Did Abbott Let Scammy Trump U Off Easy? This Ex-AG Staffer Says He Did

June 6, 2016 6:00 a.m.

Texas Gov. Greg Abbott is living every Republican’s worst nightmare these days: being tied to a controversy surrounding Donald Trump.

For that, he has John Owens to thank.

In an interview with TPM on Friday, the morning after outlets in Texas published stories with the retired career government lawyer’s allegations, Owens said he had been so busy with press inquiries that he barely had time to finish breakfast.

“I am praying it’s just the 24 hour news cycle,” Owens said.

Owens served as the deputy director of Texas’ Consumer Protection Division under Abbott when he was the state attorney general. After the Associated Press reported Thursday that an investigation into Trump U a few years back was “quietly dropped” under Abbott and that three years later Trump donated to Abbott’s gubernatorial campaign, Owens spoke about how he remembered the office handling the case.

What started as a Facebook comment on Thursday became by the end of the day Friday a cease and desist letter from the Texas Attorney General’s office warning his disclosures violated the law.

In Owens’ retelling, Abbott dropped the investigation for political reasons, and if it was any business other than Trump’s, legal action would have been taken. (Abbott’s office is denying the claims).

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As internal AG documents posted by the Dallas Morning News reveal, the Houston division of the Consumer Protection Division sought to investigate Trump U in October 2009, a request that was approved by deputy attorney general for civil litigation David Morales, according to Owens.

“It didn’t take much to open an investigation. I don’t think anybody really thought much about it,” Owens said. “We go in. Get an injunction. Sometimes we freeze their assets. We fight for Texas consumers. Get their money back.”

The investigation found the university was advertising “free” seminars that falsely promised credits for continuing education credits in Texas real estate. The programs were never officially credentialed by the state real estate commission, the docs said, and the seminars were actually just used to convince potential customers to pay for more programming.

By May 2010, the division was ready to move forward with legal action. On May 6, it filed a request to ready a legal complaint against Trump personally as well as Trump University, and on May 11, it outlined the settlement it would propose to Trump’s lawyers.

“We wanted to have a settlement conference on May 19, where we handed them the petition, we handed them our demands, we sat down with the lawyers, and we were going to say, ‘Give us X-million dollars or we are going to file this lawsuit, we’re going to see you in court,’” Owens said. “And we were denied that opportunity.”

The internal AG documents allege Trump U had engaged in “false, misleading and deceptive practices in promoting and selling their real estate ventures in Texas.” It had suggested a $3.75 million settlement, which included recouping the $2.6 million Texas consumers had allegedly been defrauded. Owens said a meeting had even been scheduled with Trump’s lawyers for May 19, but, as he remembers it, they had asked for a little more time to prepare.

But, as his team was looking into rescheduling, they were told there would be no meeting after all.

“And then we got the word, don’t reschedule anything, the case is over. Drop it. Close it. We’re not going to sue Trump University,” Owens said. “The Houston lawyers told me that they’re not going to go after Trump because it’s Donald Trump, so I took from that that he’s being treated differently because he is Donald Trump and that’s a political decision and it was made at the highest levels of the AG’s office.”

Owen’s account was picked up by the Dallas Morning News and the Houston Chronicle after a comment he wrote on Facebook in response to a story about Trump’s connections to Mike and Irene Milin, who operated various get-quick-rich schemes. One of their operations, Information Seminars International, was sued by the Texas AG’s office in 1993 for deceptive trade practices.

“I posted in Facebook, and in kind of a comment to that post that [said], ‘When I was in the AG’s office we had a case against Trump U and Trump, and Greg Abbott refused to do it. Politics as usual,’” he said. One of his followers — he’s not sure who — passed the comment along to a reporter, who then contacted Owens.

“I’m like, ‘Sure I’ll talk. I’m retired. What the heck? And it will be a blurb in the metro section,” Owens said.

The Texas governor’s office is defending Abbott’s handling of the Trump U case and denying that the &35,000 donation Trump gave to Abbott’s 2014 gubernatorial campaign was any sort of quid pro quo.

“The Texas Attorney Generals 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,” Matt Hirsch, the governor’s communications director, said in a statement.

Friday afternoon the the Attorney General’s office, now led by Ken Paxton, also sent Owens a cease and desist letter alleging that the former staffer was sharing “privileged and private information from state records.” It said that since Owens served as a lawyer, he violated various laws relating to his responsibilities as a fiduciary.

“A lawyer shall not reveal a former client’s confidential information to anyone other than the client, the client’s representatives, or the employees of the layer’s law firm,” the letter said.

Owens responded to the letter in the Houston Chronicle over the weekend.

“I think the information I provided to the press was important and needed to be shared with the public,” he told the Chronicle, adding, “I stand by everything I have said, and everything I have said is true and correct.”

Additionally, Morales, the deputy attorney general for civil litigation at the time, said that it was his decision, not Abbott’s, to conclude the investigation the way it was.

“During that investigation and following subsequent demands for documents, Trump University agreed to temporarily suspended its Texas operations. By May 2010, Trump University had agreed to permanently suspend of all operations in Texas,” Morales said in a letter to the editor submitted to the Dallas Morning News and Houston Chronicle. “That agreement to permanently and immediately leave Texas was, in my opinion, the most important element of resolving this investigation. It ensured that no further Texas citizens would be exposed to the company and it did not preclude those consumers who felt they wanted a refund to demand it from Trump University or in court.”

He added that he did not discuss the decision with Abbott until after it had been made. Owens said Morales had also contacted personally him last week to say the decision was his.

“They could have reversed him and the bottom line is, they can spin it all they want, they collectively made this decision,” Owens said. “They treated him differently because he is Donald Trump. They swept it under the rug.”

As for the argument that Abbott’s office chased Trump U out of Texas, Owens counters that the program had stopped its operations while the investigation was still ongoing, as Morales statement also hints. This is normally the case with investigations like the one into Trump U, Owens said, and at the very least they would usually end with a more formal injunction, in addition to a monetary settlement to pay back the consumers defrauded.

“Once they got our first subpoena, the first thing the lawyers said was, ‘Okay, we’ll stop doing business in Texas.’ That’s common. We didn’t do anything,” Owens said. “In no other case of this magnitude did we leave consumers with $2.6 million out-of-pocket, some of them their life savings, high and dry like this.”

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