Donald’s Yuge Problem? Inside the Trump Entrepreneur Initiative

By Derek Willie

Derek Willie is a freshman at the University of Pennsylvania.

With the 2016 Presidential primary contests well under way, anything with the name “Trump” emblazoned on it is likely to elicit ire in both liberals and conservatives. The now defunct Trump Entrepreneur Initiative, formerly known as Trump University, is no exception. Recently, a court allowed a $40 million suit filed against the “university” by the New York Attorney General Eric Schneiderman to proceed, suggesting that the real estate mogul’s legal woes are far from over. [1] But what exactly is Mr. Trump being accused of? Let us examine the case against him and his defense.

Schneiderman first claims that Trump was never allowed to label his initiative a “university” as he lacked approval from the New York State Department of Education, but did so regardless. While Trump later removed the word from the title of his educational exploit, the initiative still functioned illegally in the years prior to the name-change. Furthermore, Schneiderman contends, Trump encouraged his customers to sign up for expensive seminars with “hand-picked” experts in real estate, to “be taught Donald Trump’s very own real estate strategies and techniques.” [2] Yet, according to the Attorney General, Trump neither selected nor verified the instructors, many of whom had no experience in real estate whatsoever. [3] The Attorney General’s office called Trump’s purported deceit a “bait-and-switch” scam, whereby, according to Vox’s Libby Nelson, “people are told that the real benefits they want are only available if they keep paying, essentially urging them to throw good money after bad.” [4] [5] The Trump University students signed up for free initial seminars, but were told that in order to acquire the real-estate techniques, they would need to sign up for a $1,495 three-day seminar.

Instead of teaching the logic behind Mr. Trump’s success in real estate as was promised, the expensive seminars encouraged students to purchase individual training with one of the instructors through the “Elite mentorship program,” starting at $10,000. Even in the elite program, some students never received individual training from a mentor and were left bankrupted, still unable to execute real-estate deals. [6] In addition to these hefty accusations, the Attorney General alleges Trump University’s dealings to be even more insidious: the “university” would investigate the financial status of each student and advertise the more expensive sessions to the wealthiest students. It also encouraged participants to open credit under the pretense that their credit scores would go up, so that the students would have more money available to pay for the sessions. [7]

Of course, Mr. Trump vehemently denies the allegations, which have, for conservative groups opposed to Trump, conveniently coincided with his tremendous success in the Republican presidential primary. Moreover, the businessman accuses Mr. Schneiderman of attacking Trump University for political purposes. In fact, Trump devoted a website to dismissing the fraud allegations raised by Mr. Schneiderman, describing the site as an effort “to bring to the public's attention the gross incompetence of New York State Attorney General Eric T. Schneiderman.” [8] Along with levying ad hominem attacks against the investigation, the website sites a 98% approval rating for the “university” among its students (hence its URL, http://www.98percentapproval.com) and posts surveys suggesting near-perfect instructor evaluations and program feedback. Still, Mr. Schneiderman questions the credibility of these results, claiming that the program did not offer anonymous evaluations and encouraged its participants to respond favorably to the curriculum if they wanted to remain in good standing with Mr. Trump and his “university.” [9]

Despite the severity of the claims against the Initiative, it is important to note that they are still merely allegations and have not yet been proven. Still, that a judge has allowed the suit to proceed in New York and similar suits have been filed by complainants in San Diego indicates that the Trump University case will not likely be settled easily. If what Mr. Schneiderman and his colleagues assert is true, then it’s possible Mr. Trump’s actions could finally disrupt his meteoric rise to political stardom and his increasingly more realistic path to the presidency.  



[1] Nelson, Libby. "Bad News for Donald Trump: A Court Strengthened a Fraud Lawsuit against Trump University." Vox. March 01, 2016. Accessed March 02, 2016. http://www.vox.com/2016/3/1/11141692/trump-university-fraud-lawsuit.
[2] "A.G. Schneiderman Sues Donald Trump, Trump University & Michael Sexton For Defrauding Consumers Out Of $40 Million With Sham "University"" A.G. Schneiderman Sues Donald Trump, Trump University & Michael Sexton For Defrauding Consumers Out Of $40 Million With Sham "University" August 25, 2013. Accessed March 02, 2016. http://www.ag.ny.gov/press-release/ag-schneiderman-sues-donald-trump-trump-university-michael-sexton-defrauding-consumers.
[3] Stackpole, Thomas. "The 9 Wildest Complaints Against Trump University." Mother Jones. August 26, 2013. Accessed March 02, 2016. http://www.motherjones.com/mojo/2013/08/donald-trump-university-new-york-lawsuit
[4] "A.G. Schneiderman Sues Donald Trump, Trump University & Michael Sexton For Defrauding Consumers Out Of $40 Million With Sham "University"" A.G. Schneiderman Sues Donald Trump, Trump University & Michael Sexton For Defrauding Consumers Out Of $40 Million With Sham "University" August 25, 2013. Accessed March 02, 2016. http://www.ag.ny.gov/press-release/ag-schneiderman-sues-donald-trump-trump-university-michael-sexton-defrauding-consumers.
[5] Nelson, Libby. "Bad News for Donald Trump: A Court Strengthened a Fraud Lawsuit against Trump University." Vox. March 01, 2016. Accessed March 02, 2016. http://www.vox.com/2016/3/1/11141692/trump-university-fraud-lawsuit.

[6] "A.G. Schneiderman Sues Donald Trump, Trump University & Michael Sexton For Defrauding Consumers Out Of $40 Million With Sham "University"" A.G. Schneiderman Sues Donald Trump, Trump University & Michael Sexton For Defrauding Consumers Out Of $40 Million With Sham "University" August 25, 2013. Accessed March 02, 2016. http://www.ag.ny.gov/press-release/ag-schneiderman-sues-donald-trump-trump-university-michael-sexton-defrauding-consumers.
[7] Nelson, Libby. "Bad News for Donald Trump: A Court Strengthened a Fraud Lawsuit against Trump University." Vox. March 01, 2016. Accessed March 02, 2016. http://www.vox.com/2016/3/1/11141692/trump-university-fraud-lawsuit.
[8] "ABOUT." 98percentapproval. Accessed March 02, 2016. http://www.98percentapproval.com/ABOUT.html.
[9] Stackpole, Thomas. "The 9 Wildest Complaints Against Trump University." Mother Jones. August 26, 2013. Accessed March 02, 2016. http://www.motherjones.com/mojo/2013/08/donald-trump-university-new-york-lawsuit.
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