by Nomad
Unsealed documents from Trump University reveal some of the sophisticated techniques the recruiters used to break down prospective students' resistance. Many of them paid a very heavy price for their trust in Trump and his university.
The manual- Exhibit D in the trial- does not paint a very flattering portrait of the operation nor the man behind it.
Overall, the university playbook sounds nothing like an educational institution and much more like a high-pressure telemarketing sales campaign. That is confirmed by insiders who witnessed the operations for themselves.
Said one top university official in her testimony:
In my experience, the focus of Trump University was on making sales rather than providing quality educational services. Trump university would lure consumers into the initial free course based upon the name and reputation of Donald Trump, and then, once they were there, Trump Univeristy personnel would try to up-sell consumers to the next course using high pressure sales tactics. Far from providing a "complete real estate education," as advertised, Trump University only provided enough information to get students to sign up for the next seminar or program.
That claim is supported by the sales manual and, importantly, that manual was not the work of some underling in the organization.
According to depositions by former Trump University staffers, Trump personally approved of many of the ads and may have been integrally involved in crafting some of the "deceitful scripts that school reps used to con prospective students."
The former president of Trump University, Michael Sexton, claims under oath that Trump was "deeply involved in planning various marketing materials and personally gave his OK 'anytime we had a new ad.'"
“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.”
So it is not easy for Trump to distance himself from what is written there.
The Magical Roller Coaster of Trumpland
In the two-step sales process, recruiters are instructed on how "to build up a relationship of trust" and how to close the sale. This sales process, the guidebook states, on "managing the emotions of the client by focusing on the psychology of the sale." The technique that students are put through is likened to a "roller-coaster" of emotions.
The first step, according to the materials, is to get them excited about their dreams and to get them realize they have taken the necessary steps to fulfilling those dreams. In other words, recruiters attempted to shame prospective clients.
When trying to persuade the prospective students, the salesman is then instructed always to "stoke their ego" when they have given the appropriate responses. Flattery, in fact, is used throughout the sales process, mainly as a means of luring students into a sense that they are in control of the situation. The roller coaster effect is designed to produce "an emotional high and a sense of relief.
If they start to sell themselves on why they should sign up for the program, the guidebook states, then "you did a job up to this point." Once the client is doing most of the work for the recruiter, the sale is now practically in the bag. That's why the word "confidence" is a key feature in the art of the con.
When the prospective student mentions the cost, recruiters are advised to ask about the details of personal credit, i.e. what limits the banks have extended and at what interest rate, how much debt is on each credit card. This private information is provided to the sales team voluntarily in the hopes of qualifying for the program. If there was any sign of hesitation, the recruiters would say that learning the credit history was a normal part of the application process.
"We need to see what sort of debt you need to take care of to determine if this is something we can help you with. That makes sense, doesn't it? We also need to determine you debt to income ratio. That helps us guide you as to what sort of real estate projects it would be best for you to start with, Are you with me? Now, how much do you have on the first card....."
In effect, recruiters take on the role of credit advisor as if they were impartial financial specialists, instead of high-pressure telemarketers.
You might think that supplying such valuable information to a complete stranger is something that no intelligent person would do, but that's just a sign of how effective the Trump University sales technique could be for a lot of its victims.
When recruiters were asked specific questions, the answers were cleverly vague. For example, if recruiters are asked "how long will take to see a return on my investment if I do sign up for the Trump University program?" they were advised to say that the results depended on how aggressive they were in putting this valuable information and insider techniques into effect.
In that case, recruiters were ready with the appropriate reply:
"I understand how you feel. Many of my clients have felt the same way at one time or another. However, what we've found is that if someone is hesitant to invest a few thousand into their education.. what are we supposed to expect from them when their Real Estate Coach is talking with them about investing TENS of thousands or even HUNDREDS of thousands of dollars in a piece of property?"
The implication is this part of the pitch is clear. The recruiter is suggesting that the client may simply not bold and daring enough to join the big leagues. Man up and take the risks or be a loser all your life.
If you want to be as rich as Donald Trump, then you have to be as ballsy as Donald Trump and that means taking risks that you cannot afford, possibly losing your life savings, your home and the respect of your family and friends.
A former employee, Corrine Sommer, states that she personally witnessed instructors asking students during a $1500 seminar "to call their credit card companies and to raise their credit limits three or four times so that they would be able to invest in real estate."
"They would tell students to max out their credit card because they would make their money back."
The problem was that it was a promise based on a lie. Even as these poor people were being coaxed into falling deeper in debt, the economy was beginning to list.
The economic crash had already begun.
The economic crash had already begun.
