The Devil Inside the Beltway with Michael Daugherty

In this episode, Jason Hartman talks to Michael Daugherty about corruption. Michael shares his story of extortion, only to be left hanging by the government. He also warns about the dangers of academics like Woodrow Wilson and the cycle of corruption for keeping safe amid the storm known as D.C. Lastly, he discusses Section 5 of the FTC Act.

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Welcome to the show. This is Jason Hartman, your host and every 10th episode, we do something kind of special kind of different. What we do is we go off topic so regardless of which show it is on the Hartman media network, whether it be one of the financial shows economics, real estate, investing, travel, longevity, all of the other topics that we have every 10th episode, we go off topic, and we explore something of general interest, something of general life success value. And so many of our listeners around the world in 164 countries have absolutely loved our 10th episode shows. So that’s what we’re gonna do today. And let’s go ahead and get to our guest with a special 10th episode show. And of course, on the next episode, we’ll be back to our regular programming. Here we go.

It’s my pleasure to welcome Michael Daugherty. He’s the CEO of the cyber Education Foundation and founder of the Justice Society. He’s author of the devil inside the beltway, the shocking expos day of the US government surveillance and overreach into cybersecurity medicine, and small business. Michael, welcome. How are you?

Michael Daugherty 1:47
I’m well, how are you?

Jason Hartman 1:48
Good. Good. Good to have you. Thanks for joining us. So you do a lot of things. And you had a tremendous harrowing time fighting the federal government for several years, and your book talking about how they just massively overreached and it’s amazing to me how people really need to be concerned about government abuse of power. And, you know, the government’s got unlimited resources, unlimited budgets, and, and none of us have that. And and, you know, prosecutors and, and people with regulatory agencies out to collect fines. You know, they’re they’re just looking to grow the resume. Right? And that is very unfair many times, isn’t it?

Michael Daugherty 2:30
Well, true. And the infrastructure to do this started in 1914, when Woodrow Wilson really started the first bureaucracy, but it slowly grew like a innocent little lamb into a big beast. But it was weaponized by the Obama administration, where all the insiders, and many of them are still embedded in government think they’re right, read the salience skis, Rules for Radicals, understand the concept of power. Now, this has gone on the FBI for years, I mean, these tactics of intimidation and wearing you down. It’s a very, very brief playbook. It’s just, here’s what’s going to be presented about you, you can just cooperate now, please. Or we will take you through the process and the process will break you financially ruin your reputation. And even if you win, in the end, you’ll be you know, beat to a pulp. So which would you like, that is an old playbook. However, the use of the playbook is very, very, very prevalent. Now we start with Mike Flynn, only because he’s so well known. But it happens all the time. And it happened with my company as well. So what we don’t have is enough stories about it, because people, I think most Americans go well, it’s the IRS, you know, that I’m afraid of and they’ll come at me. And so if you’re in trouble the IRS, I don’t want them to see me as your friends all this hide over here. But it’s more than term Revenue Service now. It’s it’s all over the place. It’s all the agencies, it’s the playbook of getting you to submit.

Jason Hartman 4:02
This is the problem. There are so many obscure laws nowadays, that ignorance of the law really shouldn’t be an excuse. It shouldn’t be an excuse when the laws are simple and easy to understand. But now we’ve moved so far beyond that. It’s absolutely mind-boggling when you refer to 1914. And Woodrow Wilson and the first bureaucracy, to which bureaucracy are you referring?

Michael Daugherty 4:31
Well, Woodrow Wilson was an academic guy. And they’re always dangerous because they think they know everything with no real world experience. And he had this great intention of, you know, what, we’re having the medical Revolution, the Industrial Revolution, and these politicians shouldn’t regulate it, because they’re politicians. So we have to have these bureaucracies. And what he forgot was that the founding fathers didn’t believe anyone with power could be trusted. And Woodrow Wilson thought the government with power could be trusted. So getting experts to regulate an industry is fine. And that’s what the agencies were supposed to be. They’re supposed to be experts that had drilled down specific knowledge in an area. But the problem was that he gave them unbelievable power. And then that really morphed over the next 2030 years federal FDR senate over the edge, but they have, you know, they have their own courts, they make their own rules, you have to go through their own procedures first, before you can get to an article report. So essentially, the agencies can do whatever the heck they want to, and you can’t get anyone to help you on the other side, until they’re done with you. And they’re done. That part of they’re done with you is really a torture chamber of investigation. And that’s what Woodrow Wilson started.

