The report, citing tax records, said Trump had not made a single donation to his charity since 2008 and sometimes used money from others through the foundation to pay off legal expenses.
The money relating to those expenses, which reportedly amounted to $258,000 from the Trump Foundation, may have violated “self-dealing” laws that prohibit nonprofit leaders from using charity money for self-benefit or the benefit of their for-profit businesses, according to The Post.
“I represent 700 nonprofits a year, and I’ve never encountered anything so brazen,” Jeffrey Tenenbaum, who advises charities at the Venable law firm in Washington, told The Post, later describing the details as “really shocking.”
“If he’s using other people’s money – run through his foundation – to satisfy his personal obligations, then that’s about as blatant an example of self-dealing [as] I’ve seen in a while,” he continued.
Trump could be found in violation of self-dealing rules from the Internal Revenue Service, The Post said, which could require him to pay penalties or reimburse the foundation’s money. He is also facing scrutiny from the New York attorney general’s office, The Post added, which could find him in violation of the state’s charity laws.
Democratic nominee Hillary Clinton’s campaign fired off a response to the Post story soon after it was published.
“Clearly the Trump Foundation is as much a charitable organization as Trump University is an institute of higher education,” Christina Reynolds, the campaign’s deputy communications director, said in a statement. “Trump’s version of charity is taking money from others to settle his own legal issues and buy at least two pictures of himself, which experts say is a clear violation of laws governing charitable organizations.”
“Once again, Trump has proven himself a fraud who believes the rules don’t apply to him,” she continued. “It’s past time for him to release his tax returns to show whether his tax issues extend to his own personal finances.”
Trump’s campaign did not respond to a request for comment from The Post.
Here are some of the other revelations from Fahrenthold:
Trump’s Mar-a-Lago club in Florida faced $120,000 in unpaid fines from the town of Palm Beach stemming from a dispute over the size of a flagpole. The tallest a flagpole could be in Palm Beach was 42 feet, but Trump insisted on an 80-foot pole, claiming that “you don’t need a permit to put up the American flag.” The town agreed to waive the fines if Trump’s club made a $100,000 donation to a specific veterans charity. But Trump instead sent a check from his foundation, Fahrenthold reported.
Trump’s New York golf courses agreed to settle a lawsuit by making a donation to the plaintiff’s chosen charity, but the $158,000 donation was instead made by the Trump Foundation, according to The Post. The lawsuit was filed after a man, Martin Greenberg, hit a hole-in-one on the 13th hole at Trump’s Westchester, New York, golf course during a charity tournament, briefly winning $1 million, which was taken away after it was revealed that the shot did not travel a required 150 yards. Trump’s course was accused of intentionally making the hole too short.
If Donald Trump’s claims that certain of his commercial ventures benefit charity are untrue, he could be held liable under Section 349 of New York’s General Business Law, which forbids deceptive business acts and practices, as well as under charitable solicitation laws, according to legal experts.
In promoting products as varied as Trump University, Trump Vodka, a Trump board game and his latest book, “Crippled America,” the businessman has declared that the proceeds would go to charity. None of Trump’s proceeds from Trump University have gone to charity, and only a few hundred dollars of charitable giving related to Trump Vodka has been accounted for. News organizations have been unable to verify his other claims, and his representatives have been unwilling to provide more information about them or even to confirm them.
While lawyers say Trump could be liable in a number of states for false claims, the official most likely to take up the matter would be Attorney General Eric Schneiderman of New York, where Trump resides and is already the defendant in a consumer fraud case brought by the state over Trump University.
Referring to Trump’s claims about his “Crippled America” book profits, a spokesman for Schneiderman’s office said that the law against deceptive business practices was a more likely avenue of pursuit than the charitable solicitation law. But he added that lawyers at the attorney general’s office had not yet decided whether to look into the matter.
In recent weeks, Trump has come under fire for exaggerating the amount of money he raised for veterans at a campaign event in January and for donating much of that money only after reporters began asking questions about it. A state AG investigation of Trump’s other claims of charitable giving would keep the issue alive and burden the presumptive Republican nominee — already embroiled in a number of lawsuits — with another legal headache.
At least one congressman from New York says Schneiderman should investigate Trump’s claims about “Crippled America.”
