Trump defends his school, prosecutor calls it 'a scam'
POSTED: Monday, August 26, 2013 - 10:00am
UPDATED: Monday, August 26, 2013 - 10:04am
Jose Pagliery NEW YORK (CNNMoney) — Donald Trump's real estate school is under attack by New York's top prosecutor, and both sides took to the airwaves Monday to elaborate on the upcoming legal battle.
During separate interviews on CNN, New York State Attorney General Eric Schneiderman called the school a "bait-and-switch scheme," and Trump accused the prosecutor of actions akin to extortion.
Still, Trump dismissed the importance of the matter.
"He's a lightweight," Trump said of the state's attorney general.
It's the aftermath of a $40 million civil lawsuit Schneiderman filed against Trump on Saturday, accusing Trump of defrauding students who attended the billionaire's for-profit school.
The lawsuit claims Trump used his celebrity status to lure students into a school that over-promised and under-delivered.
A free seminar urged prospective students to pay $1,495 for a three-day workshop.
That, in turn, was used to sell a $34,995 course.
In the school's commercials, Trump tells viewers, "We're going to teach you better than the business schools are going to teach you. At Trump University, we teach success. That's what it's all about: success. It's going to happen to you," he says, as triumphant horns blast in the background.
Schneiderman said Monday that the lawsuit completes one branch of a long-running investigation into for-profit schools.
He said it was prompted by dozens of complaints from former students who contacted his office and the Better Business Bureau, a nationwide nonprofit organization.
The attorney general said teachers never got certified.
He noted Trump University isn't even a university, which is defined as a collection of colleges.
And although students were promised an in-person meeting with Trump, "all they got was the chance to stand next to a life-sized poster," Schneiderman said.
"We discovered that it was a classic bait-and-switch scheme. It was a scam," he said.
Schneiderman said his lawsuit partly relies on the sworn testimony of Trump University's former president, who explained that Trump maintained a close eye on the school and read all of its promotional material.
Schneiderman also said he got hold of the school's "playbook," which insisted that instructors keep pitching the upgraded, more expensive programs.
"This is a pretty straight-forward case. The documents pretty much entitle us to a judgment," Scheiderman said.
When Trump appeared on CNN by phone later in the morning, he defended his program by noting the school had received stellar evaluations by students.
"We didn't think we were going to get sued because we have a 98% approval rating," Trump said. "If you go to Wharton or Harvard, they didn't have a 98% approval rating. People loved the school. The school was terrific."
Trump then turned his attention to the prosecutor, saying that Schneiderman approached Trump for political donations -- and when Trump refused, Scheiderman followed with a lawsuit as revenge.
"They solicited us during the investigation for campaign contributions," Trump said.
In anticipation to those accusations, Scheiderman had said, "Prosecutors are all used to people who commit fraud making wild accusations when they're caught."
But Trump cast the legal challenge as a power battle between an overreaching government and a private powerhouse -- himself.
"I could have settled this case very easily. They wanted to settle. I chose not to," Trump said. "We have a lot of happy students. They'll be testifying."