A Mindset that Launched a Thousand Miseries
It didn't take much nudging and cajoling from professional sales people at Trump University to convince their clients that their dream of joining the 1% was only a seminar and signature away. Keep in mind too that the real experts at Trump University were advising people not only to invest all the money they had- but also all of the money they could borrow.
That was in 2007 and just before the real estate market would collapse.That's not a coincidence.
The mindset outlined in the Trump University was that borrowing vast amounts of money based on the advice of strangers- showed initiative, not stupidity.
Once enrolled, this deeply-flawed approach was magnified still further.If students were willing to borrow simply to become a student, they would also be more than willing to proceed to borrow on shaky credit to attain their real estate ambitions.
Analysts today think the entire housing bubble was based exactly on this dangerous philosophy that Trump was promoting. Borrow, borrow and borrow because things are only going to get better and now is the time to take advantage.
And plenty of people were definitely taking advantage.
As one source points out:
The federal reserve and banks praised the housing market for helping to create wealth and provide a secured asset that people could borrow money to help the economy grow.
There were all sorts of new lending types such as interest adjustable loans, interest only loans and zero down loans which made it all too easy to take the plunge. It was as if money was hanging on the branches, ready for somebody with a basket and a ladder to come and get as rich as Donald Trump.
The problem was that it was, in many respects, a Ponzi scheme.
With each loan, banks would quickly securitize the loan and pass the risk off to someone else.
Each time the risk was passed along, it would grow until it would be unsustainable. The last people who signed up were the ones most likely to lose everything. And 2007 - the time when Trump University was peddling its pitch- was the last minute before the bubble popped.
Like all financial bubbles, it was no place for the novice, no place for those lacking the experience to distinguish the difference between an opportunity and a risk. When the housing bubble burst, it sent the economy reeling.
You can say that people really ought to have known better. Con artists will tell you that the success of any scam depends on the ignorance, the pride and the greed of victims. And with Trump, greed has always been considered a virtue of the bold.
First came the 2007 subprime mortgage financial crisis. Former Fed Chairman Alan Greenspan admitted that the real estate opportunities that had once been the Trump University's indirect source of income, had in fact, been an illusion. Greenspan was then warning that "large double digit declines" in home values "larger than most people expect."
That must have been the moment when a lot of Trump University's graduates realized that something was very very wrong. Things were not as easy (or as profitable) as they had been lead to believe by Trump's supposed experts.
That must have been the moment when a lot of Trump University's graduates realized that something was very very wrong. Things were not as easy (or as profitable) as they had been lead to believe by Trump's supposed experts.
By 2008, the economy would be in free-fall. Millions of American, the vast majority had not gambled with illusionary opportunities from real estate schemes, lost their homes, their jobs and their savings to the financial crisis and recession. The value of homes would be reduced to nothing and Roughly 7 million Americans lost their homes during the Great Recession.
Treasury Secretary Henry Paulson proposed Congress approve of a bank bailout to the tune of $700 billion. Otherwise, the entire economy system could collapse. The Emergency Economic Stabilization Act of 2008 was signed into law by President George W. Bush on October 3, exactly one month before the presidential election.
And the first step in this economic catastrophe was getting people to invest as much- indeed, more than- they could afford. When the value of the property crashed, they were stuck paying mortgages more than the value of the property with little hope that the value would ever return to the bubble days.
In this way, the housing bubble began, for many people, with Trump University.
In this way, the housing bubble began, for many people, with Trump University.
Today, the Republican candidate has reached the top of the political mountain and will soon very likely become the nominee of his party. In his bid for the White House, he is supported by the middle-class voters who were the main victims of the 2008 economic collapse.
More than a Brand, A Man and his Reputation
But there's one more thing, one key ingredient that has to be recognized. It is important to realize that, as psychologically sophisticated as this sales approach is, it could never have been quite as successful without one critical factor. The name and reputation of Donald Trump.
He served not merely as a figurehead or a brand name but as a guarantor of trust. He was famous, fabulously rich, living the life that any average Joe or Jane could just dream about. Through his reality TV show, The Apprentice, (the first season aired during winter and spring of 2004) Trump took on the role as the mentor, the hard-nosed entrepreneur who could magically turn a dime into a dollar and water into wine. His books were more than boasts about how he got rich. They were invitations to imitate him.
Given that, it was perhaps inevitable that recruiters would be asked how close they could come to the Wizard of Oz.
From the Trump University Playbook:
A lot of people have asked if Mr. Trump can meet with them in person and show them how he finds prioperties; how Mr. Trump evaluates properties and how he uses creative financing to acquire properties with little or "preferably" No-Money Down. Obvously Mr. Trump can't meet with everyone, nor does he want to. So, he has also created an (insert program name based on lead information) where we only invite a select group of people that have been hand-picked by his Program Director.... These instructors will be holding your hand, physically showing you the way. You will learn how to succeed "The Trump Way!" These instructors are experts in today's Real Estate world and teach all of the non-traditional and unconventional ways of buying and selling real estate.
