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Trump University

The Trump University origin story

From Ars Technica a few weeks ago, before the whole Trump University thing really blew up:

In 2005, both of us became fixated on a late-night infomercial that promised access to “hundreds of billions of dollars” in “free government money.” As journalism grad students at the time, our evenings often ended with a couple beers as we decompressed by watching whatever was on our tiny 13″ TV. And what was on at the time—repeatedly—was a half-hour advertisement for an outfit called “National Grants Conferences” (NGC).

Why did the NGC infomercial captivate us? It wasn’t the charisma of the commercial’s star, ex-football player and former Congressman J.C. Watts (R-Okla.), who was busy making a mockery of whatever credibility he once had. And it wasn’t the enthusiastic couple who founded NGC, Mike and Irene Milin, proclaiming that numerous government grants were there for the taking.

No, we couldn’t stop watching because NGC just felt so sleazy. Even in comparison with other get-rich-quick schemes competing for time in the twilight TV hours—the obnoxious guy with the question marks all over his suit, the insufferable smile factories bragging about their real estate conquests from tropical locales—this one seemed suspect.

Though neither of us were rich, we were both confident about one thing: real secrets to the easy life weren’t generally shared through free seminars given at local hotels. So how could a business like NGC persist, even thrive?

To find out, one Saturday afternoon we biked to a nondescript hotel near the Oakland airport for an NGC presentation. We sat among hundreds of other people packed into the ballroom as a speaker confirmed what the infomercial had promised: serious sums of government money could be ours. At the end of the session, dozens of attendees lined up to buy $999 NGC “memberships,” receiving two thick books full of government programs and the promise of ongoing coaching and support.

Intrigued, we spent the better part of a year researching NGC, its claims, and its founders’ pasts. We ultimately found that NGC—with several seminar teams circling the country and clearing tens of millions of dollars each year in sales—and its memberships produced no money for any of the customers we interviewed.

Arriving at that conclusion was no great surprise. Nor was it surprising that the NGC money train would continue running well after we wrote a piece about it, which was published on the front page of The Sacramento Bee on July 5, 2006. What was remarkable—and what still feels surreal more than a decade later—is what happened near the end of our reporting.

Donald Trump waltzed into our story.

Go read the rest, it’s well worth your time. This outfit was sued not once but twice by the state of Texas for being sleazeball scam artists. They’re also who Donald Trump turned to in order to get his Trump University off the ground. And that’s hardly the worst thing we know about Donald Trump. who of course has been endorsed for President by Greg Abbott, Dan Patrick, Rick Perry, and many other Texas Republicans. What else is there to say? Link via TPM.

Abbott, Patrick, and Trump

William Saletan:

Republicans who have sworn allegiance to Donald Trump—the majority leaders of the United States House and Senate, the chairman of the Republican National Committee, and numerous governors and members of Congress—don’t think this country can return to the racism and fascism of the 20th century. They want us to believe that Trump will respect the norms of the post-Holocaust, post-segregation era because they support him. In truth, their capitulation should alarm us. As other countries have learned, the first step in the descent to racism and fascism is to become numb to them. Over the past week, we’ve received fresh evidence that the numbing process is underway.

Since announcing his candidacy, Trump has tested our tolerance. He has insinuated that Cuban Americans, Mexican Americans, and Seventh-day Adventists can’t be trusted. He has proposed a ban on Muslims. These statements have thrilled his crowds, and they haven’t cost him the support of Republican leaders. In general election polls, he has pulled even with Hillary Clinton.

So the assault continues. On Friday, at a rally in San Diego, Trump claimed that the federal judge who is hearing the fraud case against Trump’s real-estate “university” isbiased and corrupt—in part, apparently, because the judge is “Mexican.”

