Donald Trump (aka “The DONALD”; aka “His Hairness: aka “hairball”) is running for CEO of the CSA (Corporate States of America.) In his campaign, he keeps bragging about his YUUUGE fortune and his “Trump Class” business acumen. Since political claims are fair game, I did some checking. Turns out, he’s a lousy businessman. In my research, I’ve run across 19 major business FAILS in the last three decades. The one that is currently garnering the most attention, was his much “Trump”eted Trump University.
Trump University was founded in 2005. The “University” part of the name was a stretch of extreme magnitude. Not only wasn’t it a university, by it’s very definition, it wasn’t even a college offering degrees or even licensed as a school. The New York State Department of Education said that it was “misleading and even illegal” to call itself a university. What it was, was a series of real estate seminars, held in various hotel ballrooms around the country.
The advertising for Trump U included a number of claims:
- consumers would learn “everything [they]need[ed]to know” to become successful real estate investors; Attendees at the three day seminars discovered, that despite claims that vital secrets to would be disclosed, to get those really secret secrets it was going to cost them a lot more and failure to pay meant failure. (Can you say, “bait & switch?”)
- consumers would quickly recoup their investment by doing real estate deals, with some instructors claiming that consumers would earn tens of thousands of dollars within thirty days; (Somehow, that never seemed to happen.)
- instructors were “handpicked” by Donald Trump; In fact, several instructors came from other fields and some of those that did have a real estate background became instructors after going bankrupt with their own investments. And, it turns out, The DONALD didn’t do any of the “hand picking.” That job was pushed off onto subordinates.
- consumers would be taught Donald Trump’s very own real estate strategies and techniques; The curriculum wasn’t developed by Trump. It was developed by a company that creates material for motivational speakers.
- consumers would receive access to private sources of financing (“hard money lenders”); Actually, instructors provided handouts with scripted talking points for students to use in their phone calls with credit card companies, explicitly encouraging people to falsify their current income. (Last time I checked, credit card companies weren’t exactly “private sources of financing.”)
- the three-day seminar would include a year-long “Apprenticeship Support” program. Never happened!
Tuition ran from $1,495 for a three day seminar, to $35,000 for a “Trump Elite” membership, that included personal advice from His Hairness, himself. (Which he never provided.) In fact, he never even visited any Trump U classes. (In fairness, student’s did get to pose with a cardboard cutout of The DONALD.) All the students got for their $1,495 was a generic seminar and salesmen pressuring them to buy additional (and much more expensive) courses.
5,000 people paid Trump U around $40 million. And, while Trump U claimed it was formed as a philanthropic project and Trump would not financially benefit, his cut of that $40 million amounted to $5 million dollars.
According to NY Attorney General Eric Schneiderman, who is currently bringing suit,
Mr. Trump used his celebrity status and personally appeared in commercials making false promises to convince people to spend tens of thousands of dollars they couldn’t afford on lessons they never got.
The NY attorney general is currently seeking “full restitution for the more than 5,000 consumers nationwide who were defrauded of over $40 million in the scheme, disgorgement of profits, as well as costs and penalties and injunctive relief prohibiting these types of illegal practices going forward.”
The AG’s lawsuit claims “Trump University also committed violations of federal consumer protection law.” It also accuses Trump U of “deceptive acts and practices,” false advertising, “operating an unlicensed private school,” refusing to provide mandated refunds and several other no-nos!
In the “playbooks” that were released by the trial judge, phone recruiters were given detailed instructions including the background music to be used. (“For the Love of Money” by the O’Jays.) Among the other instructions,
The words ‘I noticed’ have a powerful subconscious effect on people because they send a subliminal message to them that they stood out in the crowd, that they are attractive or charismatic or that they impressed you. People love recognition and attention.
You don’t sell products, benefits or solutions — you sell feelings. You may begin with some small-talk to establish rapport but do not let them take control of the conversation. You must be very aggressive during these conversations to in order to push them out of their comfort zones.
Money is never a reason for not enrolling in Trump University; if they really believe in you and your product, they will find the money.
Trump, of course, is responding to the trial with his usual demeanor: that of a seven year-old, screaming insults on the playground. Here are a couple of examples tweeted by the twit.
I have a judge in the Trump University civil case, Gonzalo Curiel (San Diego), who is very unfair. An Obama pick. Totally biased-hates Trump.
I should have easily won the Trump University case on summary judgement but have a judge, Gonzalo Curiel, who is totally biased against me.
Then, last Friday at a rally in San Diego, hairball said,
I have a judge who is a hater of Donald Trump, a hater. He’s a hater. The judge, who happens to be, we believe, Mexican, which is great. I think that’s fine.
The judge was born in Indiana.
Trump’s lawyers have managed to get the fraud trial postponed until after the election. That raises the possibility of a sitting president having to testify under oath in court as to whether he perpetrated a $40 million dollar fraud.
On May 32, 2010, Trump University morphed into the Trump Entrepreneur Initiative. He got sued over that one too. In a New York trial, he was found personally liable for running an unlicensed school and ordered to pay restitution to approximately 800