Predators, by and large, do not attack the strongest prey in the wild. They instead target the vulnerable, the very young, and the very old—the prey that is least able to defend itself.
Trump University, the defunct real-estate education program created by presumptive Republican nominee Donald Trump, pursued a similar approach, according to its former employees in legal documents unsealed Tuesday.
“Based upon my personal experience and employment, I believe that Trump University was a fraudulent scheme, and that it preyed upon the elderly and uneducated to separate them from their money,” said Ronald Schnackenberg, a sales manager at Trump University in 2006 and 2007.
Those declarations and other internal Trump University documents depict an aggressive, ethically dubious business model that targeted potential customers’ financial fears and socioeconomic anxieties and offered Trump’s personal brand as the solution—a strategy later echoed in his presidential campaign.
In his declaration, Schnackenberg recounted meeting a couple after a live event in New York City in 2007. Apparently swayed by the presentation, they expressed an interest in purchasing a $35,000 Trump Gold Elite program, the most expensive tier available.
“I did not think it was an appropriate program for them because of their precarious financial condition—they had no money to pay for the program, but would have had to pay for the program using disability income and taking out a loan based upon equity in his apartment,” he testified. “Trump University reprimanded me for not trying harder to sell the program to this couple.”
A different salesperson closed the deal with them. “I was disgusted by this conduct and decided to resign,” Schnackenberg said.
Schnackenberg made the declaration in September 2012—about three years before Donald Trump announced his presidential bid—as part of a class-action lawsuit against the businessman by former Trump University customers. The declaration and other trial documents remained under seal until Tuesday after federal judge Gonzalo Curiel—a newfound target of Trump’s stump-speech anger—ordered many of them to be made public Friday in response to a public-interest motion by the Washington Post.
For a Trump University employee, failure simply meant the abstract loss of potential profit. For a Trump University student, however, failure could mean financial ruin.
Official scripts and guidelines in Trump University’s sales playbooks harnessed this fear to drive prospective buyers towards the product. During one-on-one sessions after the $1,500 second-tier seminar, the playbook encouraged salespeople to assess each customer’s fears, goals, and financial status, then “close the deal” on the next tier of seminars.
“When you introduce the price, don’t make it sound like you think it’s a lot of money, if you don’t make a big deal out of it they won’t,” the playbook advises. “If they can afford the gold elite don’t allow them to think about anything besides the gold elite.” The Trump Gold Elite package, which included a series of retreats, a three-day “in-field mentorship,” and a free trial on foreclosure-tracking software, cost $35,000.
If the customer hesitated, the playbook offered a sample text to “push them out of their comfort zone” by criticizing their financial status.
“It’s time for you to be 100% honest with yourself,” the suggested text read. “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.”
The playbook also includes rebuttals to common concerns about spending up to $35,000 on a series of seminars. For example, if customers want to try real-estate investing on their own, salespeople were told to pepper them with technical questions about their business plan, apparently to undermine their self-confidence.
“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?” the playbook offers as suggested dialogue. “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,” the playbook then reminds the employee.
Amidst this sea of imagined dangers, the salesperson would then pivot to pitch Trump University as a lifeboat. “The risk isn’t spending 35K – it’s entering into the world of REAL ESTATE without specialized knowledge, guidance and trained professionals in the field holding your hand,” the playbook’s rebuttals said. “WE are the safe decision.”
The playbook frequently tells Trump University employees to lean on the instructors’ and mentors’ wisdom as a selling point. But Jason Nichols, a Trump University sales executive who worked for the company in 2007, challenged this depiction in his declaration to the court.
“The Trump University instructors and mentors were a joke. Most of them were not experts in real estate and did not [have] experience in the real estate techniques they were teaching,” Nichols said. “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.”
Other rebuttals suggested by training materials likewise appealed to customers’ insecurities while invoking Trump’s success. What if customers say they want to invest that $35,000 fee in property instead? “You have no specialized knowledge or system to fall back on,” the playbook suggests. “Mr. Trump doesn’t use his own money to invest and look at his success!”
Or a customer might say they have enough information to invest on their own. “But what we’re offering is a proven system from Mr. Trump to help you close multiple deals every month, with a millionaire mentor by your side making sure you don’t make any mistakes, and creating the most amount of profit per deal,” the playbook counters. “Let me ask you a question; are you capable of making one or two mistakes on your own?” (In parentheses, the salesperson is instructed to smile while saying these lines.)
The scripts and rebuttals emphasize the risk of not taking part in the program while evading its inherent risks. What if the customer doesn’t want to go into debt by purchasing the seminars? “Every single company goes into debt when they are first starting out, EVERY SINGLE BUSINESS!” the playbook says. “The profits pay off the debt and before you know it, your new real-estate business will start making amazing returns.”
Corinne Sommer, the former manager of Trump University’s events departments, recalled how instructors in the second-level seminars, which cost roughly $1,500 to attend, would ask customers to call their credit-card companies to triple or quadruple their credit limit and max out their credit cards for real-estate investments.
“While Trump University’s advertisements claimed it wanted to help consumers make money in real estate, in fact, based upon my experience, I believe that Trump University was only interested in selling every person the most expensive seminars they could possibly buy on credit,” Sommer testified. “I recall that some consumers had showed up who were homeless and could not afford the seminars, yet I overheard Trump University representatives telling them, ‘it’s ok; just max out your credit card.’”
Not everyone proved unhappy; the filings also included testimony from many graduates of Trump University who professed themselves delighted with the decisions they’d made.
Trump University came to an end five years before Trump’s presidential campaign officially began. But both products rely on a similar three-part strategy. The first part is an emphasis on insecurity. For Trump University’s sales team, that meant focusing on the customer’s personal financial shortcomings when closing a deal. For Trump himself, it manifests as stump speeches bemoaning the decline in American manufacturing, the peril of illegal immigration, the rise of China and ISIS, and how “we don’t win anymore.”
These insecurities may or may not be grounded in reality. But the solutions to them often aren’t. Trump University promised an easy path to wealth and success in the real-estate market just as the housing bubble was about to burst. (“Let’s get you enrolled today so you can start building a real estate empire,” reads one suggested line from the playbook.) Trump’s campaign solutions are even more grandiose, ranging from a giant wall on the U.S.-Mexico border to a military so large and strong “we’ll never have to use it.”
The third part is Trump, or, perhaps more accurately, Trump’s personal brand, in all its coiffed and gilded glory. Decades of effort invested in making a surname synonymous with business acumen and extravagant wealth imbued Trump University with a legitimacy it could not otherwise acquire. Trump himself also relies on this on the campaign trail—not the name recognition, but its association with “winning.” For both Trump and Trump University, the goal is for prospective customers and potential voters alike to think his success can rub off on them, too.
But that payoff may never come. “I do not believe that Trump University taught Donald Trump’s investing ‘secrets,’” one former Trump employee testified. “Donald Trump came from a wealthy family and had resources at his disposal to purchase real estate—that is the secret—one the average consumer could not replicate.”
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