Dear Editor,
Donald Trump continues to surge in the polls, much to the chagrin of his rivals and those who are able to see what he is beyond his bombastic and bragging rantings. But he is vulnerable on two fronts neither of which had been asserted in the campaign. Some people believe his claim of being the best and most skilled negotiator in the business world is open to attack by the fact that many of his enterprises have gone bankrupt. What Trump would do is set up any new enterprise in a separate corporation and when it failed, he simply put that company into bankruptcy. Those profitable businesses he kept going. It is not clear how many enterprises he has handled in this way, but he obviously is not as infallible in his business as he likes to think.
But he is far more vulnerable with regard to another one of his sponsored enterprises, namely, the Trump University he set up in May of 2005. This was meant to be an adult-education program through which Trump would provide students, who signed up with Trump’s supposed expertise, his methods and secrets, with regard to real estate transactions. Trump himself was very active in developing promotional materials for potential students, claiming in them that he “handpicked the professors for the school”, and had met with many of them.
The school started out by inviting people to attend one-day get-acquainted sessions. Personal invitations from Trump were sent out. Efforts were made at these events to convince the attendees to enrol in a three-day workshop with a charge of $1,495 apiece, where the school’s “professors” would provide instructions on real estate techniques. It was claimed that they would be given “all you need to start getting rich”.
During the workshops, the instructors sought to enlist those attending to participate in mentorship programs with prices ranging from $25,000 for the gold program to $34,995 for the elite program. Supposedly, under these programs, the mentor would counsel and lead the student through actual transactions, using secret ideas Trump claimed to know. People who were anxious about their financial situations and aspiring to do better enlisted. A total of 7,611 individuals eventually signed up either for the workshops or the mentoring programs, many of whom were elderly. One an 84-year-old man from New Jersey signed up for the $34,995 program. When he withdrew from the program and asked for the return of his payment, he was refused.
None of the instructors was trained in education, let alone a professor. Most had backgrounds in sales. It did not take long for the participants to recognize how inadequate the instruction was. Many sought refunds and some who complained were given refunds, but many others were denied. Some mentors did locate properties for their mentees, but banks were not willing to advance loan money to acquire them, even though the promotional materials which Trump oversaw said bank financing would be obtained through Trump’s programs. Trump University operated from 2005 to 2010 when it went out of business. During that time it took in $40 million in fees and paid $5 million to Trump. Trump said he would donate his payment to a charity, but has not done so as of last November.
Eventually, those who were unable to recover the payments they had made banded together and retained attorneys. Two class action suits were filed on behalf of all the plaintiffs in the Federal Court in San Diego against Trump individually and the Trump University corporation alleging fraud and in one case racketeering under the Rico Act. Trump’s lawyers used every type of manoeuvre to stall the cases from going forward. But primarily they attempted to have the actions against Trump dismissed based upon the allegations that he did not own stock in Trump University, and had been completely “absent from the operations” of the school.
Plaintiffs’ attorneys were quick to point out that Trump’s materials stated that he owned the University “lock, stock and barrel” and that a separate corporation owned by Trump held title to the stock. The presiding judges refused to dismiss the actions against Trump. Last reports indicate those rulings still stand and the cases will be going to trial soon.
On November 5, 2015, Time magazine carried a seven-page article by Steven Brill, an established legal columnist in New York City, in which he described in detail how Trump developed the University and its promotional materials, how it operated thereafter, and the legal actions alleging fraud and racketeering against Trump, who by then was the leading Republican contender in the primaries.
Yet up until the Republican debate on February 25th, no other candidate brought this critical information to the attention of voters or the media. Maybe they had been fearful that Trump, as he so often threatens to do, would bring an action again them. That is exactly what he did when a former student filed a complaint against him with the Better Business Bureau, filing an action against her for slander. His action was dismissed by the Court in April 2015, however, and he was ordered to pay the defendant’s the legal fees she incurred, which is unusual for a court to do.
Finally Ted Cruz brought up the subject in the recent debate, although not very forcefully and without describing any of the evidence against him. Trump casually swatted the subject away, stating this was merely a “civil action that he could easily settle at any time he chose.” Now we will see if the media, which follow everything that Trump says and does, will follow up on this revelation.
The media might ask such questions as: What is the evidence against Trump supporting the fraud charge? When will there be trials at which Trump will have to testify and be cross examined? Has there ever been a contender for the presidency who has faced fraud and racketeering charges? Will his adherents continue to support him so strongly when they know about this? Can such a man be elected President?
But what about the old gentleman from New Jersey, who lost his $34.995 and was refused a refund? After all that, when asked by Steven Brill, he said he, being a self-proclaimed Tea Partier, would still vote for Donald Trump. Go figure!
Stephen A. Hopkins
