As Donald Trump’s claims as a self-made man crumble under the weight of his actual family history (read: trust funds, sham corporations, tax evasion and fraud that transferred $413 million of his father’s money to Trump’s pockets), it seems as good a time as any to walk down scam lane and revisit other Trump frauds of yesteryear. And there’s perhaps no better example of Trump’s business style—a mixture of extortion, branding, false promises used to peddle ultimately content-less products and services—than Trump University, which, in the end, was all Trump and no university. Looking at this sordid chapter in Trump’s equally sordid playbook not only illuminates his past, but shows us what to look for in the present, as Trump transfers his business practices wholesale onto the “business” of running a country, creating an administration that is, too, a sort of inflated brand.
The Trump University chicanery got started in 2004, when a management consultant named Michael Sexton pitched Trump on the idea of using his name to grace a series of online real estate courses. Sensing opportunity, Trump pounced, announcing that he, not Sexton would own the company. It was a breathtaking act of entitlement on Trump’s part, stealing someone else’s idea and enriching himself on off of other people’s labor on the merits of his last name alone. But Sexton went for it, getting 5 percent ownership and and 250 million bucks a year to run things.
But what, exactly, were Trump and Sexton running? It wasn’t a university—that much is clear.
The business venture was never recognized by any state; it was not accredited; and it had no professional faculty. Sexton himself had no experience with either education or real estate, and the faculty at the school were hardly “the best of the best” that Trump promised. Very few of them had real estate backgrounds, and at least two of them were going through bankruptcy proceedings at the same time as they were teaching their students how to get rich. The education consisted of a grab-bag of predatory recommendations—exploit indebted homeowners and target foreclosure properties—to preying on the students themselves: a three day course cost nearly $1500; the exclusive database of lenders the program promised was freely available on the internet; and teachers spent the bulk of the initial seminars pressuring students to get credit increases or loans from their bank and enroll in the even more “exclusive” Gold Elite training, which cost a cool $35,000. Trump himself made $40 million dollars from exploiting other people’s American dreams, despite the fact that he taught nothing and had no idea who was on faculty. Trump’s most significant contribution to the company was autographing letters promising students wealth and success. Ironically, this baseless promise was probably the best education that Trump University could dispense, as it was Trump simply practicing his own business philosophy: promise big, brand bigger, do nothing, and dodge the consequences. It’s a philosophy that is deeply American, promising that feigning wealth is the best way to gain wealth, and exploiting the poor’s desire for wealth enriches the wealthy.
Still, it wasn’t long until students got hip to Trump’s game and began to sue him for defrauding them. After a team of investigators from the Texas Attorney General’s Office invested Trump University in that state, they concluded that Trump has engaged in false advertising and recommended that fining Trump $5.4 million and ban his business from the state. But Greg Abbott, the Attorney General at the time, did nothing. Later, Trump donated $35,000 to his gubernatorial campaign, and when Abbott was elected, he returned the favor by endorsing Trump in 2016. Similar shenanigans happened in Florida, where Attorney General Pam Bondi expressed interest in joining New York’s investigation into the University before recanting and refusing to pursue the matter. Investigations have since revealed that Trump used his foundation to (illegally) donate $25000 to Bondi’s reelection campaign, effectively bribing her to drop the issue. Bondi claims that she only received one complaint from a defrauded Trump University student, but over 8,000 pages of documents reveal that Bondi turned down many disgruntled students and their requests for help.
In April, a judge approved a $25 million dollar settlement for a class action lawsuit against Trump University.
And that’s a good thing. Former students will finally be able to recoup some of their swindled investments. But for Trump, it’s a small drop in the bucket, one of the costs of climbing the ladder of his own success. Example: Now Donald Trump is in the White House, making the same inflated promises as he did during his Trump University days, using his wealth to both entice and exploit poor voters—promising them a chunk of the American Dream while rolling back corporate taxes and worker protections—and branding a new style of American politics where infamy is as good as fame and fame equals wealth opportunities. But this time, Trump is offering his education for free, at the low, low price of following Twitter or reading the news. He’s making it clear how he works, how he succeeds, and what lengths he is willing to go to. And it’s up to Americans to decide if they want to copy him or use this knowledge to stop him. In fact, there’s a test coming up on November 6th.
Learn more about the Trump's History in New York City on our final Trump Tour of the season.
Leave a Reply.