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The art of the con


con game

This two-year-old piece from the Atlantic reveals how “Trump University” was an outright bait and switch scam:

Amid the thousands of pages generated by Trump University lawsuits, one document offers a particularly revealing look into the inner workings of Trump’s would-be educational empire: a 41-page “Private & Confidential” playbook printed on Trump University letterhead.

Here are the basics: In cities such as New York, San Francisco, and Dallas, Trump University promoted free seminars as a chance to follow in Trump’s very own footsteps. One ad had Trump proclaiming, “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.”

Guess what happens next:

The playbook, prepared for Trump University seminars in Texas in 2009, might be summed up in one word: sell. Or as the playbook puts it on page 23, “Sell, Sell, Sell!” The playbook posits a “Minimum Sales Goal” of $72,500 per seminar, meaning that the seminars leaders needed to convince at least 20 percent of attendees to sign up for three-day seminars costing $1,495.

Under the heading “Registration Goal & Procedure,” Trump U. staffers are instructed to “Welcome attendees and build a Trump-esque atmosphere,” “Disarm any uncertainty,” and “Set the hook.” The hook in this case consists of selling seminar attendees on increasingly costly additional courses, culminating in the “Trump Gold Elite” package, for a cool $34,995. Pricey, yes, but the playbook notes that the list price of the Trump Gold Elite package is $49,415, a savings to students of 29 percent. Even before Trump University students had made their first real-estate transaction, they had managed to get themselves a deal, of sorts.

The playbook also features instructions on setting the room temperature and the mood music (“For the Love of Money” by the O’Jays; no courses in irony were available apparently) in the hotel conference rooms where “Trump University” had its evanescent existence.

Once seminar attendees were comfortably (but not too comfortably) seated in the no-hotter-than-68-degree meeting room, the lights dimmed and an introductory video featuring Donald Trump began. The video marked the closest any Trump University student would get to Donald Trump. None of the school’s courses, not even those in the pricey Trump Gold Elite level, featured an appearance by the flesh-and-blood Donald Trump.

That didn’t stop Trump University instructors from hinting that Trump might drop by one of the school’s seminars. According to New York State’s lawsuit, Trump U. classes often began with the promise that Trump “is going to be in town,” “often drops by,” or “might show up.” However, Trump never materialized. As consolation, attendees sometimes were offered the opportunity to have their photo taken next to a life-size cardboard cutout of Donald Trump.

At the conclusion of the Trump introductory video, a guest speaker took to the podium and launched into his real-estate presentation. Trump University advertised that its instructors were “hand-picked” by Trump himself, but the state of New York’s complaint asserts that Trump had no role in selecting teachers. “Many instructors came to Trump University from jobs having little to do with real estate investments,” the complaint reads, “and some came to Trump University shortly after their real estate investing caused them to go into bankruptcy.”

The playbook says almost nothing about the guest speaker presentations, the ostensible reason why people showed up to the seminar in the first place. Instead, the playbook focuses on the seminars’ real purpose: to browbeat attendees into purchasing expensive Trump University course packages.

Trump’s “people” who set up this classic ripoff were well aware that he and they were at best walking the often ragged line between the legal scamming of the naive and desperate and civil and criminal fraud:

Every university has admission standards and Trump University was no exception. The playbook spells out the one essential qualification in caps: “ALL PAYMENTS MUST BE RECEIVED IN FULL.” Basically, anyone with a valid credit card was “admitted” to Trump University. . .

Even though Trump University is facing two multi-million dollar fraud lawsuits, Donald Trump continues to defend his educational efforts, calling Trump University “a terrific school that did a fantastic job.” But if Trump had read his school’s own playbook, he might have foreseen the likely outcome of running a university with comically lax standards. At one point, the playbook advises Trump staffers: “If a district attorney arrives on the scene, contact the appropriate media spokesperson immediately.”

