The Washington PostDemocracy Dies in Darkness

Donald Trump said ‘university’ was all about education. Actually, its goal was: ‘Sell, sell, sell!’

Donald Trump, left, listens as Michael Sexton introduces him during a 2005 news conference in New York, where he announced the establishment of Trump University. (Bebeto Matthews/AP)

When Donald Trump introduced his new university from the lobby of his famous tower, he declared that it would be unlike any of his other ventures.

Trump University would be a noble endeavor, he said, with an emphasis on education over profits. It was a way for him to give back, to share his expertise with the masses, to build a “legacy as an educator.”

He wouldn’t even keep all the money — if he happened to make a profit, he would turn the funds over to charity.

“If I had a choice of making lots of money or imparting lots of knowledge, I think I’d be as happy to impart knowledge as to make money,” Trump said at the inaugural news conference in the spring of 2005.

The launch of Trump University coincided with two auspicious developments for the real estate mogul: Through his then-year-old hit TV show “The Apprentice,” the billionaire was developing an image as America’s savviest boss, while the nation’s booming real estate market was giving hope to many who dreamed of striking it rich.

Ads touted Trump University as “the next best thing to being Trump’s apprentice.” Trump, who every week on TV singled out someone to be fired, pledged in a promotional video to “hand-pick” instructors. “Priceless information” would help attendees build wealth in the same real estate game that made Trump rich.

In the end, few if any of these statements would prove to be true.

Trump University was not a university. It was not even a school. Rather, it was a series of seminars held in hotel ballrooms across the country that promised attendees they could get rich quick but were mostly devoted to enriching the people who ran them.

Participants were enticed with local newspaper ads featuring images of Trump, then encouraged to write checks or charge tens of thousands of dollars on credit cards for multi-day learning sessions. Participants were considered “buyers,” as one internal document put it. According to the company’s former president, Trump did not personally pick the instructors. Many attendees were trained by people with little or no real estate expertise, customers and former employees have alleged in lawsuits against the company.

“I was told to do one thing,” said James Harris, a Trump University instructor whose sessions have been repeatedly cited in the litigation, in an interview with The Washington Post. “And that one thing was: . . . to show up to teach, train and motivate people to purchase the Trump University products and services and make sure everybody bought. That is it.”

A Trump spokesman said Harris’s comments “have no merit” and accused Harris of “looking for media attention to further his own agenda.”

All told, Trump University received about $40 million in revenue from more than 5,000 participants before it halted operations in 2010 amid lawsuits in New York and California alleging widespread fraud. The New York attorney general estimated Trump netted more than $5 million during the five years it was active. He has since acknowledged that he gave none of the profits to charity.

This account is based on a review of hundreds of pages of internal company records that have become public as a result of the lawsuits, as well as new interviews with former Trump University employees and customers.

Many of the company’s internal records, including several “playbooks” that advised employees on strategies for pressuring customers, were unsealed in court over the past week in response to a request by The Post.

Trump and his lawyers have vigorously disputed the allegations, predicting that they will win in court and reopen the business. They point to positive customer-satisfaction surveys that have been submitted in the lawsuits and suggest they have been unfairly targeted by trial lawyers and a politically motivated attorney general in New York.

“We continue to believe that people got substantial value and that people were overwhelmingly satisfied,” said Trump’s general counsel, Alan Garten. “We are not going to be stopping what we are doing. We are going to continue to zealously defend this case because, at the end of the day, we know we are not being tried by The Washington Post or by CNN — but in a courtroom by a jury.”

Garten acknowledged that Trump never gave away the profits to charity. He said it was always Trump's intention but that the lawyers leading the class-action suits against the company "got a hold of this and . . . whatever profits existed sort of evaporated." The unfulfilled promise was first reported last year by Time magazine.

In his defense, Trump has often cited the many positive reviews by former customers. A number of them submitted sworn statements in court explaining their positive experiences at Trump University.

Kissy and Mark Gordon, who own a residential development company in Virginia and jointly signed up for the most expensive program in 2008, said in an interview that they still use techniques they learned from the course today.

“Did we have an expectation that Trump was going to teach us? No,” Kissy Gordon said. “We have a building background and the economy changed, and we were looking for something in the same field to do something with it. So we were there to learn.”

Gregory Leishman, another former customer, recalled speaking to his assigned Trump University mentor on the phone weekly and touring potential properties for purchase with him in New Haven, Conn. “They gave me information I didn’t have otherwise,” he said. “You can probably get all that information from reading books. But Trump University was a crash course. You pay more, you get more.”

Nonetheless, the company has emerged as one of the most potent lines of attack against Trump’s campaign for president.

In the Republican primary, Sen. Marco Rubio (Fla.) cited it as a “fake university” and sought to use it to help build a case that Trump was a “con artist.”

