Trump University: A Model for Making America Great?
Nope. It was a classic bait-and-switch scam.
For all of the self-hype about Donald Trump’s great successes as a businessman, his business failures are even more instructive. While failure in business can certainly be overcome and there can be valuable lessons learned from mistakes, there are also instances when the business itself becomes more important than the people it’s supposed to be helping or serving. One such example is Trump University.
Thankfully, during the last Republican presidential debate, Marco Rubio and Ted Cruz finally started going after the frontrunner instead of each other. Rubio landed a good punch, sarcastically conceding that he didn’t “know anything about starting a fake university.”
Naturally, Trump defended his creation of Trump University. During an interview with NBC’s “Meet the Press,” he insisted he would do it all over again because, he boasted, “98% of the people who took the courses approved the courses” and “said they were great.” As usual Trump left out many, many details.
What exactly was Trump University? David Marcus notes, “To understand what Trump University was, it is important to understand what it wasn’t — namely, a university.” In fact, a lawsuit filed by the New York attorney general in 2013 forced Trump University to change its name to Trump Entrepreneur Initiative. It turns out that Trump U was operating illegally as a non-accredited university and did not offer any degrees or well-rounded curriculum. Trump ignored warnings dating to 2005.
What did it offer? It offered educational products, some with a price tag of $35,000, which were designed to teach students how to make big profits in real estate. At the lower levels, seminars were offered to teach students how to flip properties but they were designed to upsell the student to the next higher level course. Indeed, upselling was the name of the game, and many students were coaxed into paying a hefty price for useless information.
It was a classic bait-and-switch scam — a lie, a fraud. People paid generous sums of money to attend these courses that benefitted not the students but the businessman Donald Trump. And his outfit is now the defendant in three lawsuits.
In Trump’s introductory video for Trump University, he states, “We are going to have professors and adjunct professors that are absolutely terrific — terrific brains, successful. We are going to have the best of the best. Honestly, if you don’t learn from them, if you don’t learn from me, if you don’t learn from the people that we will be putting forward — and these are all people who are going to be handpicked by me — then you are just not going to make it in terms of the world of success.”
First, according to Michael Sexton, the top executive for Trump University, “None of the instructors at the live events were handpicked by Donald Trump.” That’s right — none.
Second, as mentioned before, Trump boasted of the 98% approval rating from those who took the courses. In an interview with Fox News Sunday, he went on to claim that Trump University had an A rating from the Better Business Bureau. Yet the Better Business Bureau rated Trump University a D- in 2010. In addition, Trump University closed its seminars in Texas in January 2010, following a “civil investigative demand” mailed to Trump’s corporate offices after Texas assistant Attorney General Rick Berlin began a probe of whether Trump’s operation was in violation of Texas' Deceptive Trade Practices Consumer Protection Act. Instead of responding and returning the requested documents, Trump University ceased doing business in Texas.
Third, Trump claims he has helped so many people but in recent TV ads courtesy of the American Future Fund, the people giving testimony present a far different picture.
In the first ad, one single mom says she “made a huge mistake trusting him.” She thought that she would get the best — the best experts, advice and contacts. But she ended up paying more than $35,000 for what amounted to “just a fake” and “got hurt badly” by Trump.
In the second ad, a man tells how he was “duped by The Donald” into believing he was attending a legitimate university because of its name. He explains that at the $1,495 seminar the professors pressed for students to increase their credit lines so they could afford the higher priced courses and become part of a group who would receive access to some of Trump’s condos, which could be flipped quickly for a profit. In addition, there were promises of access to “hard money lenders” but no contacts were ever provided.
Finally, in the third ad, another man states that he fell for Trump University because he thought he could use the information to earn extra money to pay off debts. After the first two seminars, he was convinced by the presenter to increase his credit card limit so he could afford the $25,000 Gold Elite program. But again the hard money lenders did not exist. He found himself unable to get financing unless he had a deal with a seller and he couldn’t make a deal unless the financing was in place. He asked for help but was told to work harder. In the end he had to sublet his house and move into a studio apartment due to accumulation of debt and because the billionaire huckster refused to refund any of his money. “Trump is just a fraud, a misrepresentation, a BS artist,” the man says.
In line with Trump’s usual desire to silence dissent, he is demanding the ads be pulled.
Is Trump University a model for greatness or a model for failure? People who hoped for a brighter future were told they could gain valuable information and the tools for success from Trump University. But they were lied to and essentially robbed. The man they thought they could trust betrayed them. And this is just one example of Trump’s misdoings and deceitfulness in business. Check out the debacle of Trump Mortgage for another, or ask the questions of his unreleased tax returns for still one more.
So as voters head to the polls for Super Tuesday and beyond, the question is simple: Is Trump the kind of man who will help make America great again?