A few notes:

(1) The only moral or practical difference between Trump University and a fraud factory such as Corinthian Colleges (which Marco Rubio tried his best to protect two years ago) is the difference between a shorter and a longer con.

(2) The evidence that Trump is actually good at making money, as opposed to self-promotion, is scant. The nature of contemporary capitalism is such that, for a person who starts out with an enormous fortune, making that fortune many times larger over the course of an investment “career” is about as difficult as falling off a log. Trump could have increased his wealth twenty times over in nominal terms, and five-fold in constant dollars, since the mid-1970s simply by passive investment in market-tracking equities funds. Has he done better than that? I doubt it: for one thing if he had, he would have put the evidence up in neon already.

I also doubt that “Trump University” was primarily about making money, as opposed to stroking this despicable man’s insatiable ego. Trump inherited something in the nine figures and basically couldn’t avoid turning that into ten figures without trying to. The money he made off this particular scam was surely trivial in that context. It was an exercise in narcissism, which of course is exactly what his presidential campaign is about.

(3) All of which is to say that the key to understanding Trump is to see him as a classic American type: the con artist who lives to “score” by ripping people off. The money side is almost incidental: again, Trump isn’t stupid, and despite his immense ego he must realize he could have made just as much or more money in more socially respectable ways. But then everybody wouldn’t know his name.

(4) Helmut Norpoth sounds like a made-up name, plus from the story it also seems as if his “predictive” model was actually invented a few months ago and retro-fitted onto previous outcomes (how that counts as “prediction” is probably a question you can get answered at Trump University), but this guy is a political scientist, so there’s a 3.34% chance this might be meaningful.

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  • Nobdy

    Was Trump university actually ‘driven’ by Donald Trump? I always assumed that it was a pre-existing product that sought him out as a celebrity endorser, the same way the George Foreman grill used George Foreman to get a product into the public eye (with the obvious difference that the George Foreman grill is not a scam.)

    Donald Trump is in the licensing business. He puts his name on buildings, golf courses, ties, vodka, whatever. Why not a scammy investment course? But I think you overthink things when you say that this was about ego or the thrill of the con.

    I think some people came to him with a large check, he posed for some photos, read a script for a video, and went back to filming The Apprentice or hawking menswear.

    • jim, some guy in iowa

      oh, it’s about ego all right- it always is with Trump- the best thing that can be said about him in this case is that he was sloppy about what he was willing to slap his name onto

    • CrunchyFrog

      Or the way Madden got his name attached to a video game.

      Speaking of, I recently read one of the brilliant writers on SI or NFL.com list Madden as one of the all time great coaches and gave, as one point in his favor, that he created such a great video game. Somehow, I continue to be shocked at such rank stupidity.

      • efgoldman

        he created such a great video game.

        I’m pretty sure he knows the difference between one and zero.

  • Jake the antisoshul soshulist

    Come back tomorrow and I will take you again.

    Maybe Trump’s campaign is a purloined letter with the con hidden in plain sight.

    Has Ben Carson shut down his shell game yet? Since he came out with his “I’m shocked that there is gambling in this casino” line, I suspect he thinks the con has run its course.

    • efgoldman

      I suspect he thinks the con has run its course.

      He’s still selling books, but he doesn’t have to split that money with his “financial professionals.”

  • Malaclypse

    I can’t add anything to this.

  • N__B

    Wait…you’re saying that running a university like a business is a bad thing?

  • Barry Freed

    …a fraud factory such as Corinthian Colleges

    To be fair Corinth was never known for its educational institutions.

  • AMK

    The difference between Donald Trump and Marco Rubio Ted Cruz Mitt Romney the modern GOP is “the difference between a shorter and a longer con.”

  • Vance Maverick

    I’m sure nobody discussed irony in the context of the song. But would it have mattered? Taking it as given that a commercial recording is, so to speak, essentially a straightforwardly ironic anti-endorsement of the lust for money, how does that constrain the instructors or students here? I think those people are quite capable of understanding that “greed is good” was not Oliver Stone’s message, and at the same time smirkingly embracing it.

