Real estate might not be Donald Trump’s strong suit in the Texas primary: Six years ago, the state's Republican attorney general forced his Trump University to pack up and leave.
Trump’s embattled property seminar program made an embarrassing retreat when then-Attorney General Greg Abbott, now the state's governor, began investigating it for possible “deceptive trade practices.”
That’s a challenge as Trump now hopes to win the Lone Star State’s Super Tuesday Republican primary.
State polls show Trump and Texas’ junior U.S. senator, Ted Cruz, battling for an edge in the March 1 vote. Real Clear Politics’ average of polls shows Cruz with 34 percent of the vote to Trump’s 27 percent.
Abbott this week endorsed Cruz.
Conservative writer Paul Nagy recently went so far as to suggest that Trump — who donated $35,000 to Abbott’s 2014 gubernatorial campaign — choose Abbott as his running mate.
“Trump-Abbott, that’s a ticket to make America great again and put the fear of God in America’s enemies, foreign and domestic!” Nagy wrote in a blog post for The Hill, a Washington, D.C.-based political news outlet.
But observers familiar with Abbott’s 2010 confrontation over Trump University might find such an alliance unlikely -- especially because Abbott this week endorsed Cruz.
The “university,” which actually was a real-estate training package that awarded no accredited degrees, is now defunct. There are currently three active lawsuits against Trump and Trump University: one by the New York attorney general’s office and two related California class actions.
The plaintiffs allege Trump and Trump University defrauded thousands of people throughout the country by selling real-estate training packages, ranging from $1,495 workshops to a "Gold Elite" program that cost up to $34,995, and came with “mentoring” — pledges of personal coaching on real-estate deals from Trump University instructors.
But the first major shot at Trump University came from Texas in January 2010. That’s when Abbott’s assistant attorney general in the Consumer Protection and Public Health Division, Rick Berlin, began a probe of whether the operation violated Texas’ Deceptive Trade Practices Consumer Protection Act.
In a “civil investigative demand” mailed to university corporate offices at Trump’s 40 Wall Street address, Abbott’s office sought financial records; promotional and advertising material, such as that used to promote Trump University seminars in Texas; talking points and sales scripts used by seminar leaders to encourage people to purchase the paid programs; and names of all Texans who “purchased your workshop or mentoring program” from January 2008 to the present.
Rather than respond and turn over the requested documents, Trump University agreed to cease doing business in Texas.
Later that year, Trump University stopped operations altogether.
Abbott’s media staff declined several requests from American Media Institute to comment on the Trump University controversy, or on whether Trump’s involvement in the real-estate school raised issues, for Abbott, about Trump’s integrity.
The decision by then-Attorney General Abbott’s office to investigate Trump University followed a referral by the Better Business Bureau.
In 2008 and 2009, Texas-based BBB offices received some 30 complaints against the program, the severity and number of which prompted Abbott’s office to take action.
Two of those complaints are included in court records of the legal cases against Trump and Trump University.
“Trump University and their staff should be ashamed of themselves! They RUINED my credit!!!” wrote Krassin Andreev of Pearland. “They told me I would get my large investment back in my first real estate deal because I would have access to amazing mentors and course content.
“I thought Donald Trump wouldn’t have such a sorry excuse for a school just to make more money. The only help for maxing my cards was that I could pay their fee,” wrote Andreev, who had paid $16,000 to Trump University.
Evidence produced in the lawsuits shows that people who purchased the $1,495 workshops were asked to provide detailed financial information, including bank balances, and in many cases advised to increase their credit card limits.
The purported reason for requesting this information was to help the instructors determine the amounts the students could afford to invest in real estate.
According to the lawsuits, the real purpose of getting the students’ financial information was to determine how much enrollees could afford to pay for the next level — say, $10,000, $20,000, or all the way up to the maximum, $34,995.
Attempts to reach Andreev were unsuccessful. Another Texan who filed a complaint was contacted and asked that his name not be used. In his complaint, the man, from Keller, complained, as did Andreev, that after he paid Trump University, the real-estate “mentoring” services included in the package proved non-existent.
“Is there any wonder I have lost confidence in Trump University?” he wrote. “Instructor resigns in mid-course, a vice president resigns and nobody follows up with e-mails to his address; a woman who answers the phone at Trump U snickers at me.”
Trump University attracted customers — not just throughout the country, but also in Canada and Puerto Rico — with promotions and advertisements for free seminars. At these, the materials suggested, Trump’s very own get-rich techniques would be taught.
Texas was a hot spot for Trump University, with numerous events in Houston, Dallas, San Antonio and surrounding areas.
“The time to invest in Texas real estate is NOW!” proclaimed an ad promoting three Trump University seminars in San Antonio in October 2009.
The ad showed a smiling Trump, under which was the pledge that attendees would “learn from Donald Trump’s hand-picked experts.”
Another, promoting September 2009 events in Houston and Sugar Land, contained what reads as a personally written, signed letter by Trump. It includes the statement:
“Come to my free class. In just 90 minutes, my hand-picked instructors will share my techniques, which took my entire career to develop. Then, just copy exactly what I’ve done and get rich.”
Trump subsequently admitted, in a September 2012 deposition, that he had no role in choosing instructors or designing the curriculum. He was unable to answer basic questions about the program’s curriculum.
The main purpose of the seminars was to sell the $1,495 workshops. And a key purpose of the workshops was to make the big sell — for the Gold Elite program.
The big draw for the expensive follow-up programs was the “mentoring,” which, according to the complaints, frequently failed to materialize.
Trump spokeswoman Hope Hicks said that, because the subject remains an active legal matter, questions about Trump University should be addressed to Trump Organization counsel Alan Garten.
Garten did not answer questions e-mailed to him or prior e-mails forwarded to him from Hicks.
The January 2010 civil investigative demand letter from Abbott’s office included a request for all documents related to Trump University’s instructor/salesman Steve Goff.
Goff, a self-described real-estate expert and motivational speaker, was particularly active in Trump University’s Texas operations.
On his LinkedIn page, the Houston-based Goff claims that he worked in “the Trump Building at 40 Wall Street in NYC as the only Real Estate Coach to Donald's Clients and Students.”
According to Goff, in his job as “real estate coach and mentor,” he conducted more than 1,000 free seminars and more than 300 workshops in “every major U.S. city for Trump.”
One of the named plaintiffs in the California class action is Ed Oberkrom, a 65-year old Missouri man.
According to court records, Oberkrom contends that he agreed to pay $25,000 to Trump University after already paying $1,500 for a workshop. Oberkrom claims that he purchased the Elite program largely because Goff told him he had family in the St. Louis area and would be there frequently to “mentor” Goff and help him with real-estate deals.
This “mentoring” pledge failed to materialize. When Oberkrom requested a refund, Trump University refused.
In an e-mail, Goff disputed this account. “I did not serve as Ed’s mentor,” he wrote.
According to his LinkedIn profile, in 2009, Goff won the Trump University “top sales award” four years in a row.
In 2007 — in the middle of his tenure with Trump’s company — Goff filed for bankruptcy. He cited at least $759,000 in debts against less than $20,000 in assets.
Goff, in his e-mail, said that his bankruptcy had “nothing to do with Real Estate,” implying that it was unfair to cite his bankruptcy when discussing his qualifications to teach real estate.
Goff’s bankruptcy lists his profession as real-estate consultant. It shows that a substantial portion of his debt involved his personal obligations on real-estate mortgages.