President-elect Donald Trump has agreed to pay $25 million to former students of his for-profit Trump University as part of a settlement that resolves three outstanding lawsuits against him, including one in which he was set to testify in a trial that was due to begin in San Diego later this month.
As part of the agreement, Trump will pay $1 million in penalties to the state of New York for violating state education laws by labeling his nonaccredited school a “university” without registering as an educational institution with New York state officials, according to New York Attorney General Eric T. Schneiderman, who announced the settlement Friday afternoon. The deal includes no admission of wrongdoing.
“In 2013, my office sued Donald Trump for swindling thousands of innocent Americans out of millions of dollars through a scheme known as Trump University,” Schneiderman said in a statement. “Donald Trump 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. Today, that all changes. Today’s $25 million settlement agreement is a stunning reversal by Donald Trump and a major victory for the over 6,000 victims of his fraudulent university.”
The announcement came after days of frantic negotiations among the parties that began last week, after Trump was elected president and U.S. Judge Gonzalo Curiel — the U.S.-born judge whom Trump repeatedly attacked during the campaign as biased due to his “Mexican” heritage — began prodding the parties to resolve the cases. The first of three lawsuits was scheduled to start in Curiel’s courtroom Nov. 28. Trump’s lawyers had filed motions urging that the trial date be postponed, arguing that their client was too busy assembling his new administration to testify in a civil trial.
Trump attorney Daniel Petrocelli said Friday that Trump was determined to resolve the controversy.
“There’s an old saying that we lawyers have that nobody is happy in a settlement. But I don’t think this is true, this is a settlement we can all be happy about and look forward to putting this behind us and moving forward. President-elect Trump is keenly interested in tackling the problems of our country and moving forward.”
On Saturday morning, Trump echoed that sentiment, saying he wanted to focus on governing:
The negotiations were a three-sided affair, involving Trump’s lawyers in Los Angeles, plaintiff’s lawyers in San Diego and Schneiderman’s office in New York, according to a source familiar with the talks. During the negotiations, Trump — who vowed during the campaign to never settle the cases — balked at the wording of the proposed agreement and refused to accept that he was paying “penalties” for violating state laws, according to the source. Friday’s announcement by Schneiderman used the word “penalties” for Trump’s alleged violation of state education laws. The final terms of the agreement, however, were presented to Curiel on Friday afternoon. Curiel must still approve the settlement for it to take effect. Preliminary approval could come in as few as 30 days, though final approval may take 30 to 60 days beyond that.
Attorneys for the plaintiffs, who announced after the trial that they would not take any of the fees from the settlement and deemed this case pro bono, looked more relaxed Friday than in recent hearings. They praised Curiel’s handling of the case.
“I can’t say enough how much I admire the grace and decorum in these proceedings,” plaintiff attorney Jason Forge said. “Outside the court, things got pretty ugly, frankly, and I have not seen any of that in the court. No bias to either side. Your honor set an example for all of us, for lawyers on both sides.”
The Trump University case concerns the running of a for-profit business school launched by Trump 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 former students suing him 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, alleged that the seminars were little more than an “infomercial” and that the Trump mentors offered “no practical advice” and “mostly disappeared.”
Trump has consistently denied the allegations and insisted that questionnaires filled out by students after the seminars showed that “98 percent” of them were positive about their experiences.
Under the terms of the settlement, all 6,000 students who enrolled in Trump University would be eligible to receive some compensation, although the amounts will vary widely depending on how much they paid for courses, the source familiar with the deal said. Lawyers for the plaintiffs suggested some could receive close to $30,000.
Jamie Reno contributed reporting to this story from San Diego.