    • Vance Maverick

      Paul’s throwaway comment seems to imply a position that’s a kind of aesthetic Reinheitsgebot — only perfectly sincere art can be misappropriated.

    • Yeah, at the same time, I can wish Stone had a better response to “greed is good” than “I guess you have a pretty good argument, but yuck.”

      edit that was unclear, but it’s almost hard to fault people who fail to see irony that’s so, well, basic is I guess the word the kids would use to describe it. Stone is pretty close to the edge there.

  • malraux

    Well at least when Trump releases his tax returns we should be able to get a handle on his actual income, net worth, and investment acumen…

    • jeer9


      David Cay Johnston’s recent article “21 Questions For Trump” means there’s a whole lot of hilarity left in this campaign.

      Why the Republican Establishment didn’t avail itself of this information remains an interesting sidebar and may speak to not only its moral, but functional, bankruptcy – which is perfectly represented by The Donald’s candidacy. When your last administration was essentially a criminal enterprise, splitting hairs doesn’t seem a terribly meaningful and advantageous exercise as a business model.

      Jealousy, on the other hand, …

      • fearandloathing

        I think the only answer that makes any sense is that the GOP has so enthusiastically bought into the notion that anything that makes money is unquestionably good (unless you are an abortion provider or sell birth control pills) that the establishment concluded that screaming “This man is a scam artist who’s bilked people for millions” would only send legions more of brain dead Republicans running in his direction. He’s a success!! He’s made millions!! How, doesn’t matter.

        These folks have so completely lost their sanity to greed that it’s never occurred to them that we can’t all get rich ripping people off. Somebody actually has to create wealth for the bloodsuckers to steal.

    • CrunchyFrog

      I assume this was meant sarcastically. If pressed, what he’ll release is an accountant’s summary. The same thing that Romney did, or that Palin did just before the election regarding the fictional account of the birth of her last child. (I don’t know what happened there, but the official story was literally impossible.)

      • malraux

        yes, it was meant in jest.

        IIRC, what romney did was only release the most recent tax return rather than many years previously. The likely guess was that romney was hiding some foreign investment issues or hiding his income from the church.

        But Trump has the problem that he wants to keep his net worth hidden, thus the frequent arguments with forbes about what his real net worth is. Showing his tax returns would give a huge amount of info about his finances that trump egotistically does not want out.

        • cpinva

          I have contended for years that trump’s real net worth is either zero, or damn close to it. sure, he has his name on a lot of stuff, but he either doesn’t actually own it, or it is so drowning in related debt, if he netted a bottle of trump vodka on the sale, he’d show a profit.

  • wbianco

    Hey Paul – back off on the snark regarding Helmut Norpoth. Yes, his prediction is based on is a multivariate statistical model that doesn’t get into candidate or campaign specifics. But the fact is, it’s a damn good predictor when applied to past cases. And just to be clear, how could we test such a model except to apply it to past cases?

    More than that, Norpoth is a name guy in his area, which you could verify in a second with a search on google scholar. He doesn’t deserve to be dismissed with a clever remark about his name (he’s a German native, by the way).

    Maybe some more coffee before posting?

    • Warren Terra

      But the fact is, it’s a damn good predictor when applied to past cases. And just to be clear, how could we test such a model except to apply it to past cases?

      Well, just to state the obvious, a model could be developed based on a limited set of past cases, and then tested on other past cases not used in its creation. That wouldn’t be perfect – and might not be feasible – but if you construct a model by refining it until it matches past performance, it would be downright shocking if it failed to accurately “predict” past performance based on the same data used in its construction.

      • Paul Campos

        Right. This seems like a textbook example of overfitting — just keep refining the variables until the “predictions” of past events are almost perfect.


