Sen. Elizabeth Warren (D-Mass.), has called Donald Trump “a loser” who made his money by “cheating people with scams.” A look into Trump University’s records, as well as Trump’s other business deals suggests that Warren was right on the money.
A reunion of Trump University alumni is most likely to take place in a courtroom, and unlikely to be a happy occasion. Founded in 2005, and defunct by 2011, Trump University promised to teach students the real estate “secrets” that supposedly made Donald J. Trump a billionaire mogul, for anywhere rom $1,500 to $35,000. That promise turned out to be worth about as much Trump’s promise to be a “self-funding” candidate.
When I started writing about Trump last year, Trump University was in the headlines. In August of 2013, New York Attorney General Eric Scheiderman filed a $40 million lawsuit on behalf of 5,000 people, charging Trump University with “persistent fraudulent, illegal and deceptive conduct.” Two years later, Trump’s newly announced candidacy for president had renewed interested in Trump U. Schneiderman’s lawsuit, which is still pending and won’t see the inside of a courtroom before the election.
However, the judge in that lawsuit, US district court judge Gonzalo Curiel, ordered the release almost 400 pages of Trump University documents that offer an unprecedented peek into Trump’s business practices. The pages reveal the extent of the “fraudulent, illegal, and deceptive” conduct Trump University employed to fleece its students. In some documents, Trump University employees themselves pulled back the curtain on Trump University.
The most damning documents is the “playbook,” which detail how Trump University recruiters targeted students who “hurt” and “had problems,” without regard for the financial concerns of prospective students. Ronald Schnackenberg, a former sales manager, was reprimanded for not pushing a financially struggling couple to sign up for a $35,000 real estate class they could not afford, and watched another colleague sell them the class anyway. “I believe that Trump University was a fraudulent scheme,” Schnackenberg wrote in his testimony, “and that it preyed upon the elderly and uneducated to separate them from their money.”
One document advised Trump University recruiters, “Money is never a reason for not enrolling in Trump University; if they really believe in you and your project, they will find the money.” Employees were warned not to let someone “use lack of money as an excuse,” and encouraged to urge people to buy the most expensive package they could. Consultants were instructed to encourage sharing of financial information, and to even find out how much prospective customers had in their retirement accounts. Event Manager Corrine Sommer said that her colleagues encouraged students to open up as many credit cards as possible to pay for classes, saying, “It’s OK, just max out your credit card.” Those without credit cards to “max-out” were advised to invest “seed capital” or “savings set aside.”
“Urgency is proportional to pain,” the playbook advised, urging recruiters to target people with the most pressing problems, most likely financial. “The more a problem hurts now, the more the need for a solution now. And the more it hurts, the more they’ll be prepared to pay for a speedy solution,” the playbook said. “It’s got to hurt enough!” On a later page, it asked, “Are they a single parent of three children that may need money for food? Or are they a middle-aged commuter that is tired of traveling for 2 hours for work each day?”, indicating that such people might be desperate enough to believe that Trump University could teach them “secrets” that would make them as rich as its namesake.
Recruiters were prohibited from making any promises, or “directly or indirectly advising client/customer of any likelihood of success.” While employees could’t promise students results, the marketing of Trump University made plenty of promises about what students would be betting for their money. In a letter sent to new enrollees, Trump himself promises, “I know that in these three packed days, you will learn everything to make a million dollars within the next 12 months.”
From Donald Trump’s own mouth, students heard they would be learning from real estate “experts” who were handpicked by Trump himself. But Trump testified in a 2012 deposition that he never selected instructor — some of whom had just come out of bankruptcy, and while others were motivational speakers, and not real estate experts at all. Jason Nicholas, a sales associate for five months in 2007 said the instructors were “unqualified people posing as Donald Trump’s right-hand men.” Nichols wrote: “They were teaching methods that were unethical, and they had little to no experience flipping properties or doing real estate deals. It was a total facade, a total lie.” Ms. Sommer recalled that one member of the sales team who had previously sold jewelry was promoted to become an instructor, despite having “no real estate experience.” “They were just skilled at high-pressure sales,” she said.
While Trump supporters may point to Trump University’s 98 percent approval rating, students have since reported that they were pressured to give positive reviews. Some instructors pleaded for positive evaluations, lest the not get invited back. One Trump University assigned mentor refused to leave th room until Jeffrey Tufenkian gave him excellent ratings, and stood “right in front me” as is filled out the evaluation. John Brown was talked out of giving his instructor a poor review, after he was hounded by employees who called him three times to get him to raise his original scores. Some instructors simply withheld certificates until students completed evaluations.
The Better Business Bureau is probably more reliable. The Bureau said in March that it had received “multiple complaints” about Trump University. In 2010, the Better Business Bureau gave Trump University “D minus” rating. Those ratings only went up after Trump University closed its doors in 2011. The school earned an “A” rating, and an eventual “A plus” rating in 2014, after it had ceased operating and customer complaints no longer counted against it.
Meanwhile Trump University which was 95 percent owned by Trump, brought in about $40 million, about one quarter of which went in to Trump’s own pocket. In fact, Donald Trump is still making money from Trump University. Trump’s recently released financial records reveal that he made $13,239 last year from Trump Entrepreneur Initiative LLC — which was previously known as Trump University.
Trump University is only the latest chapter of Donald Trump’s shady business dealings, but it is the most telling. After all, the whole enterprise was little more than a scheme to transfer wealth from people who had little to begin with, to Trump, whose main secret to “success” is that he was born to wealth — one that no seminar can teach. Candidate Trump’s economic plan would essentially do the same thing. That’s probably not what Trump meant when he promised to reopen Trump University if he becomes president, but it’s one more reason why he shouldn’t become president.