Trump has previously portrayed people as biased or untrustworthy, based purely on Latino ancestry, on at least four occasions. Last summer, after retweeting an allegation that Jeb Bush “has to like the Mexican illegals because of his wife,” Trump defended this claim on the grounds that Bush’s wife—who had been an Americancitizen for more than 35 years—was “from Mexico.” On Dec. 12 and Dec. 29, Trump suggested to Republican audiences in Iowa that they shouldn’t vote for Sen. Ted Cruz because “not too many evangelicals come out of Cuba.” In February, Trump accused Gonzalo Curiel, the judge in the Trump University case, of conspiring against him, calling Curiel “Spanish” and “Hispanic.” When Trump was asked to explain the connection between the judge’s alleged bias and his ethnicity, Trump said: “I think it has to do with perhaps the fact that I’m very, very strong on the border.”

Trump’s attack on Friday continued in this vein. “I have a judge who is a hater of Donald Trump,” he told a crowd in San Diego. “His name is”— at this point, Trump, having raised his voice like a drum roll, held up a piece of paper and pronounced the name carefully, gesturing for effect—“Gonzalo Curiel.” The audience booed, and Trump let the moment soak in, shaking his head in solidarity. Trump told the audience two things about Curiel: that he “was appointed by Barack Obama” and that he “happens to be, we believe, Mexican.” After railing against Curiel and the lawsuit for more than 10 minutes, Trump concluded: “The judges in this court system, federal court—they ought to look into Judge Curiel.”

[…]

Trump’s attack on Curiel is a warning, not just about who Trump is but also about how blasé we’ve become. On Sunday, Trump’s chief strategist, Paul Manafort, and his campaign manager, Corey Lewandowski, were interviewed on major network news shows. Neither one wasasked about Trump’s tirade against the judge. Meanwhile, Republican senators shilled for Trump as usual. Overt race-baiting has become normalized.

This is how it happens. It happens when you’re not looking. It happens because you weren’t looking.

Josh Marshall:

I confess Trump’s ‘Trump University’ turned out to be a bit more sleazy and craven than I’d realized. Does anyone remember Tom Vu, the comical, endlessly parodied late night real estate seminar infomercial king from the 80s and 90s? Trump U seems to have been a rip off on that scale. Just look at this single passage from the Times first look at the documents released [Tuesday] …

One sales manager for Trump University, Ronald Schnackenberg, recounted how he was reprimanded for not pushing a financially struggling couple hard enough to sign up for a $35,000 real estate class, despite his conclusion that it would endanger their economic future. He watched with disgust, he said, as a fellow Trump University salesman persuaded the couple to purchase the class anyway.

“I believe that Trump University was a fraudulent scheme,” Mr. Schnackenberg wrote in his testimony, “and that it preyed upon the elderly and uneducated to separate them from their money.”

At the risk of using that over-used phrase, that’s just the tip of the iceberg. Trump U seemed explicitly organized to prey on the financially desperate and the elderly. As I noted yesterday, when Judge Curiel acceded to the Trump lawyers’ requests to delay the trial until after the election, one of the issues he had to contend with was that many of the claims are tied to elder abuse – i.e., specific fraud statutes that cover scams targeting the elderly.

That tells you a lot.

Another point is Trump’s repeated references to the testimonials students gave praising ‘Trump University’. At the risk of stating the obvious it’s hard to see these as much more than hostage videos in which students were pressured to give glowing reviews since they were explicitly told that Trump would take a personal interest in their careers. Think about it: why videotape the testimonials at all if not to guard against a situation like the current one?

[…]

As one of my colleagues has pointed out, this really isn’t terribly different from your standard get-rich-quick real estate seminar racket. But the people who run those usually don’t run for President. Perhaps more notable, would anyone worth $10 billion get into a racket like this?