In recent days, Democratic presidential front-runner Hillary Clinton and her campaign have picked up on that theme.

“Trump U is devastating because its a metaphor for his whole campaign: promising hardworking Americans a way to get ahead, but all based on lies,” tweeted press secretary Brian Fallon.

Trump also last week invited a torrent of criticism, including from legal scholars on the left and right, for accusing the judge presiding over the California suits, U.S. District Judge Gonzalo Curiel, of being biased because he is of Mexican descent. Trump has said that Curiel is “Mexican,” although the 62-year-old was born in Indiana, and that because Trump wants to build a wall on the U.S.-Mexico border the judge cannot properly do his job.

The focus on Trump University also reignited a controversy in Texas over the decision there by the state attorney general not to file a fraud case against the business. Newly disclosed documents reported by Texas media show that investigators had probed the company for seven months and recommended a lawsuit. The inquiry was shut down when Trump University closed up shop in the state.

Trump later gave $35,000 to the gubernatorial campaign of then-Attorney General Greg Abbott. A spokesman for Abbott, now the Republican governor of Texas, has said it’s “absurd” to suggest a connection between the case and the donation that came several years later and that Trump University was “forced out of Texas and consumers were protected.”

Garten also dismissed any connection between the Texas decision and Trump’s donation, saying investigators reviewed “a few complaints . . . and decided not to proceed.”

‘Sell, sell, sell’

The Trump University sales pitch began at free seminars, such as one hosted at a Holiday Inn just outside of Washington in 2009.

In downturn, aspiring moguls turn to Trump U. for wisdom

A placard outside the ballroom read, “Trump, think BIG.” Inside, aspiring real estate investors heard the theme song from “The Apprentice,” the O’Jays classic, “For the Love of Money.”

Then, a Trump University instructor took the microphone. “All right, you guys ready to be the next Trump real estate millionaire? Yes or No!?” he yelled, according to a Post account at the time.

The purpose of these free 90-minute introductions was not to turn attendees into millionaires, but rather to “set the hook” for future sales, according to employee playbooks.

The playbooks directed leaders of the free seminars to conclude introductory events by getting “in the sales mindset,” “ready to sell, sell, sell!”

Three-day courses typically cost $1,495, the records show. But people who paid to attend them were then urged to sign up for even pricier “elite” programs.

A “workshop enrollment form” distributed to participants laid out the options in categories, starting with the “Trump Gold Elite” program. At $34,995, it was the most expensive option — providing three days of personal, in-the-field mentorship as well as special programs on real estate investment, “wealth preservation” and “creative financing.”

The “Trump Silver Elite” package, priced at $19,495, offered real estate and finance training. The “Trump Bronze Elite,” priced at $9,995, offered similar, but fewer, courses.

Employees distributed “profile” surveys on the first day of the seminars, in which participants would outline their financial goals, as well as current assets and liabilities. Attendees were told that the information would help them figure out how much they had to invest in real estate, according to customer complaints.

But in the evenings, after seminars had concluded for the first day, staff members were instructed to use the information to rank each participant according to assets they had available to spend on more Trump University programs.

“If they can afford the gold elite,” the playbook advised, “don’t allow them to think about doing anything besides the gold elite.”

A 43-page “sales playbook” offered guidance on using psychological tools to convince students that they needed to sign up for the classes to fulfill their own goals — overcoming their worries that they might not need or be able to afford the classes.

“Customers don’t have needs — they have problems,” the book advised. “Problems are like health. The more a problem hurts now, the more the need for a solution now. And the more it hurts, the more they’ll be prepared to pay for a speedy solution.”

In a section devoted to “negotiating student resistance,” sales people were offered sample responses to common objections from potential students. If a potential customer said he was concerned about going into debt to pay for the classes, staff were advised to needle them: “I see, do you like living paycheck to paycheck?”

If doubts persisted, staffers were advised to invoke the big boss himself.

“Mr. Trump won’t listen to excuses and neither will we,” the instructors were told to say.

Former students have said they were instructed to call their credit card companies on the spot and raise their borrowing limit to pay for the program.

Harris, the former instructor, recalled one of his typical pitches to urge customers to find money for programs: “Do you have any equity on your home? Do you have a 401(k) or IRA?”

Harris, 47, said he was one of Trump University’s biggest sellers. Garten, Trump’s lawyer, said Harris was one of the most highly rated instructors.

Instructors had to sell hard to turn participants at free seminars into paying customers.

For the four years Trump University operated, more than 80,300 people attended the free introductory sessions. Those previews were offered 2,000 times in nearly 700 locations around the country.

But only around 6,000 people paid between $995 and $1,995 to attend three-day seminars, director of operations Mark Covais said in a 2012 affidavit. According to Covais, 572 people paid the full $34,995 for the top-level Trump University mentorship.

