Aug. 26, 2013 at 10:56 AM ET
Donald Trump claims the New York attorney general who filed a $40 million lawsuit against his "Trump University" is “a total lightweight.”
New York attorney general Eric Schneiderman filed the suit on Saturday, claiming “Trump University” defrauded more than 5,000 students by steering them into expensive and useless seminars on real estate-investing techniques while promising to make them rich.
In a spirited phone call to TODAY Monday, Trump claimed that Schneiderman was soliciting him for campaign contributions in the midst of the investigation.
“During the investigation, he was asking people in my firm, including one of my lawyers, for campaign contributions,’’ Trump said. “Who ever heard of this? He’s asking for campaign contributions while he’s looking into Trump. I mean what kind of an attorney general is this?”
"All prosecutors are used to people who can't respond to allegations in a complaint making crazy allegations to distract from them,'' Schneiderman told Richard Lui on MSNBC's "Jansing and Co." on Monday. "Mr. Trump supported someone else against me in 2010. After I had won the Democratic primary, he gave me a check. That's the last money he ever gave to me. The facts of the complaint speak for themselves. This was a massive fraud."
Trump refuted the allegation that the seminars and packages misled students and did not live up to their advertised claims. Schneiderman claims his department has received "dozens and dozens" of complaints about the program with "more pouring in every day." He said one of the program's claims — that it had insider information about lenders — turned out to be photocopied pages out of a popular magazine.
“I think that the students that enrolled knew exactly what they were doing and what they were getting,’’ Trump said on TODAY. “After the seminars and after they finished the courses they were given an application to sign, or like a report card on us. ‘What do you think of the job that they did? What did you think of the instructors?’ We had a 98 percent approval.”
"This is a very, very classic bait-and-switch scheme where they were promised that they were going to learn the secrets of success in real estate,'' Schneiderman said. "They took people who couldn't afford it, who were desperate for money, and got them to pay them $40 million. This was not a university. People were not taught real-estate secrets. It was a fraud.''
The school provided nearly 11,000 testimonials to Schneiderman from students praising the program and said 98 percent of students in a survey termed the program "excellent," Trump's attorney, Michael D. Cohen, told The Associated Press. When asked for comment, Cohen's office referred TODAY.com to a website, 98percentapproval.com, set up to refute the claims of the lawsuit. It features links to more than 10,000 surveys from 2007-2010 that it says are "from Trump University students demonstrating their overwhelming satisfaction with the program."
The program, which has no actual campus, offers a three-day real estate investment seminar that costs $1,495, a “Trump elite” package for $10,000 and a personal mentorship for up to $35,000.
In 2011, the school was renamed the Trump Entrepreneur Institute after New York State Education Department officials told Trump he had to change the name because it didn’t have a license and did not meet the legal definitions of a university.
“We filed an application,’’ Trump said. “The application was accepted and it was signed by a person in the state, but they ultimately came back and said, ‘You’re not allowed to use the word ‘university,’ so we changed the name. We took the word ‘university’ out.”
State Board of Elections records show that Trump contributed $12,500 to Schneiderman’s campaign in 2010, but he had harsh words for him on Monday.
“We’re dealing with an attorney general who everyone in New York knows is a total lightweight,’’ Trump said. “He’s very unpopular. He lets Jon Corzine take $1.4 billion dollars and doesn’t do a thing. He lets Wall Street and everybody else rape everybody, and doesn’t do a thing. He goes after Donald Trump for his school that has a 98 percent approval rating.”
Trump plans to proceed with the case rather than settling it out of court.
“We could’ve settled this case very easily,’’ Trump said. “He thought I would settle it because he said I wouldn’t take the bad publicity. I get plenty of bad publicity, I’m used to it, and frankly I didn’t want to settle the lawsuit. They wanted to settle the lawsuit, I didn’t want to settle the lawsuit on principle. The school is a great school, and it’s really a shame.”
According to the lawsuit, Trump University encouraged students to go into debt to pay for the elite programs and Trump did not hand pick his instructors as he claimed. Trump refuted those allegations on Monday.
“I was involved to a very high degree,’’ Trump said . “Obviously it’s not my main business, but applications, resumes, I met with people. I had a lot to do with it. I had a lot to do with what they discussed.
“As you know better than anybody, I was one of the good people in terms of picking the bad housing market. I told people what to do, and if they would’ve listened to me, they would’ve made a lot of money. The school was terrific. (It) had a 98 percent approval. Harvard or the Wharton School doesn’t have a 98 percent approval.”
"The teachers were not hand-picked,'' Schneiderman said. "The president of the university has already testified that Trump didn't pick them. He thinks (Trump) only met one of them, ever."
The lawsuit alleges that students were encouraged to buy more and more expensive packages.
“According to the complaint, the students were part of an elaborate bait-and-switch scheme where they just kept getting upsold and upsold and upsold, and paid more and more money in the hopes of getting the Donald Trump real estate investment secrets that they never actually got,” former federal prosecutor Aitan Goelman told TODAY on Monday.
"We've gotten their playbook, which is their guidelines to instructors,'' Schneiderman said on MSNBC. "We've gotten the testimony of the former president of the university. This was a scam from top to bottom. They were telling people to raise the limits on their credit cards — who did — so they could then use that money to buy more Trump programs."
Trump believes his school is being unfairly singled out.
“You turn on television late at night, you’ll see hundreds of people, hucksters, going around, and none of these people get sued,’’ he said. “Instead they sue Donald Trump.”