        “Trump beats Hillary 54.7 percent to 45.3 percent [of the popular vote]. This is almost too much to believe.” Norpoth said, with a few members of the audience laughing nervously. “The probability of that [outcome] is almost complete certainty, 97 percent. It’s almost ‘Take it to the bank.’ ”

        There’s no “almost” about it — that is a completely absurd prediction, if Norpoth is actually treating it as a prediction (which is a bit unclear to me from the article).

        • ForkyMcSpoon

          Let’s guess how many models are out there that show the Democrats favored to win based on the fundamentals that ALSO predict all the previous elections correctly.

          Meanwhile, this guy is using primary performance as a main input? The modern primary system has only been used for 11 elections. Of those, only five have been elections where the incumbent party was coming off 8+ years of holding the presidency.

          And you can’t ignore the fact that one of those elections followed a scandal that took down the president and another was won in the Supreme Court, not the popular vote. Taking that last point into account, of the 15 elections since 1912 with a 8+ year incumbent party, the incumbent party won 7 of them in the popular vote.

          In other words, I agree.

          • JMV Pyro

            I looked up the model and found this . Apparently turnout in the New Hampshire primary is a key part of the model.

            Knowing that, New Hampshire’s demographics, and the fact that the model predicted a squeaker election for 2008, I think the model is dramatically under sampling minority voters to get that result.

            • cpinva

              “I think the model is dramatically under sampling minority voters to get that result.”

              since NH only has about 5 minority voters, is it even possible to “under sample” them, short of just not including any at all in your sample?

              • efgoldman

                since NH only has about 5 minority voters

                Exaggeration is not useful There are at least 17, depending on when the youngest turned 21, and if the oldest is still alive.

    • brewmn

      “But the fact is, it’s a damn good predictor when applied to past cases.”

      “My model is unassailable. It picked every outcome correctly after it occurred.”

      “Wow. That’s brilliant. Wait a minute…what?”

      And, even if you think this guy’s methods are generally valid, a “97% chance of defeating Clinton and and a 99% chance of beating Sanders” in the general? No fucking way. I’m not gonna say Trump has no chance of beating either of them, but a 97+% chance of winning, based on current polling?

      Absolutely batshit ridiculous. And you don’t need a Ph.D in Statistics to see that.

      • brewmn

        Paul beat me to it.

  • Dr. Ronnie James, DO

    1) the thing that could pierce the Trump bubble is for his victims to come forward: minority tenants he pushed out, American workers who couldn’t get jobs at his resorts because he was busy getting H2B visas and importing Romanian workers, the victims of Trump U. Maybe this stuff is being saved for the general; I hope so.

    2) Sadly, as an idealistic young person, I was suckered into a very similar-sounding event (though I did not pay anyone $,000 for it): billed as an exciting new project, where I could get it on the ground floor, orchestrated by a Big Name* (! The real draw), who was just then revolutionizing American politics, whom they promised would be there In Person to give one of his electrifying speeches about how we could get involved.

    The event itself turned out to be a 3-4 hours in a conference room, listening to rambling, mind numbing speeches about regulation of the insurance industry by a series of po-faced functionaries all praising the Big Name*, who finally popped in and spoke for 2 minutes at most.

    * Ralph Nader (ca. ’97)

    • Lee Rudolph

      * Ralph Nader (ca. ’97)

      How did I see that coming???

    • Scott Lemieux

      Among people who have been involved with a Ralph Nader organization, this will surprise none of them.

  • keta

    As ever, it’s not the con man/woman who proves most interesting, but rather why rubes fall for him/her. There’s been tricksters since forever, but without marks forming a credulous mass they don’t hardly register on any scale at all.

    • Davis

      People believe nonsense because they want to believe, and there are a lot of them. Conning people is not that hard if you have no conscience.