So. Just a reminder, Greg Abbott and Dan Patrick have both endorsed Donald Trump for President, even if Abbott is among the craven cohort who refuses to say Trump’s name in doing so. That means that they are actively supporting an openly racist con man for the office. At what point is the media in Texas going to start asking them about these things Trump is saying and doing? Do they stand with him on his racist attacks against a sitting federal judge? Note that quite a few national Republicans have at least criticized Trump’s continually escalating attacks on Judge Curiel. Even if nearly all of them do so in a weaselly way, it’s still more than what Abbott and Patrick have done, which is remain cravenly silent. As for the Trump University scam, they’s hoping the old cease and desist trick will spare them. That shouldn’t stop anyone from asking them whether they think Trump U was a scam or not. But really, the big question is what exactly does Donald Trump need to say or do to lose their support? We deserve to know.

The Florida-Trump U plot thickens

Oops.

Florida’s attorney general personally solicited a political contribution from Donald Trump around the same time her office deliberated joining an investigation of alleged fraud at Trump University and its affiliates

The new disclosure from Attorney General Pam Bondi’s spokesman to The Associated Press on Monday provides additional details around the unusual circumstances of Trump’s $25,000 donation to Bondi. After the money came in, Bondi’s office nixed suing Trump.

The money came from a Trump family foundation in apparent violation of rules surrounding political activities by charities. A political group backing Bondi’s re-election, called And Justice for All, reported receiving the check Sept. 17, 2013 — four days after Bondi publicly announced she was considering joining a New York state probe of Trump University’s activities.

Marc Reichelderfer, a political consultant who worked for Bondi’s re-election effort and fielded questions on the donation at her request, told AP that Bondi spoke with Trump “several weeks” before her office publicly announced it was deliberating whether to join a multi-state lawsuit proposed by New York’s Democratic attorney general. Reichelfelder said Bondi was unaware of dozens of consumer complaints received by her office about Trump University filed before she requested the donation.

“The process took at least several weeks, from the time they spoke to the time they received the contribution,” Reichelderfer told AP.

The timing of the donation by Trump is notable because the now presumptive Republican presidential nominee has said he expected and received favors from politicians to whom he gave money.

“When I want something I get it,” the presumptive Republican nominee said at an Iowa rally in January. “When I call, they kiss my ass. It’s true.”

Now, nowhere in this story is there a mention of Texas. As we have learned, the Texas AG investigation into Trump University was finished in 2010, and Trump wrote a check to Greg Abbott for his gubernatorial campaign in 2013. As far as we know, Texas was not considering joining the lawsuit mentioned in this story – it rather boggles the mind to imagine Greg Abbott signing off on joining a lawsuit led by the Attorney General of New York, on any matter – so the fact of Trump’s contribution is not terribly interesting on its own. But that doesn’t mean that there isn’t anything left to learn about the Trump U story in Texas, and the fact that the AG’s office now seems intent on shutting down any questions about the 2010 investigation leads one to wonder what else there could be lurking out there. The answer may well be that there is nothing – the decision to end the 2010 probe was surely political, but it doesn’t have to be anything more than that. All I’m saying is there’s no reason to take Greg Abbott or Ken Paxton’s word for it. So keep digging. And ask Abbott about Trump and all the horrible things he’s been saying, too. There’s a story for you. Slate and Daily Kos have more.

The story of Trump University in Texas

A fascinating read.

Long before Trump University fell in the crosshairs of Democratic presidential frontrunner Hillary Clinton, one of Donald Trump’s fellow Republicans drew a bead on the now-defunct school: Texas Gov. Greg Abbott.

Abbott, then the state’s attorney general, opened an investigation into the real-estate seminar business in 2010 raising many of the issues now reverberating in the white-hot race for the White House. Trump University ultimately closed up shop in Texas, leaving in its wake an untold number of people like Steven Branton of Mesquite — former students who were enticed by the Trump brand, only to discover a program wrought with high-pressure sales tactics and unfulfilled promises.

“It was just nonsense — I don’t know how else to say it,” Branton said, recalling how one of the seminars he went to seemed to take advantage of attendees who were not as financially able to afford them as he was at the time. “There were people in that room — I guarantee you, they were talking about giving him everything they had.”