“To the extent jurisdiction exists, it seems appropriate that the attorney general should examine whether Trump’s fraudulent schemes extend to his book-promotion activity,” Democratic Rep. Hakeem Jeffries told POLITICO.
Neither Trump campaign spokeswoman Hope Hicks, nor Alan Garten, general counsel of the Trump Organization, responded to multiple requests for comment.
At an October campaign stop in Iowa, Trump plugged the upcoming release of the book, saying, “With everything else I’m writing books. This was the last thing. But it was a lot of money that’s going to go to charity, and frankly, I think the title is amazing.”
That same day, Trump’s director of social media, Dan Scavino, tweeted:
At a press conference tied to the book’s release at Trump Tower in New York last November, Trump said, “The profits of my book? I’m giving them away to a lot of different people, including the vets.”
So far, Trump has made somewhere from $1 million to $5 million in royalties on the book, according to a personal financial disclosure filed last month with the FEC, but Hicks did not respond to repeated questions about whether any of the proceeds went to charity and no donation has been publicized.
If Trump fails to follow through on the statements made by him and his employee, he could be running afoul of the law, according to James Fishman, an emeritus professor of law at Pace University with expertise in non-profit organizations. “In terms of promising to give money to charities, that can be looked at as fraud if he has gotten people to contribute on that basis,” Fishman said.
The charity claims made their way into numerous news reports, social media posts and online reader reviews of the book. “Thank You For Donating Proceeds To Vet Charities!!!” reads the subject line of one review on Amazon. “Proceeds to charity GREAT BOOK!” proclaims another.
A Facebook page set up to promote the book includes a post that reads, “’I just started reading this and it is a great book already and I’m glad you are donating the proceeds to charity!’ – Joe (Unsolicited Amazon Testimonial).”
A Trump fan Facebook group promoted a link for pre-ordering the book this way: “Trump has just went live with the ‘pre-orders’ of his brand new book, ‘Crippled America’!! Trumps campaign manager also confirmed that the proceeds for the book go directly to CHARITY! Support the cause, get educated, and help us MAKE AMERICA GREAT AGAIN! Secure your copy by pre-ordering today.”
“In general you can’t promote a book by saying the benefits will go to charity when that’s false, and that’s where general consumer protection laws would come in,” said Dan Kurtz, a former assistant attorney general of New York in charge of the state’s Charities Bureau.
Kurtz added that Trump might also be subject to New York’s charitable solicitation laws. Those regulations generally apply to instances where a business markets its goods as benefiting a particular charitable organization, but Kurtz said Trump’s vaguer marketing claims arguably also fall under that law as well.
Kurtz said that the book’s publisher, Simon & Schuster, might be “on the hook” as well for claims Trump made. A spokesman for the publisher declined to comment on the record.
“Crippled America” is not the only money-making venture that Trump has publicized as benefiting charity. He has also claimed that proceeds or profits from Trump University, Trump Vodka, “The Art of the Deal” and a Trump board game would benefit charity.
Promoting Trump Vodka in 2006, Trump told Larry King, “I’m giving the money to charity.” But the only apparent donation related to Trump Vodka is a “few hundred dollars” given to a group supporting Walter Reed Hospital in connection with a specific promotion, as reported by CNN last month.
Trump marketed Trump University as a charitable venture and said he would give any money he made off of it to charity, but he has not given money from it to charity, as Time reported in November. Trump’s lawyer told Time that the New York billionaire transferred the $5 million he made from Trump University, which is embroiled in multiple fraud lawsuits, back to the business when it landed in legal trouble.
Kurtz said that while older marketing claims of charitable giving, if false, might be too stale to pursue on their own, they would be relevant to more recent cases, like that of “Crippled America.”
“If somebody could demonstrate there’s a pattern, even if the claims themselves aren’t actionable, it shows the propensity to do it,” he said. “It reinforces the case.”
A federal judge in San Diego set the stage on Friday for what could be one of the strangest presidential transitions in history: He ordered that Donald Trump must go to trial starting Nov. 28 in a civil case in which he is accused of defrauding students who attended Trump University.
“No doubt this will be a challenge … we’re in unchartered waters,” said Daniel Petrocelli, Trump’s lead lawyer in the case, when asked later how his client — if elected in November — would be able to balance preparing to take over the presidency with taking the witness stand in a trial that could run almost until the eve of the following January’s inauguration.