Jason Hartman 5:42
Yeah. Okay. So what the I mean, super briefly here, because there’s a lot of other stuff I want to talk about your story is that you had a medical lab business, and you got hacked. And so cyber security is a big deal nowadays, you know, I’ve hired cyber investigators in my business before. And competitors will do all kinds of things to try and mess up your technology. And you know, there’s just, it’s a constant thing, or just just hackers that want to make a name for themselves on the internet, you know, these obscure, weird people. And basically, it was an extortion almost like a ransom and not ransomware concept. A little different. But tell us about that real just real briefly, if you will.

Michael Daugherty 6:23
Okay, so so this is a 2008, my medical laboratory that had 700,000 patients, we got a call from a guy and he said, we’ve got your file, and it’s out in cyberspace, and we do remediation. Would you like to pass? I mean, would you like to hire us? And I said, What’s your IP address? How did you find it? And he wouldn’t tell me unless I paid him? Well, we didn’t believe anything. He said, we thought that was extortion, we wouldn’t pay him. He was very upset about that. And he turns over to the government, the government start investigating us, not him in 2010. And that went on to courts to we didn’t get a final order to the end of the decade, December 23 2019, we actually were awarded almost a million dollars for a $16 million battle. And it’s because we learned that this guy didn’t find it in cyberspace. And he was working with the FBI, he was given FBI weapons to use for investigations that were legit. And outside the legit investigations. He was building an intimidation racket breaking into companies stealing files, altering the metadata, lying to companies, and a lot of corporations just write a check, because everyone’s covering their own tail.

Jason Hartman 7:30
Sure. It’s the same kind of companies that wrote checks to, you know, for many, many millions of dollars years ago to Jesse Jackson, when he would shake them down, accusing them of racism. And it’s in basically the way the government and Jesse Jackson wasn’t a government actor. In that sense. He was just a shakedown artists. But the way the government gets around things, is they get a private party or a private company to be a proxy for their end goal. And now we see it with big tech, we see that, of course, everybody has the right to free speech protected by the First Amendment. But what they do is now they’re using these giant tech companies as proxies for their agenda. And I’m sure you’ll want to get into that. Because basically, the tech companies can just say, well, you don’t have the right to free speech on our platform, which is a very legitimate idea. But they’ve become so large, they have gdps, bigger than many countries. So there’s not an alternative. Now, there’s not an alternative platform anymore, which is the problem among many nowadays. So the government use the product, they had the proxy of this person, basically hacking, and then they use that hacking information for their own benefit.

Michael Daugherty 8:49
Right. And they admitted, the Justice Department is told friends of mine who don’t know who doesn’t know, they’re speaking to friends of mine, that they get a lot of leads from these criminals. So they they turn the other cheek A lot of times, but what’s worse than my instance, is that they’re not going to indict. Because how are they going to do? I mean, a defense lawyer is going to if they indict the guy’s a defense lawyer is gonna go well, wait a minute. I, Your Honor, the prosecutor was the CO conspirator. So when you have the FBI and the Justice Department that won’t indict because they’re making stuff up and they have all sorts of power to bury it. They can bury everything, and we’re learning how unbelievably corrupt which is not a surprise. The Founding Fathers knew and we have forgotten that it’s not about government. It’s about anything that gets huge power goes

Jason Hartman 9:37
Yeah. Yeah. I’m not i’m not just blaming government. It’s just

Michael Daugherty 9:41
No, no, no, that’s. I’m saying you should blame government because government is the worst because they can. They have such power, they can hide in the woodwork, they’re parasites now. You know, and there’s blood on everyone’s hands because it when you go to DC I mean, here I was a healthcare entrepreneur and I never really worked quote unquote, Dc. Before and the number one shock of DC was that all these people know this. And they’re fine with it. I mean, I was absolutely I mean, it’s laughable. I mean, they’ll laugh at you if you don’t know that because Oh, another naive outside the Beltway guy. I mean, it’s it’s more of a fear culture, a survival culture, it’s not like they have meetings of corruption, it’s that everyone knows to keep their eyes, the ground, mind their own damn business, and you don’t blow the whistle on anybody, because you never know your enemy today will be your friend tomorrow. And you know, in 15 years, you might be needing them. So everyone just looks the other way. When I was looking for a lawyer in DC to take on the government, I found lawyer after lawyer after lawyer that just laughed and said, you know, forget justice. This is administrative law, you know,

Jason Hartman 10:47
Instead of being the typical, I mean, I don’t have much to do with this. But I just hear stories from the outside, have I interviewed many people on this. Administrative law instead of civil law? You know, they have like this star chamber judicial process, instead of this sort of transparent court system, where anybody gets to go sit in the back and write a story about it. This is all like a Pfizer court. Right?

