The Making of Donald Trump (14 page)

None of this was true either. The only thing close to being true was that he went to “the best business school.” Trump never attended the noted Wharton School at Penn, but he did enroll for two years in a four-year undergraduate program.

Based on the testimony Trump gave Rachel Jensen in 2012, it’s ludicrous to argue that Trump University offered a better education than any top business school. Trump himself acknowledged that Sexton, whom he’d put in charge of running Trump University, “didn’t have much of a background in real estate.” Trump also said he didn’t remember whether Sexton had ever run a school before. “It’s too long ago,” he said.

Trump also denied knowing how much a three-day seminar cost. “It was a long time ago,” he testified. “I don’t know.”

When Jensen asked whether “someone who had no experience buying or selling real estate” should be “qualified to charge tens of thousands of dollars for a three-day real estate mentorship,” Trump replied, “I really—I really can’t answer … I don’t know what his background is. I really don’t know. Maybe he’s a super genius in so many ways. I don’t know. I mean, I can’t tell you. I just can’t tell you that.”

Trump also admitted that he had never reviewed the scripts that were provided to the live events instructors: “I don’t believe so, no,” he testified. Clearly, Trump could not vouch for the value of the lectures, which both government investigators and students seeking refunds described as scripts of polished high-pressure sales tactics of little to no educational value.

The testimony above all comes from a 2012 suit, but two other lawsuits claimed that the whole Trump University enterprise was a fraud—a scam in which the desperate and the gullible paid Trump about $40 million for what turned out to
be high-pressure salesmanship. In a 2013 case, New York Attorney General Eric Schneiderman said the three-day Trump University seminar (which cost $1,497) promised access to a special “database” of lenders.
What it actually offered was a list that traced back to the
Scotsman Guide
, a monthly magazine I accessed for free on the Internet.

New York was not the only state where authorities suspected Trump University was a con. In Texas, undercover state consumer fraud agents attended many of the fifty-seven free Trump University seminars held over seven months. They later compiled a report.

Among the investigators’ findings was that students who attended a “next level” seminar “are taught to prey upon homeowners in financial turmoil and to target foreclosure properties.” They were also instructed, on the first morning of the three-day course, “to call their credit card companies, banks, and mortgage companies and ask for an increase or extension of credit so that they may finance the ‘Gold Elite’ package purchase. Defendant Trump U will even ask attendees to call their bank during these one-on-one sessions while the representative waits. The primary goal of the 3-day seminars appears to be more high pressure sales tactics in an attempt to induce them into purchasing Defendant Trump U’s ‘Gold Elite’ package for $35,000.”

The consumer protection investigators also reported that what Trump University taught “is out of date, inapplicable to the Texas real estate market, and generally of little practical value. Moreover, the so-called strategies that are taught are highly speculative and may be tantamount to encouraging attendees to sell real estate without a license, which is illegal in Texas.”

The state report also said the sales agents posing as faculty
“falsely assert at these ‘free workshops’ that the classes are approved continuing education credit for realtors,” even though they were not approved. Finally, calling the operation a university violated a Texas law similar to the one in New York. Trump University had not even obtained a required Texas license and had not registered to pay sales tax, as mandated by state law. (Sexton later testified that the taxes were eventually paid.)

To the seasoned fraud investigators who compiled the report, the case against Trump seemed ironclad. The investigators concluded with the suggestion that Trump—who, to solicit customers, signed letters that said, “I can turn anyone into a successful real estate investor, including you”—be named personally in a civil action suit alleging deceptive trade practices.

We know all this because John Owens, who retired in 2011 as chief deputy in the Texas attorney general’s consumer protection unit, made the internal report public in 2016. The Texas attorney general’s office, Owens’s former employer, responded with a letter citing six laws Owens may have broken in releasing the report and suggesting his law license might be revoked.