Trump has fiercely defended the school against persistent criticisms from Clinton, who said Wednesday the billionaire “is trying to scam America the way he scammed all those people at Trump University.” He has said he will prevail in class-action lawsuits against the business and on Thursday took his confidence a step further, pledging to re-open Trump University if he becomes president.

In Texas, the Trump University probe was never fully fleshed out after the school quickly pulled out of the state. But in at least one letter to Trump’s attorneys, Abbott’s office said it found the promises the school was making to its students “virtually impossible to achieve.”

A former deputy chief of Abbott’s consumer protection division, John Owens, claims that his bosses nixed a request to sue Trump University for illegal business practices. A memo dated May 11, 2010, and provided to the Tribune and other news organizations, shows that Owens and his colleagues wanted to ask Trump University for a $5.4 million settlement.

“It was swept under the rug, and the consumers were left with no one to go to bat for them,” Owens told The Texas Tribune.

“The Texas Attorney General’s office investigated Trump U, and its demands were met — Trump U was forced out of Texas and consumers were protected,” responded Abbott spokesman Matt Hirsch.

More than three years after Trump University effectively ceased operations in Texas, Trump made two contributions to Abbott’s gubernatorial campaign, one for $25,000 in July 2013 and the other for $10,000 in May 2014. To this day, the donations to Abbott represent Trump’s only substantial foray into Texas politics — and enduring fodder for Abbott critics like the state Democratic Party, which charged Thursday that the governor is “on the corrupt Trump payroll.”

[…]

In a May 19 [of 2010] email to [Assistant AG Steve] Berlin, Trump lawyer Michelle Lokey provided an extensive defense of the school’s operation in Texas, saying it has found “no set of facts that would form the basis of a deceptive trade practices act violation here.” Lokey touted high customer ratings of the programs — 96-97 percent on average — and chalked up negative attention to “some spurious blog posts on the internet that are a consequence of doing business in this industry” and being associated with a “very public figure” like Trump.

Berlin responded to Lokey’s email three weeks later, saying the two “obviously see this case very differently.”

“Essentially what Trump U promises is virtually impossible to achieve,” Berlin told Lokey. “The audience Trump U targets for the initial workshop is the real estate novice. In effect, Trump U promises to teach these novices everything they need to know to be a successful residential real estate broker — in 3 days. In Texas, to become licensed as a real estate broker you must have 900 hours of classroom instruction and 2 years selling experience. The extensive training is required for good reason: to protect the public.”

“In addition to encouraging unlicensed activity (which is a misdemeanor in Texas), the course materials in a number of respects are simply wrong under Texas law,” Berlin wrote later in the email. “In short, we continue to have serious concerns about the course materials as well as the marketing and sales tactics used by Trump U in Texas.”

Read the whole thing, it’s well worth your time. The original reporting on this came from an AP story that brought up the Abbott connection. Trail Blazers adds some more detail:

The former deputy director of Abbott’s Consumer Protection Division now alleges that the attorney general office’s decision to quash the lawsuit against Trump — later a major donor to Abbott’s campaign — was a political move that left Texas consumers “high and dry.”

“The decision not to sue him was political,” John Owens told The Dallas Morning News. “Had [Trump] not been involved in politics to the extent he was at the time, we would have gotten approval. Had he been just some other scam artist, we would have sued him.”

Abbott’s communications director, Matt Hirsch, responded to Owens’ allegations late Thursday, saying, “The Texas Attorney General’s office investigated Trump U and its demands were met — Trump U was forced out of Texas and consumers were protected. It’s absurd to suggest any connection between a case that has been closed and a donation to Governor Abbott four years later.”

According to internal documents provided to The News about the state’s investigation into Trump University, the consumer protection division filed a formal request May 6, 2010, to sue both Trump and his namesake real estate program. Five days later, it set out settlement options to help Texas taxpayers get back the more than $2.6 million they spent on seminars and materials, plus another $2.8 million in penalties and fees.

Both requests were denied, an unusual decision, Owens says, that was made at the top of the agency.