Michael Daugherty 11:16
Right. It’s all the sneaky legal words, and the judges look the other way. And I mean, it’s all predicated on this false foundation of, well, we’re the government, we’re trustworthy, so and it’s our job to protect everyone else. So you don’t get discovery in your disputes. It’s a civil matter. It’s about you know, a cease and desist order. It sounds like these little tiny hand slap. So what’s the big deal, but because of the internet, they have got massive power to ruin your reputation. Because the American public has no attention span whatsoever. Though, they read headlines, that’s it. And the Washington Post and the New York Times play that like a fiddle, and they use the words beautifully, they’ll stick allegedly in there. And then either they don’t have to, but don’t know what the word allegedly is. And they’ll believe it, did it and you’re dead. And that was the biggest power they have over everybody. And so when you go approach multi million, like Facebook, $5 billion, ooh, drop in the bucket, Google gets fined 325 million. That was like three and a half minutes of revenue, you know. So

Jason Hartman 12:24
Wait a second. Here’s the thing about those fines. When big giant companies pay a fine, it doesn’t hurt the perpetrator very much, if at all, the shareholders are the one paying the fine. The public pays the fine. Mark Zuckerberg isn’t paying fine. Maybe he’s sharing a little bit in it. Anybody could argue but because of the way companies are set up and the way public markets are structured, that burden falls to all the middle class shareholders is

Michael Daugherty 12:57
And that bounces back they just turn the money and then they scrape it off. And then it’s forgotten in a matter of months. Forgotten. And then the agency goes you know, breaks its arm patting itself on the back going on some sort of congratulation tour. And the people in the audience of their self congratulation tour is big law, agencies, politicians and media. All these people are in the business. If they didn’t have a crisis, they wouldn’t have a living. So they go from agency to big law to big tech, I mean, the commissioner that recused herself, from my case, Julie Brill, she left the agency she comes out of you know, Vermont, land of the Liberal government, that’s a small town that probably can work as a small town to a DC Commissioner who is way in overhead. Then she goes to big law. And then now she’s the VP at Microsoft, what is surprise, and she’s in a culture, and she’s just an example of self congratulation. I mean, just it’s really insidious. And her audiences are everyone that’s making money off this, all the privacy people. I mean, there’s a whole industry of people that protect us, quote, unquote, that are insanely incompetent, and completely unaccountable and make a really good living.

Jason Hartman 14:17
Yeah, it’s really something. A lot of things need to change. Well, tell us in in chapter six of your book, you talk about section five of the FTC Act, the trap that Congress laid, what is that?

Michael Daugherty 14:31
Well, Congress when they started the administrative state loves congressman love the Ministry of State, I don’t care what party they’re in. And the reason is because Congress doesn’t do anything dirty. They can be the good guy, or they can ignore you, and all the agencies do the bad stuff. And the democrats go, Oh, we need them to save the world and nothing happens and they don’t have to do anything. And they approve this law. That said the Federal Trade Commission has section five to protect consumers from unfairness and exception. Now deceptions kind of easy to prove. But unfairness is like ugliness. It’s in the eye of the beholder. And there’s no definition for what is unfair. So and Congress never acts on anything. So the FTC appoints itself to what they think is unfair. And they decided that the cyber security done the wrong way was unfair. But they never say what is fair. And their investigation powers are so crazy that I was the first person first person to take them out on this, because you have to be crazy enough to walk through courts and spend millions over years over a stupid little question. So if you don’t get to a judge, they can do what they want. And Congress isn’t going to change a thing because Congress loves agencies, because it keeps them just, you know, saying, My hands are tied, I don’t have the power, please send me a check. My hands are tied. I don’t have the power, please send me a check. And they just raise money and have a great life and jet around and blame the other side. And it’s just and it’s, it’s built to be a mess anyway. So they created this beat now did they knew no, it was such a beast. 100 years ago? No. But this is what happens. Right? And everyone that created this beast is dead and can’t see it. FDR would be mortified. I got to think you’d be mortified. I mean, he was afraid of it when it was going on. He knew. But you know, it moves so slowly, but the technological age is expanded. And then the Obama presidency really create a playbook of how to put these corrupt people in, and just their warriors. These people are absolutely brutal lawyers. They’re playing just like these antiva people, are they? It is, you’re sitting here vulnerable and stunned, and they’re out there intentionally breaking the rules, because to them, it’s war. And that means all spare, right.

