorney General's charitable trust division, and $190 to Barnes & Noble.
Another entry in the minutes said that "Kathryn," apparently referring to consultant Kathryn Dodge, "will communicate regarding the 87k misappropriated funds as necessary."
Dodge, of Dodge Advisory Group in Peterborough, N.H., did not return several messages seeking comment.
Former Marian Court trustee David Gravel said he was not involved in the process of formally closing the college, which he said was the responsibility of the board's officers, led by Burke. Gravel said he does not know what happened to the $200,000 in scholarship money that was raised at the gala, including money that he and his wife donated.
"They held that gala and we donated because we thought the money was going to help kids," said Gravel, a Peabody city councilor. "I don't know if it ever went to help kids."
'Free ride' for 'bigwigs'
In an interview, trustees chairman Burke said he and Potter went to the Attorney General's office shortly after Marian Court closed to answer questions.
"They wanted to make sure the school didn't fold because it was $700,000 in debt," Burke said. "They agreed with us that it was an unfortunate situation, but there was no deception, fraud or anything like that even intimated. It wasn't a heated discussion. They said, 'That's too bad.'"
Burke said the school closed because of declining enrollment. He said trustees didn't realize that the college did not own the wing that they were relying on as collateral for a loan that would have kept the school open.
"Trustees come and go," he said. "By the time we were in the situation we were in, there were not trustees from back then (when the wing was sold in 2006) who had that information."
Neither Lauren Baker, who served on the Marian Court board of trustees from 2007 until the school's closing, nor Charlie Baker, who was so critical of the Mount Ida closing, returned messages for this story. Lauren Baker was so involved with Marian Court that her LinkedIn page called her a "one-woman development and advancement department" for the school, with the title of vice president director of institutional advancement.
Burke rejected any suggestion that the Marian Court closing received less scrutiny because of its ties to the Bakers.
"It wasn't like Charlie said, 'Hush this up, brush this under the carpet,'" Burke said. "Absolutely not."
Burke said Lauren Baker and all the trustees, who were not paid, were devoted to the college and its mission to help low-income students get a college education.
"She and the rest of the board loved the school, loved the concept and really wanted to help," Burke said. "We felt badly about it. We all felt we did the best we could."
At least one former student felt otherwise. In a complaint filed with the Attorney General's office, the former student said the college's leaders "got a free ride 'cause they were all bigwigs in Swampscott." She pleaded for an investigation into the officials and trustees who "were allowed to run a school into the ground."
Last December, the Sisters of Mercy sold the former Marian Court building to developers for $2.75 million. The proceeds from that sale went to the Northeast Community of the Sisters of Mercy, the entity that owned the property, and not to the college.
The building will be turned into condos.
Staff writer Paul Leighton can be reached at 978-338-2675 or email@example.com. Material from the State House News Service was used for this story.