But Petrocelli said Trump was fully prepared to testify and would even attend “most, if not all” of the trial in order to vindicate himself. “His preference would be to be here for the entirety of the trial,” Petrocelli said. “He believes this case is unwarranted and he wants to defend himself fully.”
The ruling today by U.S. Judge Gonzalo Curiel, during a pretrial conference on the six-year-old lawsuit, actually represented a small victory for Trump. The lawyers for the plaintiffs, arguing that “justice delayed is justice denied,” had asked for a trial to start as early as this summer — immediately after the Republican convention in Cleveland. “There are people who are still paying off their debts for the money they paid to Trump University,” said Jason Forge, a lead lawyer for the plaintiffs suing Trump.
Petrocelli, for his part, pushed back, contending that a trial over Trump University would end up becoming a media spectacle that would amount to an “unwarranted intrusion” on the November elections. He had asked that Curiel put the whole matter off until next February, after the inauguration, arguing that Trump, if elected, would be working “around the clock” during the transition to form a Cabinet. He acknowledged to Curiel that he was “fully aware” that a President Trump would not be able to postpone the case indefinitely, consistent with the Supreme Court’s unanimous ruling that President Bill Clinton was not immune to a civil suit by Paula Jones, alleging sexual harassment.
Curiel decided to split the difference: In an effort to “accommodate” Trump’s political campaign, he agreed to put the trial off until after the election — but scheduled it right afterward, rather than “waiting for [a] President Trump to begin his first term,” thereby “placing him a situation where, as a sitting president, he is taking up time as leader of the free world” to sit through trial. (Anticipating difficulty in finding unbiased jurors, the judge said he may want to start jury selection even earlier than Nov. 28.)
But Trump may still find his legal troubles impinging on his campaign; he is facing a separate trial in New York state courts in a civil fraud suit, also stemming from the ill-fated Trump University, brought by New York Attorney General Eric Schneiderman. (No trial date has been set on that case yet, but a spokesman for Schneiderman told Yahoo News that his office believes it could begin as early as this fall.)
The hearing today is the latest development in a case that has already erupted as a campaign issue and has threatened to shine a spotlight on Trump’s business practices — including his penchant for making hyperbolic claims to consumers — at the very moment he is trying to persuade voters he can deliver on his campaign pledges to end illegal immigration, destroy the Islamic State and balance the federal budget without touching entitlements like Social Security and Medicare.
The core case revolves around the operations of a school Trump launched in 2005 with a promotional YouTube video and ads that proclaimed, “I can turn anyone into a successful real estate investor, including you,” “Are you My Next Apprentice?” and “Learn from my handpicked experts how you can profit from the largest real estate liquidation in history.”
In fact, Trump University was never an accredited educational institution, and he was later forced by state attorneys general to change its name to the “Trump Entrepreneurial Initiative.” The plaintiffs, former students at Trump University, allege that Trump used “misleading, fraudulent and predatory practices,” conning them into maxing out their credit cards and in some cases paying more than $35,000 in fees for seminars and “mentoring” by Trump’s “handpicked” real estate experts. The lawsuit against the school, which is no longer in business, alleges that the seminars were little more than an “infomercial” and that the Trump mentors offered “no practical advice” and “mostly disappeared.”
One key issue in the case has been Trump’s boasts that the “courses” and “mentoring” would be conducted by the “best of the best” — real estate experts he personally chose. During a deposition last December, Forge hammered away at Trump on the issue, showing the businessman a photo lineup and playing videos of some of the instructors and asking him if he could identify any of them. Trump could not, at first saying it was “too many years” ago for him to recognize them and then finally admitting he didn’t actually know any of them. “I looked at résumés and things, but I didn’t pick the speakers,” Trump said at one point.
Trump’s lawyers have adamantly denied the charges and insisted that most students who took the courses were satisfied. On the campaign trial, Trump has vowed to never settle the case, claiming it was brought by a “sleazebag law firm” — a reference to Forge’s firm, Robbins Geller — and confidently predicted, “I will win the case at the end.” He has even criticized Judge Curiel, claiming he was biased against him because of his Hispanic origin. “If I didn’t have a hostile judge in California, this case would have ended years ago,” he said during a campaign rally in Arkansas last Feb. 26. (Trump had even suggested he might move for Curiel’s recusal, based on his Hispanic origin, but Petrocelli told reporters today he had no plans to file such a motion.)