Jason Hartman 16:55
Yeah. Okay. Okay. So let’s switch gears now and talk about you know, what’s going on in the world. You have some thoughts about, you know, Twitter, removing President Trump’s video tribute to George Floyd, what’s their rationale for that one, I mean, this is unbelievable. We have these, we have these non government censors, and they censor what they want. And they don’t censor what they don’t want. And they fight subpoenas. And they’re absolutely disgusting. These big tech companies. I mean, they are just appalling.

Michael Daugherty 17:30
If they like to be the alien, how it was tiny in the first 10 minutes, and it’s full grown and like an hour, and the tech companies grew from nothing to massive so fast, that they can afford anything. And really, Microsoft getting a job with the government scared all tech ahead of time. And these people are their lawyers up and they’re ready for battle. Not only that they have armies of lobbyists. I mean, it’s just unbelievable how their influence over the government is insane.

Jason Hartman 18:00
I mean, listen, I don’t love everything about Elizabeth Warren by any stretch. But I do like the way she wants to hold Wall Street and big tech accountable. I gotta tell you, I really do agree with her on that stuff.

Michael Daugherty 18:13
Yeah, but I think everyone that was honest, would want a home account. It’s the how you it’s utterly impossible. Unless we have some massive change. It’s probably gonna be through antitrust. But what I want to say is, here’s what they’re doing. And here’s what she’s not saying what she’s saying about today. This is nothing, nothing less than book burning. They are book burning. It’s just technology has changed the books. And this is all they’re doing. And people better wake up.

Jason Hartman 18:41
It’s just it’s just like the socialist Nazis that burned the books. This is Ray Bradbury’s Fahrenheit 451 all over again, you know? Right, right. Yeah. It’s It’s thought the thought police, they’re, they’re just everywhere. And it is unbelievable that they can get away with it. It’s absolutely appalling. What are we going to do? I mean, antitrust. But, you know, no administration has had any real appetite to go after antitrust in any significant way for decades. It’s like they just don’t do it.

Michael Daugherty 19:09
Wow, that’s big. Again, look, this country is on a precipice bigger than it was in 2016, which I can’t believe I’m saying. And that’s because when Trump won, he was basically and I don’t think Trump understood what he was getting into. I really don’t, because you have to see it to believe it really, truly in your gut. And I’ve seen the beast and I’ve danced with the Bs, or I would not have this opinion. So clearly, but his hand went on that mask, and he started to rip it off because they came at him first. And there are a lot of powers against the populace of this country a lot. And we’re in shock. We’re watching what the media has just done with COVID. I mean, they’re lying, lying left and right had been about treatments and medical treatments and they spin. Let me give you an example because I’ve been in medicine for 30 years, this surgery. toxic chloroquine thing. When I see the New York Times tried to beat up or the Washington Post beat up Trump because they Gaslight everyone that he said hydroxychloroquine would be a cure. No one has said a drugstore cleanse a cure. It’s a pill that helps because it can be very much anti inflammatory at a very early stage. But they and the point isn’t the detail. The point is, they don’t care if they’re messing with a successful disease treatment. This is about power. And Trump is like the one little guy in front of Chinese tank. People don’t understand how big the Chinese tank is. They’re seeing it now with their own eyes with the riots, the media hiding the riots, what’s going on with what the democratic machine did Bernie Sanders twice? You know, I mean, I can’t believe people on the left are so out of touch. Because the truth is, it’s not left versus right. It’s insider with power, versus outsiders with bags over their heads. And Trump is the massive threat, because he’s pulling bags off of heads. And we don’t have a lot of time to wake up. So when you see book burning, clothed as we want to educate you on race, it’s very, very dangerous. I mean, if you play the race card a million times to get power, you’re just hurting the ratio you’re allegedly protecting.

Jason Hartman 21:30
Yeah, I know. But that’s what you know, that’s what the left has done for decades. I mean, everything they do,

Michael Daugherty 21:38
is being burned and police being told to go away. I mean, this is beyond comprehension. beyond comprehension, I mean, coming for a law enforcement family to see a mayor ignore and let them run and go and destroy things. Look what’s going on Seattle and Los Angeles. It is. It’s insane. You know, it’s insane.