The documents Owens released included an analysis of the defenses Trump could be expected to argue if the matter went to court and why the staff felt he would lose. Owens also released a January 2010 letter signed by Rick Berlin, an assistant Texas attorney general, proposing that the state demand restitution for the Texans who felt swindled, as well as further penalties for deceptive and illegal conduct. In all, Berlin recommended demanding $5.4 million and a permanent order banning Trump and his fake university from ever doing business in Texas again.

Greg Abbott, the Texas attorney general, took no public action.

After Owens made the internal report public, state officials put their own spin on the decision not to demand restitution or file a public action. They insisted that Abbott had actually scored a win for Texas by not following his staff’s advice. Abbott has since been elected governor. He endorsed Trump in 2016. Abbott’s office said he had done his job in forcing what it characterized as a bad business to leave Texas.

Abbott has not explained the reasons he would endorse for president someone who ran a business so crooked he ran it out of the state. It could not be determined whether Trump moved on under threat of action by Abbott or simply because he decided the Texas market for Trump University’s offerings had been exhausted. No documentation was provided to either effect.

In 2013, three years after Berlin failed to persuade Abbott to adopt his recommendation to recover money for Texas consumers, Trump donated $35,000 to Abbott’s campaign for governor. A much shorter time period between campaign gift and official inaction occurred in Florida.

On September 13 of the same year, Florida’s attorney general, Pam Bondi, announced that her office was considering joining the New York attorney general in investigating Trump University as a possible fraud. That week, a $25,000 check from the Donald J. Trump Foundation was delivered to Attorney General Pam Bondi’s reelection campaign organization, And Justice for All. Ivanka Trump also sent a personal check donating $500 to support Bondi’s reelection. On September 17, Bondi announced that her office would not join the New York fraud
investigation, citing a lack of evidence and claiming her office had received only a single complaint.

Both Bondi (a lawyer) and Trump would have known that many would consider it improper for an attorney general to accept campaign money from the subject of a possible fraud investigation.
In fact, on the last day of June 2016, Trump himself denounced Loretta Lynch, the attorney general of the United States, for having a half-hour conversation with former president Bill Clinton during a chance encounter on the Phoenix Airport tarmac. The two should not have spoken at all, Trump said, because the Federal Bureau of Investigation was still probing Hillary Clinton’s use of a private email server when she was secretary of state.

“
Who would do this?” Trump demanded. “I just think it’s so terrible, I think it’s so horrible.”

Trump pointed out that he was campaigning against a rigged system. The Phoenix meeting was “evidence of a rigged system,” he said. He made no comment about his own investigation in Florida or his substantial campaign donation to Bondi.

Contrary to Bondi’s claim, there had been more than one Florida complaint about Trump’s education business. When reporter Scott Maxwell asked the Florida attorney general’s office for all records of complaints regarding Trump’s education enterprises in 2013, he received 8,491 pages of records. The documents showed that Bondi, like Bill McCollum, her predecessor, had turned away many pleas for help. Citizens, some of them quite elderly, were told to complain to some other government agency or file a lawsuit on their own. One man said the $26,000 he paid for a Trump education drove him into bankruptcy. There were also complaints that there was no practical way to get a refund because the Trump offices in Boca Raton had closed.

Trump’s Florida operation was run by Michael and Irene Millin. The Millins had done quite well for themselves; like Donald Trump, they were once featured on the syndicated television show
Lifestyles of the Rich and Famous
. They were also a couple well known to fraud investigators across the country as marketers of get rich quick schemes. They were the subject of complaints about offices that closed suddenly, leaving employees and suppliers unpaid. Their pricey seminars claiming people could borrow vast sums at no interest and qualify for big government grants drew action by attorneys general in thirty-four states. Among them was none other than Greg Abbott when he was the top law enforcement official in Texas.

Why Trump would associate with the Millins is a question thus far unasked during presidential debates and campaign events, though learning about the couple’s dubious record in business would not have required a lengthy or expensive background investigation. A simple Internet search would have done the trick.