The case has already eaten up Trump’s time on the campaign trail, forcing him to sit for two contentious last December and January in which he was grilled by Forge, prompting him to complaint at one point about “harassment” by the lawyer and to shoot back at another point, “Let’s just go to court and get this case — I’m dying to go to court in this case.”
What will be interesting to note is how right-wing media will cover Donald Trump on trial for fraud compared to the Hillary Clinton email investigation. No need to imagine, here is the Wall Street Journal saying Donald is being set up while Hillary is a criminal.
They hoped to get rich off real estate, and who would be a better mentor than one of the richest men in the world? So they enrolled in Donald Trump’s university to learn the tricks of the trade, some of them maxing out their credit cards to pay tens of thousands of dollars for insider knowledge they believed could make them wealthy.
With Trump rising in the polls as the front-runner for the GOP presidential nomination, his brief foray into education is an episode — and a business failure — that remains far more obscure than other chapters of the celebrity billionaire’s career.
Never licensed as a school, Trump University was in reality a series of real estate workshops in hotel ballrooms around the country, not unlike many other for-profit self-help or motivational seminars. Though short-lived, it remains a thorn in Trump’s side nearly five years after its operations ceased: In three pending lawsuits, including one in which the New York attorney general is seeking $40 million in restitution, former students allege that the enterprise bilked them out of their money with misleading advertisements.
Instead of a fast route to easy money, these Trump University students say they found generic seminars led by salesmen who pressured them to invest more cash in additional courses. The students say they didn’t learn Trump’s secrets and never received the one-on-one guidance they expected.
It’s a chapter of Trump’s past that shows how he sometimes defies the usual laws of campaign physics. Such allegations of multimillion-dollar fraud might sink other candidates, but in Trump’s case, even some of the students who felt duped said they haven’t given up on him: They like Trump. They admire him. They might even vote for him.
“He says what he means, not like politicians, not like Obama,” said Louie Liu of Hurst, Tex. Liu, a motel owner, said in a sworn affidavit that he paid $1,495 for a three-day seminar, then felt lured into paying $24,995 for more classes, an online training program and a three-day in-person mentorship. A few days later, he called to ask for a refund, but his request was rejected. Trump University, he concluded, was a “scam.”
Trump’s attorneys vigorously deny the charges. Alan Garten, general counsel for the Trump Organization, said the company offered aspiring real estate investors a quality education and that all but a handful of students were pleased with it.
It is unbelievable, Garten said, that anyone could have thought that Trump University was a university in the traditional sense. Classes were held in hotel ballrooms, after all. “People who say, ‘I thought it was a university with a football team and a bookstore,’ it’s laughable,” he said.
Trump University was born in 2004, when two businessmen proposed to offer distance-learning courses in entrepreneurship under the Trump brand. Trump gave his blessing, according to court documents, becoming a 93 percent owner of the new enterprise.
By 2007, the business had evolved to focus on live real estate seminars. But Trump University was not a university in any legal sense, and beginning in 2005, New York State Education Department officials told the company to change its name because they deemed it misleading. The business became the Trump Entrepreneur Initiative in May 2010, and it stopped operating shortly thereafter.
New York Attorney General Eric Schneiderman (D) filed his $40 million suit against Trump and Trump University in 2013, alleging that Trump had illegally operated an unlicensed university and defrauded students. Approximately 80,000 people attended Trump University’s free introductory seminars, according to court documents. About 9,200 of them went on to pay $1,495 for three-day seminars, and nearly 800 paid up to $35,000 for packages that included mentorships and workshops.
“No one, no matter how rich or popular they are, has a right to scam hard working New Yorkers,” Schneiderman said in a news release at the time.
Trump attacked Schneiderman, calling him a “political hack” whose lawsuit was a publicity grab and a shakedown for campaign contributions. “We have a school that’s a terrific school. It did a fantastic job,” Trump told ABC’s “Good Morning America” in 2013.
Trump’s campaign referred questions to Garten, Trump’s lawyer, who said the allegations are baseless and expressed confidence that Trump will prevail.
“We’re completely winning this case,” Garten said.
Matt Mittenthal, a spokesman for Schneiderman, said the attorney general could not comment on the pending suit. “We will continue to pursue our claims against Mr. Trump in court on behalf of the people he defrauded,” Mittenthal said.