    • osceola

      The people who fall for this stuff think they’re NOT rubes. On Charlie Rose this week there was an author (last name Konnikova, didn’t get her first name) with a new book out about con men. She said they told her the ideal marks are the types who think they’re too smart to fall for a scam.

      People who look to Donald Trump for investment advice definitely fit the “think they’re too smart” category of dumbass.

      • Davis

        “You can’t cheat an honest man.” – W.C. Fields (“Or smarten up a chump.”)

      • Tsotate

        This is my theory on why Carson might not have been in on his campaign’s scam. Surgeons are perfect “think they’re too smart” rubes for any con or grift.

  • Merkwürdigliebe

    Trump actually did about as well as the market with his money, depending on the exact metric and dates used.

    • fearandloathing

      Trump could do even better than the market if he just devoted himself full time to scams such as Trump U. That’s clearly something he excels at. Hoodwinking rubes. And he doesn’t have to invest any money since it’s not a business, it’s a scam. The problem is, the more he succeeds at that, the more he becomes a target for law enforcement.

  • Paul wrote

    Trump could have increased his wealth twenty times over in nominal terms, and five-fold in constant dollars, since the mid-1970s simply by passive investment in market-tracking equities funds. Has he done better than that? I doubt it: for one thing if he had, he would have put the evidence up in neon already.

    The evidence is that he’s actually done less well.

  • Crusty

    One of the things that I find most interesting/loathsome/telling about Trump is that is appears he has never donated any money to the Wharton School. Now, personally, I don’t think the Wharton School is a particularly worthy philanthropic cause, although there might be good reasons to donate there, perhaps to support undergraduate financial aid. But regardless, it would seem to be the perfect vehicle for Trump- a pure ego donation, a chance to put your name on something (he likes doing that) and show all your wharton classmates that you have even more money than they do. I mean, what better way to say behold my massive ego and my massive wealth? But he’s never done so. Why not? Well, two reasons, first, he is the opposite of generous. Second, he doesn’t have the money he says he have.

    • malraux

      As I understand it, trump doesn’t pay to put his name on things as in the Mercedes Benz Superdome or the Carnegie whatever. Trump licenses his name/brand to appear on different things, that is, he gets paid for having his name on things. Were the Wharton School to approach him about the Trump endowed chair of business and economics (or whatever), trump would just look confused when he realized that the professor would not have to kick out 10% of his salary to sit in trump’s chair.

      It’s also worth noting that when trump lists his net worth, much of the value there come’s from value trump places on his brand, and not things like the value of real estate or of the business.

      • Crusty

        Yes, Trump’s numbers are basically completely made up- in his mind, a self-valued brand worth $10 billion, plus $100 bucks in a checking account = a net worth of ten billion and 100 bucks.

  • NewishLawyer


    Depressing closing paragraph:

    Then again, given the Trump campaign’s defiance of the usual rules of politics so far, this case might not matter in the slightest. After all, even when the New York Daily News tracked down former Trump U students filing complaints last year, it discovered some possible Trump voters. As Arlene Cohen, who spent $1,495 on a seminar said, “He’s an amazing person and he might even be a good president.” She just wants her $1,495 back.

    A while ago This American Life had a story about a Multi-tiered marketing scheme. I think the scheme was largely aimed at minorities. The guy they focused on was a young man with a family. He seemed to be a promising cook but couldn’t find a way to get more money.

    These schemes always seem to focus on a potentially American desire to be your own boss and answer to no one. To set your own schedule (which often ends up being “I can pick which 80 hours a week I want to work!”) And other stuff. They pray on hopelessness as the Slate article mentions.

    What I wonder is whether this sort of things are unique to the United States. Why does the United States have such a high tolerance of grifters? Do Americans hate paternalism so much that they would rather be screwed, conned, and cheated?

    I scratch my head at how anyone can fall for these schemes but then I feel bad because I do it from a position of privilege. I grew up upper-middle class, my parents made sure I got a good education, and they always taught me that there is no such thing as an easy buck. I also don’t have a family to support and/or huge debts. So I have a luxury of a taking the longer path without much despair.

