During the Republican debate on Thursday night, the candidates devoted a lot of time to what grade Trump University received from the Better Business Bureau. Was it an A? Was it a D-? Did it change? Why?
Here’s a sample exchange:
TRUMP: (lightly edited for brevity) We have an “A” from the Better Business Bureau. And, people like it. … Many of the people that are witnesses did tremendously well, and made a lot of money…
RUBIO: … That’s false…
TRUMP: … By taking the course.
KELLY: Go ahead, Senator.
TRUMP: You’re going to see, you don’t know…
RUBIO: … The Better Business Bureau gave it a D-.
Lost in the melee, though, was this simple fact: It really doesn’t matter very much whether the now defunct Trump University won the BBB seal of approval. Although its name connotes authority, the BBB isn’t a government agency. It’s also not a consumer protection agency: Being accredited by the organization requires paying a fee. And it most certainly is not a U.S. Department of Education university accreditation agency.
While the BBB is not commenting on any aspect of the Trump story, its gotten its fair share of blowback over the years, mainly over the allegation that its grading system is pay-to-play. In 2013, a local chapter was forced out amid much scandal, after a 2010 20/20 investigation revealed the chapter had been essentially extorting local businesses. Last year, CNNMoney reported the names of several allegedly fraudulent businesses with A-ratings and noting that many major companies (the ones that don’t bother to work with the BBB) get have terrible grades. Starbucks, for example, has a D-.
In other words, the BBB works like many other rating agencies: It’s funded by the fees it gets from the businesses it rates. The potential conflict of interest inherent in that common structure has been pilloried plenty in the wake of the financial crisis.
To hear Trump tell it himself, his poor rating was not due to underlying issues with the business, but instead because Trump University did not care enough about sending the information the BBB requests:
TRUMP: … The only reason that is was a “D” was because we didn’t care — we didn’t give them the information…
RUBIO: … A third of the people (INAUDIBLE)…
TRUMP: … When they got the information it became an “A”…
Soon after this exchange, Fox News moderator Megyn Kelly noted that Trump University’s latest publicly available grade from the BBB was, indeed, a D-. In fact, according to a BBB statement, the business’s grade had fluctuated between D- and A+ (it’s not currently rated). No matter how or when it got that D, or whether it was warranted, Trump’s claim that he didn’t care enough about the grade to do the work to get an A is completely believable.