All about Trump

The entire program was built around Trump — his picture, his quotes and the promise of obtaining access to his special formula for prosperity.

One ad for the free Trump University seminars that appeared in a Corpus Christi, Tex., newspaper in 2009 promised attendees that they would “Learn from the Master,” below a picture of Trump.

“I can turn anyone into a successful real estate investor,” read a quote on the ad, attributed to Trump.

The California class-action lawsuit contains 49 separate instances of Trump University attendees being told their instructor or future mentor was personally chosen by Trump in 2009 alone.

“Donald Trump personally picked me,” one instructor told a group at a free seminar in May 2009, according to a transcript of the session filed as part of the New York case. “He could have picked anybody in this world but he picked me and the reason he picked me is because I’ve been very, very successful helping average people make a lot of money.”

Harris, the former instructor, told an introductory meeting of potential customers in 2009 that Trump’s personal generosity was a core element of the program.

“He did not have to start this university,” Harris told the group, according to a transcript in the New York case. “He does not need the money. . . . He does not get a dime of it. Does everyone understand this? Please say ‘yes.’ He does not need the money.”

In one presentation cited in the New York lawsuit, Harris described Trump as instrumental to his own efforts to turn his life around just after high school.

“I lived on the streets of New York, mostly down in the subways for the first nine months, and I did a lot of things to make some money,” he told a group attending a 2008 event. “And then I met a gentleman and he took me in, and I lived with him for a year and he taught me how to do real estate. He is still my mentor today. So the reason I am here is because Donald Trump picked me.”

In an interview, Harris said he met Trump once in the early 1990s, backstage at an event at the Taj Mahal casino. “Here is the truth,” he said. “When I was at Trump University, I had not one interaction with him ever. Not one.”

In reality, the instructors were not close to Trump, and many were not experts in real estate, according to several ex-staffers who have testified in the lawsuits.

“The Trump University instructors and mentors were a joke,” said Jason Nicholas, who worked for the company for seven months in 2007 and submitted a statement in the lawsuit. “In my opinion, it was just selling false hopes and lies.”

Michael Sexton, who was president of Trump University, acknowledged in sworn testimony in the New York case that none of the event instructors were hand-picked by Trump. Trump told lawyers in California that he would not dispute Sexton’s statement — nor could he remember a series of instructors, including Harris, by name or face.

Trump also did not review course curriculum, Sexton said.

“He would never do that,” Sexton said. “Mr. Trump is not going to go through a 300-page, you know, binder of content.”

Only when it came to marketing material was Trump deeply involved, reviewing every piece of advertisement, Sexton testified.

“Mr. Trump understandably is protective of his brand and very protective of his image and how he’s portrayed,” Sexton said. “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.”

Garten, the Trump attorney, said Trump was engaged as any CEO would be in the operations. Outside experts designed the curriculum, Garten said, but Trump was “intimately involved” in the process. While Trump may not have selected every instructor, Garten said he was “very much involved in the process and the discussion of what type of instructor was desired.”

Selling success

At the courses, students were supposed to learn Trump’s secrets of real estate success.

But in sworn testimony in New York, Sexton could recall only one Trump practice that was incorporated into the courses: Invest in foreclosed properties.

The lesson underscored how Trump University, which was formed to teach aspiring business people to profit from the fast-expanding housing market, tailored itself after the 2008 economic crash to offer guidance on profiting from the aftermath.

One ad placed in the San Antonio Express-News in October 2009 promised that seminars would allow participants to “learn from Donald Trump’s handpicked experts how you can profit from the largest real estate liquidation in history.”

At a seminar called “Fast Track to Foreclosure,” students were instructed to find OPM, “other people’s money,” to buy homes out of foreclosure at depressed prices, dress them up with new paint and attractive landscaping — then flip them for profit.

Attendees were advised to use credit cards to invest in real estate, and they were told how to persuade credit card companies to raise their credit limits. If a credit card company representative asked for their income, they were advised to add $75,000 in anticipated earnings from their real estate venture before providing a figure for their expected earnings for the year.

Some customers have also alleged they were told there would be a personal appearance at the session by Trump. Instead, they received the opportunity to get their photograph taken with a life-size cardboard cutout of the mogul.

John Brown, a customer who provided a sworn statement in the New York case, described how he “came to realize that I was not adequately trained, which caused me to feel that Trump University had taken advantage of me.”

Brown said he paid $1,495 for a three-day seminar in 2009 and then used multiple credit cards to charge a $24,995 Trump mentorship program. Three years later, he said he had made no real estate investments using Trump knowledge — but was still paying off $20,000 from the courses.

“Because of the Trump name,” he said, “I felt these classes would be the best.”

Alice Crites contributed to this report.