The judge in the New York case ruled last year that Trump is personally liable for illegally operating a university without a proper license. But the judge also ruled that the statute of limitations prevents Schneiderman from seeking restitution for most of Trump University’s students, a decision Schneiderman is appealing. Whether the university defrauded students and how much Trump might owe in damages are yet to be decided.
Trump University introduced itself to potential customers with advertisements on radio and television, and in newspapers. The ads promoted a free, two-hour real estate seminar and a chance to learn Trump’s strategies from his “handpicked instructors.”
“He’s earned more in a day than most people do in a lifetime,” reads a 2009 ad featuring Trump’s photograph. “He’s living a life many men and women only dream about. And now he’s ready to share — with Americans like you — the Trump process for investing in today’s once-in-a-lifetime real estate market.”
The ad goes on to quote Trump: “I can turn anyone into a successful real estate investor, including you.”
The soundtrack for the free seminars was “For the Love of Money,” the theme song for “The Apprentice,” Trump’s reality television show. Instructors allegedly told inspirational stories of their own business successes and then encouraged students to pay $1,495 for a three-day workshop.
Students said they were swept along by the promise that they were getting the best real estate education money could buy, according to interviews and several dozen complaints and sworn affidavits filed with the court. But they claimed that the seminars were another sales pitch: To learn how to make it in real estate, they needed additional workshops and mentoring at a cost of up to $35,000.
Was Trump University a scam? We take a look at the available evidence.
Did Trump University sell itself off as an educational institution?
Yes. Trump himself marketed Trump University as a premier institution of higher learning rivaling Wharton Business School. Trump University had advertisements touting their function as a higher educational entity.
They had course books (that you can still purchase on Amazon) with their course numbers.
Was Trump University a licensed school?
No. A New York judge found Donald Trump was running an unlicensed school and was liable. The New York Department of Education demanded that the name Trump University be changed since it was misleading and in violation of the state’s education laws.
Were the professors the best brains in the industry and hand picked by Donald Trump as he promised?
No. They were hired motivational speakers with limited-to-none real estate background and not picked by Trump. In a deposition in the Cohen case last December, Trump suggested under oath that he was not very involved in hiring instructors, despite the program’s promotional materials suggesting otherwise and his lawyers asserting he was “very involved.” Rather, Trump said, “I would see résumés. … I told [Trump University’s president] I want very good people.” He also said he did not personally select instructors for 2009 live seminars
Did Trump University have a A+ rating from the Better Business Bureau, as Trump claims in his defense.
Yes, Trump University had an ‘A+’ rating from the Better Business Bureau… only after all of the bad reviews and complaints were removed. The policy of the Better Business Bureau is to remove all claims for a company after 3 years. When Trump University was active it had a rating of ‘D-‘. Donald Trump’s defense of an ‘A+’ rating is a clear deception.
Conclusion
Our conclusion based on all of the available evidence is that Trump University is a textbook example of a bait-and-switch scam.
While Trump has bashed the H-1B visa program in multiple debates and makes lowering the number of H-1B visas a top policy decision for his immigration reform.
Increase prevailing wage for H-1Bs. We graduate two times more Americans with STEM degrees each year than find STEM jobs, yet as much as two-thirds of entry-level hiring for IT jobs is accomplished through the H-1B program. More than half of H-1B visas are issued for the program’s lowest allowable wage level, and more than eighty percent for its bottom two. Raising the prevailing wage paid to H-1Bs will force companies to give these coveted entry-level jobs to the existing domestic pool of unemployed native and immigrant workers in the U.S., instead of flying in cheaper workers from overseas. This will improve the number of black, Hispanic and female workers in Silicon Valley who have been passed over in favor of the H-1B program. Mark Zuckerberg’s personal Senator, Marco Rubio, has a bill to triple H-1Bs that would decimate women and minorities.
Requirement to hire American workers first. Too many visas, like the H-1B, have no such requirement. In the year 2015, with 92 million Americans outside the workforce and incomes collapsing, we need companies to hire from the domestic pool of unemployed. Petitions for workers should be mailed to the unemployment office, not USCIS.
Ut-Oh!
Not only was Donald Trump extensively using the H-1B visa program for his own companies, he tried to import at least 1,100 foreign workers, and he has been accused of fraud and treating models at his model agency “like a slave.”
