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Friday, June 9, 2017

Trump University: A Scam or Standard Academic Puffing?

     In May 2005, Donald Trump added a new service to the far reaching and diverse Trump brand. (Bottled water, neckties, golf courses, resorts, hotels, office buildings, condominiums--you name it.) Aspiring entrepreneurs in search of their fortunes could enroll at Trump University, an online educational institution that offered courses and seminars in real estate, asset management, entrepreneurship (If you need to go to school to become an entrepreneur, forget it.), and wealth creation. Trump University tuition ranged from $1,500 to $35,000. This was a lot of money for a "university" that didn't confer college credits or an accredited degree. Enrollees knew this, of course. They were attracted to the Trump name and all it stood for. Fair enough. That's why students endure Massachusetts to attend Harvard.

     Donald Trump himself appeared in television ads for the school that led prospective students to believe that the course instructors had been handpicked by The Donald. The targeted customers were promised a free, 90-minute seminar where they would learn how to make money in real estate through a "systematic method of investing." The free seminar acted as a pitch for the three-day real estate seminar that cost $1,495. The Trump school also offered the so-called "Trump Elite" educational packages that included personal mentorship programs that cost between $10,000 and $35,000.

     Trump University, in June 2010, changed its name to The Trump Entrepreneur Initiative after bureaucrats with the New York State Department of Education declared the use of the word "university" in the company name misleading. (Just how stupid would a prospective student have to be to think this was a real university?) The state authorities also felt that because the institution wasn't licensed, accredited, or bonded by the state, it was not a legal operation. Perhaps this is the real reason New York injected itself into the business of Mr. Trump's school. The government wasn't getting it's cut of the action.

     In May 2011, six years after the founding of Trump University, the New York Attorney General's Office, under Eric T. Schneiderman, launched an investigation of Trump's online educational service. State investigators were looking for evidence of "illegal business practices." The attorney general opened the case against Trump after Trump University graduates from New York and four other states complained they had been misled by deceptive advertisement. (According to Attorney General Schneiderman, some of the "Trump Elites" thought they had purchased the right to meet Donald Trump in person. Instead, they were photographed next to a live-size poster of the man.) At this point, The Trump Entrepreneur Initiative had essentially ceased doing business.

     The state of New York, in August 2013, filed a $40 million civil suit against the Trump institution. In its quest for restitution, the attorney general's office accused Trump and his operatives of illegal business practices in the form of "false promises." In the suit the plaintiff described Trump University as "an elaborate bait-and-switch" operation.

     Attorney General Schneiderman, in a statement released to the media, said that Donald Trump and his people had made false promises to persuade more than 5,000 students--including 600 New Yorkers--"to spend tens of thousands of dollars they couldn't afford for lessons they never got." (They got one lesson, only suckers think they can get rich by going to a seminar.) According to the attorney general, "Trump University engaged in deception at every stage of consumers' advancement through costly programs, and caused real financial harm. Trump University, with Donald Trump's knowledge and participation relied on Trump's name recognition and celebrity status to take advantage of consumers who believed in the Trump brand. No one, no matter how rich or famous they are, has a right to scam hardworking New Yorkers. Anyone who does should expect to be held accountable." (Really? The biggest scam artists are government employees. Who's holding them accountable?)

     As could be expected, the Trump organization went on the offensive. Trump lawyer Michael Cohen told an Associated Press reporter that he had testimonials from 11,000 former students who had been "extremely satisfied" (odd combination of words) with Trump University. According to attorney Cohen, the attorney general's illegal business practices suit was laden with "falsehoods."

     George Sorial, another Trump lawyer, accused Attorney General Schneiderman of being politically motivated. According to Sorial, Schneiderman had filed the suit after Donald Trump refused to contribute to his campaign. "This [the lawsuit] is tantamount to extortion," he said.

     Critics of higher education generally might wonder why the New York Attorney General's Office wasn't going after other educational institutions that charge huge amounts of money for diplomas that, in the job market, are worthless. Why wasn't he, for example, suing Columbia University, Brooklyn College, or the University of Buffalo for deceptive business practices?  

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