Most of the press was preoccupied last week with a New York theater audience’s spontaneous decision to tell Vice President-elect Mike Pence what it thought of his record as a crusader against women’s reproductive and LGBT rights. But the real news about the incoming administration was being made in court.
That’s where lawyers for President-elect Donald Trump reached a $25-million settlement of three lawsuits over Trump University. Trump depicted the settlement on Twitter as a victory.
"I settled the Trump University lawsuit for a small fraction of the potential award because as President I have to focus on our country," he wrote Saturday morning.
New York Atty. Gen. Eric Schneiderman, who brought one of the lawsuits, would disagree that the settlement is “a small fraction of the potential award.” New York estimated that Trump University defrauded thousands of customers of an estimated total $40 million, and that Trump may personally have pocketed $5 million in profit. So the settlement comes to 62.5% of the total collected in the alleged scam and five times Trump’s own alleged take. Nuisance lawsuits typically are settled for small potatoes, but a settlement of nearly two-thirds of the claim doesn’t fit into that category. It’s a sign that Trump faced genuine liability in these cases.
Schneiderman, in a statement announcing the deal, called it a “stunning reversal” by Trump, who had “fought us every step of the way, filing baseless charges and fruitless appeals and refusing to settle for even modest amounts of compensation for the victims of his phony university.” Phony is right; one pillar of Schneiderman’s lawsuit was that Trump had not even bothered to get his “university” licensed by New York state as a bona fide educational institution. “More than 5,000 people across the country who paid Donald Trump $40 million to teach them his hard sell tactics got a hard lesson in bait-and-switch,” Schneiderman said when he filed his lawsuit in August 2013.
It is true, as Trump asserts, that the settlement was designed to put the Trump University case behind him. The settlement doesn’t include an admission of guilt. But the evidence assembled by Schneiderman and plaintiffs who brought two class-action lawsuits in California federal court painted a compelling picture.
Before it all vanishes into our collective memory hole, we should take note of how the Trump University affair reflects on how Trump conducted his presidential campaign and what it tells us about whether to believe anything he says going forward.
It’s also proper to note, as does legal scholar Christopher Peterson of the University of Utah, that a finding against Trump on fraud or racketeering charges at trial might very well expose him to the risk of impeachment.
Trump University, it will be recalled, was pitched to the unwary as an opportunity to learn “the Trump process for investing in today’s once-in-a-lifetime real estate market” from a cadre of Trump’s “hand-picked” instructors. Schneiderman alleged that this was false. Of the instructors, “not a single one was ‘handpicked’ by Donald Trump.” Some had little real-estate experience at all, and some actually had gone bankrupt in the business.
What they had been trained to do was “sell, sell, sell,” according to a Trump University “playbook” made public via court proceedings. What they were selling was an array of increasingly expensive generic seminars — topping out at $35,000 — developed not by Trump but by a company specializing in “motivational speakers and seminars and timeshare rental companies.”
The playbook was heavily devoted to marketing the program, not teaching the particulars of the Trump Way. Employees were instructed in hard-sell methods and equipped with pre-masticated rebuttals of their potential customers’ objections. Let one say, “I need to think about it,” and the answer would be, “You’ve already been thinking about this too long… It’s time to commit to yourself and learn the TRUMP way to invest.”
A former sales manager testified that he was reprimanded for advising a prospect couple against signing up for the $35,000 “elite” program, because they would have to use the husband’s disability income and drain equity in their apartment. Another salesman completed the sale instead.
Trump himself testified that he reviewed all the marketing materials — indeed, that was the basis of a ruling in August by San Diego Federal Judge Gonzalo Curiel rejecting Trump’s motion for summary judgment against the class-action plaintiffs. There was enough evidence that Trump personally “participated in the operation or management of the enterprise,” Curiel ruled, to bring a racketeering charge against him before a jury.
As a candidate, Trump made Curiel, an Indiana-born jurist of Mexican descent, into a punching bag for his anti-immigrant campaign plank, claiming the judge had been unfair to him even though Curiel had been sedulously fair. As the Nov. 28 trial date for one of the lawsuits drew near, his lawyers asked the judge to exclude all of his intemperate comments about the case and the judge from the trial, on grounds that they were merely irrelevant campaign persiflage. He also pledged not to settle.
Much more was at stake in the Trump University lawsuits than inconvenience. Utah’s Peterson observes that offenses as serious as fraud and racketeering, even if committed before a president’s assumption of office and aired in civil, not criminal, court, might qualify among the “high crimes and misdemeanors” for which the Constitution reserves impeachment.
“The most plain reading of the phrase,” he concludes, “is simply that impeachable behavior ‘is only that which would subject an ordinary person to criminal indictment and prosecution.’” But there’s no “clear legal hurdle” that would bar impeachment of Trump “simply because the… cases arose in civil court.”
So this was no trivial threat, and the settlement not an effort merely to dodge a nuisance. The Trump University cases cast a major shadow over his presidency. Now that they’re settled, however, there’s no reason to forget them. They’ve already told us much about Trump that we should remember, every time he makes us another promise.