    Non-American LGMers: Who are the Trumps and grifters of Europe? Asia? Africa? Latin America?

    • Barry Freed

      In David Maurer’s classic “The Big Con” he talks about how easy it is to hit marks again almost immediately after they’d already been taken.

    • Grifting may go under more religious guises in some parts, not that it doesn’t use affinity in the U.S., & I’m sure many sophisticated Euros have been suckered:

      The idea, present in novels (for example, Charles Dickens’ 1844 novel Martin Chuzzlewit and 1857 novel Little Dorrit each described such a scheme), was actually performed in real life by Ponzi who with his operation took in so much money that it was the first to become known throughout the United States

      but let’s face it, people don’t pull up stakes & cross the ocean in wooden ships to a new world (A fantasy they’ve already bought.) because they’re winners.

      At best they’d already been rooked & came here looking to start over, at worst they were one step ahead of the sheriff or neighbors w/ pitchforks.

      Also, Freedom!

      • Rugosa

        The Europeans who invaded this hemisphere were largely grifters, religious cranks, and people who just couldn’t get along with their neighbors.

      • Origami Isopod

        but let’s face it, people don’t pull up stakes & cross the ocean in wooden ships to a new world (A fantasy they’ve already bought.) because they’re winners.

        Ehhhh, I’d say that religious persecution, class oppression, and famine are good reasons. Not everybody who came over here was a mark or a con artist.

    • The Dark God of Time

      We’ve always been a nation where the focus was on the quick buck:

      Eighteenth-century fortunes rested on shaky foundations of bad debts. They were owed to, and owed by, every man of apparent property and probity. Prominent Virginians procrastinated on paying their debts, while living well and compulsively adding new debts to build an expending network of undercapitalized land companies. Robert Beverly, a leading Virginian, explained that his people lived by “being in Debt & making great Promises for the future.” Surely, they reasoned, the next, bigger land speculation would recoup every gamble and retire every debt in one colossal score. The grandest speculations involved millions of acres and functioned like pyramid schemes, requiring new marks to invest at a premium before the original debt became due. In the end, almost no one — except lawyers such as Wirt — outran the approaching wave of destructive debt. Eventually, impatient and desperate creditors consigned a surprising number of apparently wealthy gentlemen to a debtors’ prison or a dotage of genteel poverty.

      Exploiting their political connections, eighteenth-century gentlemen cheaply purchased government titles to thousands of acres of Indian lands. After expelling the natives, the speculators expected to grow rich by retailing lots to the common settlers, who turned the forest into productive farmland. On the edge of a fertile continent, with a population doubling every twenty-five years, American land speculation seemed a sure path to riches — provided the locations were good. As a young man, George Washington recognized that “the greatest Estates we have in this Colony were made … by taking up & purchasing at very low rates the rich back Lands which were thought nothing of in those days, but are now the most valuable Lands we possess.” Resolved to become richer, Washington accumulated political offices and allies, obtaining the leverage to procure an array of lands in the Great Dismal Swamp and on the western frontier in the Ohio valley.


  • NewishLawyer

    I suppose the liberal variant of these kind of grifting or despair job is the so-called Charity Mugger. The people who hang out on urban streets and say “Do you have a minute for Cause X?”

    I went to a few pitches for these kind of jobs when I was in my early twenties and always turned them down because they seemed like scams. My parents also thought they were scams and agreed with my choice.

  • M31

    Oh, I don’t know — sounds like just the innovative, cutting-edge, online-delivery enhanced, student-centered (hey, give them what they want — classes in how to be millionaires!) instructional paradigm of the information age that is being pushed by Ass’t Vice-Provosts of Innovational Innovation all over.

  • Davis

    I had a friend who had a similar experience with Scientology. They kept badgering him to take more and more expensive courses to become an “auditor” and get “clear” or some such shit. My hatred for these people is very personal.

