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State Attorneys General get caught up in 'Trump U' scandal

When it comes to "Trump University," it's not just the Republican presidential candidate who finds himself in hot water.
Real estate mogul Donald Trump holds a media conference announcing the establishment of Trump University May 23, 2005 in New York. N.Y. (Photo by Thos Robinson/Getty)
Real estate mogul Donald Trump holds a media conference announcing the establishment of Trump University May 23, 2005 in New York. N.Y.
One of striking things about the "Trump University" scandal is that, unlike most political stories, it includes several, loosely related controversies at the same time. First, of course, are the straightforward allegations that the "university" was really a scam operation, bilking students as part of a fraudulent scheme.
Second is the racism: Donald Trump has been relentless recently in his ugly and overtly racist criticisms of Judge U.S. District Judge Gonzalo Curiel, who's overseeing a civil case against the "school." This aspect of the controversy has taken the entire presidential campaign in an unexpected direction.
And then there's the third angle: the Republican state Attorneys General who took an interest in the fraud allegations surrounding "Trump University," but then changed their mind around the time of receiving quite a bit of money from Team Trump.
Let's start in Florida, where the Associated Press reported last week:

Florida Attorney General Pam Bondi briefly considered joining with [New York Attorney General Eric Schneiderman] in a multi-state suit against Trump University. Three days after Bondi's spokeswoman was quoted in local media reports as saying the office was reviewing the New York lawsuit, the Donald J. Trump Foundation made a $25,000 contribution to a political fundraising committee supporting Bondi's re-election campaign. Bondi, a Republican, soon dropped her investigation, citing insufficient grounds to proceed.

The Orlando Sentinel's Scott Maxwell ran a lengthy report on this over the weekend, noting that it's "wildly unethical" for a prosecutor to "take money from a potential target."
But that's not all. The same report noted that Bondi's office, confronted with several dozen complaints from Floridians who felt ripped off by Trump's enterprise, put little effort into investigating the complaints.
The state AG's office apparently wrote letters to Floridians urging them to hire their own private counsel to represent their interests. In one instance, a man who said "Trump University" took him for $26,000 and forced him into bankruptcy urged to Bondi to follow the New York attorney general's lead in investigating the matter. Bondi's office responded by telling the man to go to Google "to search for information on any class action lawsuits you may benefit from."
The Orlando Sentinel columnist concluded, "I have repeatedly asked [Bondi] to explain why she thinks her actions were appropriate. She has yet to provide an answer ... probably because she knows there isn't a legitimate one."
And there's Texas.
The Associated Press also reported last week that the office of then-Texas Attorney General Greg Abbott (R), who's now the state's governor, opened a civil investigation into "Trump University" possibly engaging in "deceptive trade practices." In 2010, Trump's enterprise agreed to cease its operations in the Lone Star State, and Abbott quietly dropped the probe. Trump later donated $35,000 to Abbott's gubernatorial campaign.
But the story doesn't end there. The AP went on to report over the weekend that Abbott's successor in the state AG's office, Republican Ken Paxton, "moved Friday to muzzle a former state regulator who says he was ordered in 2010 to drop a fraud investigation into Trump University for political reasons."

Paxton's office issued a cease and desist letter to former Deputy Chief of Consumer Protection John Owens after he made public copies of a 14-page internal summary of the state's case against Donald Trump for scamming millions from students of his namesake real estate seminar. Owens, now retired, said his team had built a solid case against the now-presumptive Republican presidential nominee, but was told to drop it after Trump's company agreed to cease operations in Texas. The former state regulator told The Associated Press on Friday that decision was highly unusual and left the bilked students on their own to attempt to recover their tuition money from the celebrity businessman. According to the documents provided by Owens, his team sought to sue Trump, his company and several business associates to help recover more than $2.6 million students spent on seminars and materials, plus another $2.8 million in penalties and fees.

According to Owens, who answered to Abbott at the time, he was so surprised by the stand-down order, and the developments were so suspicious, that he "made a copy of the case file and took it home."
As for what Owens believes happened, he told the Dallas Morning News, "The decision not to sue [Trump] was political. Had [Trump] not been involved in politics to the extent he was at the time, we would have gotten approval. Had he been just some other scam artist, we would have sued him."
* Update: I heard this morning from Gov. Abbott's office, who emailed me this statement from Matt Hirsch, the governor's communications director: “The Texas Attorney General’s office investigated Trump U and its demands were met -- Trump U was forced out of Texas and consumers were protected. It's absurd to suggest any connection between a case that has been closed and a donation to Governor Abbott four years later.”
The office also referred me to this Houston Chronicle piece from David Morales, who worked as Texas' Deputy Attorney General and who oversaw the Trump U probe. His piece says Abbott was not involved in the decision.