“The refusal of the administration to do anything stunk,” said Owens, a career state employee who worked under three attorneys general and received a commendation for having “greatly contributed to the accomplishments of our office” from Abbott upon his retirement in 2011.

“We routinely got approval to sue people. We routinely went after bogus schools that offered false diplomas,” he added.

There’s a lot of good information in these stories, but I suspect there’s more to be told. I don’t know if Steve Berlin is still in the AG’s office or not, but it would be interesting to hear what he has to say. One other person involved in this investigation has now spoken up about it:

The former head of the Texas attorney general’s consumer protection division says it was he — not then-Attorney General Greg Abbott — who decided how the office should investigate Trump University, the now-defunct business seminar operation that is now facing a class-action lawsuit and a world of political scrutiny as Donald Trump continues on the presidential campaign trail.

“My decision to approve the request to investigate and to devote state resources to that investigation was made without regard to the fact that the company was associated with Donald Trump,” David Morales, who managed nearly a dozen civil litigation divisions during Abbott’s tenure as attorney general, said in a statement circulated Friday.

“To be clear, I did not discuss this matter with General Abbott,” he added of the Texas governor, who was the state’s attorney general from 2002 to 2015. Morales added that he also did not discuss it with Daniel Hodge, the governor’s chief of staff and a former high-ranking official at the attorney general’s office.

[…]

Morales, now a lawyer in Austin for the firm Kelly Hart and Hallman, also refuted the idea that politics or money played any role in his decisions.

He said that Trump University agreed to suspend its Texas operations while the state was demanding documents, and in 2010 agreed to permanently leave.

“That agreement to permanently and immediately leave Texas was, in my opinion, the most important element of resolving this investigation,” the statement said. “It ensured that no further Texas citizens would be exposed to the company and it did not preclude those consumers who felt they wanted a refund to demand it from Trump University or in court.”

He added that he would have informed Abbott and other higher-ups of the decision after the fact.

“I am proud that our Consumer Protection Division was able to get Trump University to immediately and permanently leave the State of Texas,” the statement said.

That’s cool, but it doesn’t address the question of why the settlement agreement was scuttled. Why was chasing them out of the state sufficient, and why was no effort made to get Trump U to pay back the money they scammed from customers. And now it looks like our current Attorney General really doesn’t want any of those questions to get asked.

Texas Attorney General Ken Paxton’s office sent a cease-and-desist letter Friday to a former official who has claimed his bosses nixed a lawsuit six years ago against Trump University, the beleaguered school tied to presumptive Republican presidential nominee Donald Trump.

In a letter dated Friday, First Assistant Attorney General Jeffrey Mateer asks John Owens to “immediately cease and desist from disclosing any privileged or confidential information” from his time in the office, which ended when he retired in 2011. Owens, the former deputy chief of the consumer protection division, told reporters Thursday that then-Attorney General Greg Abbott gave Trump special treatment when he declined to pursue a $5.4 million lawsuit against Trump University.

“Current and former Assistant Attorneys General have a duty to follow all rules related to the practice of law in the state of Texas,” Mateer said in a statement. “While everyone has First Amendment rights to free speech, the law strictly prohibits attorneys from releasing confidential and privileged information.”

The letter lays out a half dozen provisions Owens may have violated under state law and the Texas Disciplinary Rules of Professional Conduct. The provisions center on the possession and distribution of confidential materials related to state investigations.

Owens issued a statement denying any wrongdoing.

“I have done nothing illegal or unethical as stated in the letter,” Owens said. “I think the information I provided to the press was important and needed to be shared with the public.”

Yeah, I’m sure that will dissuade anyone from expressing any further curiosity about this. Especially given the moral authority that Ken Paxton exudes these days. Keep digging, y’all, I have no doubt there are more layers to uncover. The Chron, the Press, the increasingly vexed Erica Greider, and USA Today have more.

UPDATE: More from the Current and Kevin Drum.