    • Lee Rudolph

      At least with Scientology (or Mormonism) you end up with an externally generated, minutely detailed—albeit thoroughly insane—belief system that covers everything from cosmology to psychology. What do you get from Trumpism? Photo-ops with a cardboard cut-out of He, Trump. (Hey! Get Xenu and Moroni on the line; have I got something for them!!)

      • N__B

        Trumpism is an externally-generated belief system that needs no details to cover everything from cosmology* to psychology**. Details are for LOOOSERS.

        *All of the Mrs. Trumps have been, to my eye, quite expert at the use of make-up.

        **Paging Doctor Freud! Paging Doctor Freud!

      • Davis

        OK, good point, but Scientology has ruined many more people. And $36,000 for a deluxe Trump class is chump change.

  • BruceFromOhio

    The apparently now-automated method of putting a quote in DT’s name drawn from the same stable of endlessly repeated quotes is so fucking tiresome and juvenile. It makes this entire post almost unreadable.

    • BruceFromOhio

      OK, I’m a total ass. Some genius installed a Chrome extension, The Trumpweb 0.2.1, that “Finds any mention of Donald Trump on a website and adds an actual Donald Trump quote to his name.”

      Disabled and now enjoying reading this post, thanks, and sorry for the rude comment above.

    • Lee Rudolph


      I went back through the post and all the comments, looking for stuff in quotation marks. The only thing I found that was attributed to Trump was “a terrific school that did a fantastic job”, itself quoted from the two-year old Atlantic article. That bothers you why?

  • Roger Ailes

    How many of these “students” even tried to borrow a million dollars from their parents?

    They have no one to blame but themselves.

  • Pseudonym

    The money isn’t irrelevant even if it’s incidental amounts to someone like Trump. Money is how you keep score.

  • I also doubt that “Trump University” was primarily about making money, as opposed to stroking this despicable man’s insatiable ego.

    Time for some “inside baseball”.

    What I’m about to tell you is a matter of public record so I’m not revealing any confidential information (thus I’m not betraying my NDA)

    When Donald Trump was forced to sell the Empire State Building, he was a nominal owner. He actually owned 50% of the building for which he put up precisely zero dollars, having arranged equity financing for the building (sidebar: NY real estate is a funny business. There are three ways to own a building: own the physical structure, own the master lease, own the operating lease. The leases are amazingly lucrative, generating post-tax returns in the double digit percentages. The building? Let me continue…).

    What Trump and his investors were going to try and do was to pry the leases out of the hands of the group I worked for. See, the master lease called for five percent of the gross revenues to go to the building operating company, mostly to cover expenses. The intent in the original syndication was that one company would own all three entities, and since the building was not generating revenue per se, it had to be funded. A previous owner had split the building off from a sale but retained it because, you know, Empire State Building. They then sold it years later to the Trump group.

    Trump, in short, was going to sue the lease-hold companies to break the lease.

    It wasn’t until the Supreme Court stepped in and issued a ruling that Trump finally gave up.

    To get back to my original point, none of this was anything more than a con, a two-way con Trump was perpetrating. Yes, he wanted his name on the Most Famous Building In the World, but he also wanted the one billion dollar valuation that happened immediately when we bought the building from his group for $57.5 million. I speculated that he had all along planned to force his co-investors out (not sure that would have been smart. There was talk the Yakuza were involved.) thus picking up a nifty billion dollars in equity for no money down.

    My suspicion with Trump U is that Trump authorized the use of his name (thats the vanity part) for an enormous licensing fee that the University was forced to pay come hell or high water.

    Think of it as Trump “wetting his beak” for the image I’m grasping for. In fact, Trump no longer builds anything himself. Instead, he licenses his brand out to other developers for generally one third the cost to develop a property plus a one percent annual return.

    This is, I think, what’s happening at Trump U.

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