Stephen Hunt reflects on the reality behind the facade of Trump University.
Trump University’s doors closed for the final time in 2010. Its place in higher education may have been more apparent than real, but politically it casts a shadow over the President-elect’s inauguration, and possibly beyond.
Donald Trump’s university – motto ‘We teach success’ – was established in 2004, following the first series of the US reality TV show The Apprentice, featuring, at its centre, Donald Trump. The Apprentice boosted Trump’s profile as a multi-billionaire business man and real estate developer. Trump University was designed to capitalise on this. Enrolment was touted as ‘the next best thing to being his Apprentice’.
Trump University was not, though, a university or a college. It did not award degrees, or provide grades; nor did it have a legal right to the title ‘university’.
The New York State Education Department (NYSED) contacted the Trump Organisation in 2005, and repeatedly after that, warning that, as an educational institution, it was unlicensed and therefore operating illegally. Furthermore, in New York state an institution must obtain a state charter to be legally entitled to call itself a ‘university’. Trump University was never granted such a charter.
Lacking any licence or charter, Trump University was, in fact, a for-profit enterprise that organised seminars and mentoring programmes in real estate development. Originally it was designed to provide its courses online; by 2007 it began concentrating on face-to-face delivery. The courses amounted to a free introductory session of 90 or 120 minutes, and a three-day series of seminars, costing around $1,500. Customers were then encouraged to enrol in an ‘elite mentoring programme’, ranging from $10,000 to $35,000.
By 2011, the university had taken an estimated $40 million in revenue.
One reporter, Seth Gitall, describes attending a Trump University seminar in rented hotel space in Boston in 2008: ‘The people I saw at the Trump seminar were looking for something that went beyond money. They were looking for an opportunity for a better life. For hope during a difficult time.’
Trump’s involvement in the life of the university was apparently minimal. He never appeared at the seminars, but steps had been taken to deal with the disappointment the students might suffer by his absence: ‘Rather than being photographed with Donald Trump, they were offered the chance to have photos taken with a life-size photo of Donald Trump’.
Another photo was reportedly eight foot high.
More seriously, the seminars were presented as if they were the equivalent of a university course: in an affidavit one disgruntled former student stated she felt ‘misled in thinking that I was going to be enrolled in a structured course, such as in a college or university.’
Despite its lack of licence or charter, Trump University, in the terms of the New York State petition, ‘repeatedly reinforced the misperception that it was a real “university” by employing many of the signs, symbols, terminology, and other indicia of colleges and universities’.
There were also hats and polo shirts available bearing the Trump University insignia.
Trump’s much vaunted ‘hand-picked’ team of instructors, some referred to as professors, were recruited from a variety of backgrounds. Some were available after their real estate investing had led to bankruptcy.
Others were new to real estate investing, having previously been involved in ‘food service management and graphic design’ according to New York Attorney General Eric Schneiderman.
What marked these instructors out was not expertise in real estate, but experience of high-pressure sales, according to former Trump University employee Corrine Sommer, who recognised one instructor as a former jewellery salesman.
Their job was to upsell, to enrol prospective students in as much of “the education” Trump University offered as they could afford, where ‘afford’ was often determined by how much they could borrow.
Students were asked to ramp up their credit card limits, ostensibly so they’d be primed to clinch any sudden real estate deals, but often, once available, students were encouraged to spend this new line of credit on further seminars. Fortune reported that the instructors were on a 10 per cent commission.
A former instructor at Trump University, Tad Lignell, gave a measured account of his experiences to Rolling Stone Magazine. He recounts that the instructors were guided by a playbook (which was later obtained by journalists at The Atlantic). Despite its fun-sounding title, the playbook actually contained instructions for the uncompromising retail of the courses.
‘While Trump University claimed it wanted to help consumers make money in real estate, in fact Trump University was only interested in selling every person the most expensive seminars they possibly could… Based upon my personal experience and employment, I believe that Trump University was a fraudulent scheme, and that it preyed upon the elderly and uneducated to separate them from their money.’ (Former salesman for the company, Ronald Schnackenberg’s testimony)
The course materials, rather than being authored by Trump, were supplied by a third party company specialising in materials for motivational and time-share companies.
Absent from the seminars, uninvolved in the production of course materials, or the selection of instructors, there was little chance the seminars would reveal Trump’s ‘secrets of real estate marketing’, as promised in the advertising.
Trump University was rebranded ‘The Trump Entrepreneur Initiative’ in May 2010, but shut down months later. This did not prevent New York State on 24 August 2013 filing a civil law suit against the Trump organisation and Trump himself. It alleged fraudulent and deceptive practices and false advertising. Trump University also faces two class action cases in California, brought by former students, alleging fraud and racketeering. Their complaint: the university didn’t end up teaching them success.
But were these students dissatisfied with what they got at the time? Not according to Trump: ‘The people that took the course all signed, most, many – many signed report cards saying it was fantastic, it was wonderful, it was beautiful’.
Trump has also repeatedly claimed that his university got ‘a 98 per cent approval’ rate in satisfaction surveys. More details of how well disposed the students were to Trump University appear on the Trump-orchestrated website www.98percentapproval.com.
Inauguration Day is 20 January 2017. The first court case in California was scheduled to start at the on the 28th November 2016 with the charge of racketeering levelled not just at Trump University but at Trump himself. One US legal academic, Professor Christopher L. Peterson, has argued, if proven, the lawsuits would provide sufficient grounds to impeach the new President.
Last Friday (18 November) all three cases were settled by Donald Trump for a total of $25 million: the 7,000 alleged victims are due to receive financial restitution, and the State of New York $1 million for alleged violations of its education laws.
The settlements have removed the threat of legal action, but this might not be the last of Trump University. In one tweet, dated 6 June 2016, Trump indicated that after he wins his court cases and becomes President, Trump University will make a return.