Furthermore, Congress prohibits charities, including Trump’s private foundation, from making any political contributions like the one he made to Bondi’s campaign.
For both Trump and Bondi, the cashing of that check opens the prospect of prosecution for felonies. In June 2016, a Boston lawyer named Whitfield Larrabee asked federal prosecutors to seek indictments of Bondi and Trump for bribery. “If it looks like a bribe and quacks like a bribe, I think it’s a bribe,” Larrabee said.

The explanation offered by Trump’s foundation will likely induce utter disbelief from people who run charitable foundations or who work in their grant-making departments. It will also raise the eyebrows of any experienced public corruption prosecutor. Grant-making foundations are required to disclose
the names of their recipients in an annual report to the IRS known as Form 990. That document is signed, just like your personal income tax return, under penalty of perjury.

The Trump Foundation Form 990 for 2013 makes no mention of a donation to Bondi’s campaign arm, And Justice for All. However, it does show a $25,000 gift to a charity with a slightly different name, Justice for All, located in Wichita, Kansas. That organization, whose charitable mission is training anti-abortion organizers, said it did not receive a penny from Trump’s foundation.

Allen Weisselberg, who is both the Trump Organization chief financial officer and treasurer of Donald Trump’s charitable foundation, blamed the failure to properly report the gift on a typographical error—a heavy burden for a mistyped letter or two to bear, especially when it turned out that the actual $25,000 check was made out to a group with the same name as the Bondi campaign, this one with a Utah address. The Utah charity had not gotten any Trump money, either.

According to Weisselberg, the same staff work on Trump’s business and his foundation. He told
The Washington Post
that an unnamed clerk received a request for payment from Bondi’s organization, And Justice for All. If true, that means Bondi solicited Trump when he and his faux educational organization were under investigation for fraud.

Even more astonishing was the statement And Justice for All treasurer Nancy Watkins made to the
Tampa Bay Times
in 2013. She said Bondi’s campaign was “comfortable with the propriety of the contribution from the Trump Foundation.”

While no one involved felt anything was wrong in Florida, Trump had a very different view of what happened in a federal
court case in California, where people sued him and Trump University as a fraud.

His answers to lawyer Jensen’s questions were made public at the request of numerous news organizations. Those requests were filed with Judge Gonzalo Curiel, the federal judge overseeing two of the fraud cases in San Diego. The day that Judge Curiel made the testimony available, Trump went on the attack.

“I have a judge who is a hater of Donald Trump, a hater … he is not doing the right thing,” Trump said, inadvertently sparking a debate over whether he would respect the independence of the judiciary as president. Trump made no mention of the judge’s decision to make some of the material in the fraud case public, a dot that many news reports did not connect. Trump instead suggested an investigation of “the judge, who happens to be Mexican.” Judge Curiel, a former federal prosecutor, was born in Indiana and graduated from law school there.

The next day, Trump continued his attack on the judge’s heritage. “I’m building the wall, I’m building the wall,” Trump said of his proposed barrier between the United States and Mexico. “I have a Mexican judge. He’s of Mexican heritage. He should have recused himself, not only for that, for other things.”

The comments prompted the
National Review
, an influential conservative political magazine that opposes Trump, to mock him: “It turns out that Donald Trump’s legal philosophy, such as it is, is like his philosophy of everything else: Donald Trump likes judges who like Donald Trump.”

As of July 2016, Trump has sought to keep the public from seeing the rest of the court record requested by news organizations, especially the video of lawyer Jensen questioning him
under oath. Simultaneously, he derides the fraud allegations as nonsense and declares that he was winning in all three court cases. Yet he fears the video of his deposition. Trump’s lawyers have argued that releasing the video of his testimony “serves no legitimate purpose in the litigation and will only taint” future jurors should the case go to trial. Release of the video would cause “extreme prejudice” that will “imperil” Trump’s right to a fair civil trial. “This Court should not let the judicial process be abused in this way.”