The Texas Observer

Trump Nominates Austin Attorney Who Stymied Investigation Into Trump University

David S. Morales, Donald Trump

Trump Nominates Austin Attorney Who Stymied Investigation Into Trump University

President Donald Trump this week nominated to fill a federal judge vacancy the man who claimed responsibility for the state of Texas’ failure to pursue a $5.4 million settlement against the president and his now-defunct Trump University.

Trump’s nominee, David S. Morales, said in 2016 that he was responsible for pulling the plug on an investigation into Trump University when he served as deputy attorney general for then-Attorney General Greg Abbott. The investigation fizzled in 2010, but when a whistleblower in 2016 accused Abbott of going easy on Trump for political reasons, Morales said it was his call, not Abbott’s.

In 2009, the attorney general’s consumer protection division began investigating Trump University. Ultimately brought down by numerous fraud lawsuits across the country, Trump U existed for less than a decade and sold wealth-creation “education” services for thousands of dollars. Despite not providing academic credit or even grading its thousands of students, Trump and the company promised the services would make clients rich.

In May 2010, according to attorney general records obtained by the Dallas Morning News, the chief of the consumer protection division sought formal approval from Morales to “enter into settlement negotiations” with Trump U for its “false, misleading and deceptive practices.” Trump is individually named for his “direct involvement in this business.”

The attorney general was preparing to seek $5.4 million in legal fees and restitution for the nearly 500 Texans who spent millions on the “university.” (At least 39 Texans purchased Trump’s $35,000 “Gold Elite” package.) But for reasons that weren’t made public at the time, the state never filed suit or sought monetary damages for the allegedly swindled Texans.

Screengrab of attorney general investigation records into Trump University.  Records obtained by the Dallas Morning News in 2016.

Trump U ultimately ceased operations in 2010 because it was the target of investigations and lawsuits in other states. On Tuesday, a federal judge in California approved a $25 million settlement for a similar case against Trump University.

“That agreement, [for Trump University] to permanently and immediately leave Texas was, in my opinion, the most important element of resolving this investigation,” Morales said in 2016.

John Owens, a former Abbott deputy, claimed in a 2016 interview with the Dallas Morning News that Abbott shut the investigation down because of his political aspirations to become governor and his friendship with Trump. In 2013 and 2014, Trump donated $35,000 in campaign contributions to Abbott.

After serving as deputy attorney general, Morales served as general counsel for Governor Rick Perry and most recently worked as a partner at Austin firm Kelly, Hart and Hallman. If confirmed by the U.S. Senate Judiciary Committee, Morales will fill a U.S. district court judge seat in Corpus Christi that has been vacant for seven years.

Houston state Senator Sylvia Garcia, a former judge who is the presumptive successor of retiring Democratic Congressman Gene Green, said Morales’ decision to let Trump walk away unscathed after defrauding Texans raises concerns about his judgement and impartiality.

“This appointment shows us once again that the only currency that matters in this administration is blind loyalty,” Garcia wrote in a statement to the Observer.

Morales has already received endorsements from Texas Senators Ted Cruz and John Cornyn. Texas’ current attorney general, Ken Paxton, who is fighting state felony fraud charges, praised Morales as having “an unwavering fidelity to the rule of law and the U.S. Constitution.”

Morales’ loyalty is unwavering, no doubt, but to whom?