Donald Trump was directly involved in developing the Trump University marketing strategy that the school’s sales managers used to “prey upon the elderly and uneducated to separate them from their money,” according to a class action suit filed on behalf of former students.
The complaint by former Trump University students alleges an concerted effort by the school to defraud unsuspecting potential investors out of thousands of dollars. Plaintiffs hope the documents released Monday, which include testimony from former top Trump U managers and sales department “Playbooks,” will tie Trump to the marketing strategy that cost some of them their life savings.
Former Trump University President Michael Sexton told the court that Trump had a heavy hand in making Trump University marketing decisions. “Mr. Trump understandably is protective of his brand and very protective of his image and how he’s portrayed,” Sexton testified. “And he wanted to see how his brand and image were portrayed in Trump University marketing materials. And he had very good and substantive input as well.”
Sexton also testified that Trump, who does not appear to have drafted the Playbooks themselves, took a front-and-center approach to marketing – the university’s “chief promoter”—making sure that his role on the reality TV show The Apprentice was highlighted and that his success was laid out as a model for Trump University students of the “entrepreneurship course” to follow. (He also insisted in commercials that he “handpicked” faculty and curriculum.) The result, Sexton testified, was that Trump University’s potential students saw an “accessible” success that they could buy into.
And buy into the success they did—sometimes with investments of up to $35,000. The “investments” were often made on maxed-out credit cards at the suggestion of Trump University sales managers, the released sales manuals, termed “Playbooks,” show.
Trump incorporated Trump University in 2004 as a training program for wealth management and investment, specifically, real estate investment. According to Trump University’s promotional materials, the courses, offered live and online, would help students learn Trump’s techniques for success in the real estate market. After more than 5,000 students had been through the program, Trump University shut its doors sometime in 2010.
Trump has responded to the fraud allegations only through his lawyers, who said Tuesday that the released testimony was “discredited” in later proceedings (they did not release transcripts of those proceedings). Trump campaign spokeswoman Hope Hicks told reporters only that “Trump University looks forward to using this evidence, along with much more, to win when the case is brought before a jury.”
Employee Ron Schnackenberg, who quit his position hawking real-estate education because he felt it was too shady, testified that Trump University would target the financially desperate—the old and the uneducated—and even ask potential students to pay for their tuition out of disability income. (Schnackenberg testified that he was reprimanded when he refused to convince a struggling couple to take out a loan.)
The Trump University sales pitch referred at one point to a “roller coaster of emotions” designed to build trust with a potential student and then use his/her vulnerabilities to ensnare them in a financial boondoggle.
Segments of the “Playbook” (titled ‘Probe‘) include instructions for sales managers to collect intimate details of students’ daily lives in an effort to:
collect personalized information that you can utilize during closing time. (For example: Are they a single parent of a three children that may need money for food? Or are they a middle-aged commuter that is tired of traveling for 2 hours to work each day?)
Others (‘Commit’) were designed to help sales managers overcome potential client objections (especially to maxing out credit cards to pay for the “Elite package”), basically through guilt.
“I don’t like using my credit cards and going into debt…[D]o you like living paycheck to paycheck? … Do you enjoy seeing everyone else but yourself in their dream houses and driving their dreams cars with huge checking accounts? Those people saw an opportunity, and didn’t make excuses, like what you’re doing now.”
And
“You’ve had your entire adult life to accomplish your financial goals. I’m looking at your profile and you’re not even close to where you need to be, much less where you want to be. It’s time to fix your broken plan, bring in Mr. Trump’s top instructors and certified millionaire mentors and allow us to put you and keep you on the right track. Your plan is BROKEN and WE WILL help you fix it.”
If students didn’t want to fork over the cash, sales managers were instructed to badger them with visions of a bleak future where they were even worse off because without the help of Trump “experts” failure was inevitable.
“How are you going to locate the properties? How are you determining ARV? All cash offer? Where is your financing coming from? How will you negotiate price? Terms? What about exit strategies? One mistake on any one of these and you’re broke, beaten, and worse off than you are now.”
“You can ask them questions so they realize they don’t have a chance for long term or short term success.”
Unfortunately, most of Trump’s experts weren’t experts at all. According to testimony from one of the junior employees told to “lean on” the expertise of his superiors:
“They were unqualified people posing as Donald Trump’s ‘right-hand men.’ They were teaching methods that were unethical, and they had little to no experience flipping properties or doing real estate deals. It was a façade, a total lie.”
The handbooks also prepared sales managers and workshop hosts for the inevitable accusations of fraud—and they’re instructive about what to do when a reporter following up on a lead gets a little too close for comfort.
That same segment also includes tips on how to avoid a District Attorney (by law, according to the Playbook, they can’t look at anything without a warrant).
Not all the news is bad, of course. Some of the documents have testimony from individuals whose Trump University education led to wealth.
The question is, based on the documents released this week, whether Trump’s involvement in the overall mission of Trump University was to simply make money at any cost, and how much Trump knew about how Trump University was bringing in the bucks.