And here's the clincher:
Let me ask you (name) is everything Donald Trump does, the BEST? He wouldn't put his name on this, if it wasn't, right? Do you feel that working with Mr. Trump's experts is something you would like to be considered for?
The problem with this pitch is that, in order for a recruiter to associate Donald Trump with the experts, there has to be a direct connection between the Big Guy and the instructors.
Without Trump signing off on all things, the expert opinions would not really count for very much. It might as well be Joe-schmoe Univeristy.
So, a person who was hand-picked by a Program Director who was hand-picked by Trump doesn't count for much. Trump is a name that resonates.
Thus, Trump took up the slack and claimed that “many of” the university’s instructors were “handpicked” by him. He claimed:
Without Trump signing off on all things, the expert opinions would not really count for very much. It might as well be Joe-schmoe Univeristy.
So, a person who was hand-picked by a Program Director who was hand-picked by Trump doesn't count for much. Trump is a name that resonates.
Thus, Trump took up the slack and claimed that “many of” the university’s instructors were “handpicked” by him. He claimed:
"We're going to have professors and adjunct professors that are absolutely terrific people, terrific brains, successful. We are going to have the best of the best... and these are people that are handpicked by me."
Unfortunately, this necessary deception was exposed in a 2012 deposition of a top executive for Trump University. He told the investigators that “none of our instructors” was picked by Trump himself. Another deposition states:
Trump university instructors and mentors were not hand-picked by Donald Trump. I believe that in many instances Donald Trump had neither met the instructors or mentors nor did he know who they were. Instead, I recall that Trump Univeristy hired its speakers and mentors through Mark Dove in New Hampshire who hired and trained a number of real estate sales people that he provided to Trump University. These people did not necessarily have real estate experience, but they were skilled at high-pressure sales.
Furthermore, according to that testimony, two of the staff were fired because they went off the script and attempted to get students to invest in their own personal businesses.
According to his own deposition, Trump couldn't recognize even one of his hand-picked presenters or instructors from his real estate seminars. Under oath, he was forced to admit that he had nothing to do with the selection process of instructors who taught at the school's events or mentors for the school's "Gold Elite" programs.
Many of the instructors lacked real estate experience, many did not even own their own homes had no experience buying or selling real estate. One former employee recalls an ex-jewelry salesman without any real estate experience, being drafted to be a speaker and seminar instructor after just a year of working for Trump University.
The Truth about Legitimacy and Favorable Reports
The quality of the "hand-picked" staff wasn't the only fib Trump was telling.
There were a lot of dubious claims that Trump made about the legitimacy of his university. For example, at one time, Trump said that the so-called university “had an A rating from the Better Business Bureau.” Actually, it once had an “A+” rating, according to a Better Business Bureau spokeswoman. But its most recent rating before it was closed its doors was a “D-.”
There were a lot of dubious claims that Trump made about the legitimacy of his university. For example, at one time, Trump said that the so-called university “had an A rating from the Better Business Bureau.” Actually, it once had an “A+” rating, according to a Better Business Bureau spokeswoman. But its most recent rating before it was closed its doors was a “D-.”
One last puzzle to resolve. If the university was such a con scheme why did so many of its clients claim to be satisfied with the results?
The overview from sales playbook claims that clients report a 95% satisfaction rating with their experience. However, the New York Times reported that there was a lot more to that story.
Interviews and documents show that employees of Trump University at times applied pressure on students to offer favorable reviews, instructed them to fill out the forms in order to obtain their graduation certificates, and ignored standard practices used to ensure that the surveys were filled out objectively.
Said one not-too-satisfied student (who wanted the $36,000 he had spent on Trump University classes back):
“It’s absolutely a con. The role of the evaluations was a defense against any legal actions. They anticipated those actions.”
In effect, students were forced to make a decision between their graduation certificates - without might at least impress some people- and their right to future legal action against Trump University.
According to the recently released testimony from former Trump University staffers Ronald Schnackenberg and Corinne Sommer, Trump's involvement in the Trump University scheme was on a direct level, "bilking thousands of students out of millions of dollars in tuition costs — which could run as high as $35,000."
The sales manual that Trump apparently approved of (and probably partially drafted) gave a demonstration to all of the sales reps of the fake university exactly how to seduce potential students into sign up for expensive but probably worthless courses.
Today Republican nominee Donald Trump is attempting to con a new set of victims and surprisingly- given his history- he has so far been remarkably successful.
But then, if the Trump University playbook is any indication, he understands the fine art of manipulation extraordinarily well. And it also shows that there is never a shortage of gullible people who will follow Trump to the edge of the cliff.