Jason Hartman 22:00
Yeah, it really is. It’s unbelievable. But the one thing that is for sure, is that businesses will never, in any significant way, come back to those neighborhoods. And that will be the thing. That’s the one thing the government can’t do. They can’t force a business to open their Yes, they will incentivize it through opportunity zones, etc. And you know, that’s a whole nother scam. We could talk about another day, but long before the riots and COVID, obviously, all of these areas will just become more and more impoverished, it’ll just get worse and worse, they’ll become more dependent on government. It’s absolutely shocking.

Michael Daugherty 22:38
Well, I come from Detroit. And what we have now that we didn’t have back then is we have history. Back then it was like, you know, Obama running I know, record. There was no record. There’s a record of devastation of what happens with from after Baltimore, with Ferguson and how that all blew out versus Detroit. They’re gonna annihilate it, and it won’t come back. You can burn a house down in three seconds. You can’t build it back as quick.

Jason Hartman 23:02
Well, so what does that mean? Can you just elaborate on that before we wrap it up? What do you mean, we understand you can destroy things faster than you can build it. But before that, you were making up Detroit, Ferguson, etc.

Michael Daugherty 23:13
Well, Detroit? I mean, I grew up in Detroit. I was a kid during the riots. I mean, Detroit was what people don’t know is Detroit, one day was bigger than Chicago. It wasn’t number one,

Jason Hartman 23:22
It was one of the flagship cities of the world. I mean,

Michael Daugherty 23:25
Unbelievable education. Phenomenal education is that when I was a kid, and then when the riots happened, we moved out to the middle of nowhere, and I was a year ahead of everybody. And people don’t know that now. You say Detroit, kids that were born from 1970 and later in the Detroit area, don’t know how to get around Detroit because you’re not allowed to go. And so people you know, and that’s their that is an example that wasn’t there. In the 60s, when they torched Detroit, it’s a massive cut your nose off to spite your face. If we don’t learn we only learn from us or if we want to fully democratic ton of corruption along the way, one of the mayor’s is in jail still. And you know, this is incredible. He might been on probation now, but the nonstop fleecing and corruption of the black community by black leadership in the black community, the exploitation is because this is a human condition, not a racial condition. Whenever you hand over everyone else flees. This is why you see the small black business owner yelling at people when the blacks are destroying their business. I mean, they know they’ve lived through it. They know that they’re so vulnerable, so nothing breaks your house more when their own race destroys themselves. And this is cutting their nose up to spite the face.

Jason Hartman 24:46
Yeah. And terrible, sad story. It really is. You know, the thing we’ve got to all realize is that everybody’s got an agenda. Sometimes the agenda syncs with a good outcome. Mostly, it doesn’t And you know, there are people like Al Sharpton, for example, who are just, they’re just profiting from other people’s misery.

Michael Daugherty 25:09
Beyond comprehension. But what’s terrifying is the people that give him platform. That’s the scary part. I mean, the number of people that give that corrupt man platform that just shows the desperation for true leadership within the black community. It’s terrifying. It’s really sad.

Jason Hartman 25:27
It seems as though one of the first issues that would seem sort of obvious. I don’t know, maybe I’m maybe this is not that I think this, but it seems like we should stop counting the races. Like, why are we you know, if the government’s supposed to be colorblind? Why does it count everybody? And, you know, we talk about this group and that group, let’s stop talking about it and just be people. It’s the brotherhood of man. I mean, what

Michael Daugherty 25:53
No. Divide and conquer it works. Nancy Pelosi, Schumer, Biden, the Obama, they’re masters, they’re masters, it works. They know the public has no memory. The masses of people will be cowards. The masses of people will believe it. The masses of people don’t feel educated enough or know what to do. So they cower, fear works, doubt works, dividing them works, making you dependent works. And it’s coming to a head right now because completely out of control. I mean, it’s so off the rails, even they can’t say, defund the police. But this works for them. I mean, Nancy Pelosi shows up with whatever garb around her neck. I mean, as long as those people keep voting for those people, you report yourself.

Jason Hartman 26:41
I know. But you know, the question is, when will it change? I mean, downtown Seattle might be the new Detroit, or much worse

Michael Daugherty 26:47
and look at how many of those idiots are entitled white cat.

Jason Hartman 26:52
Of course they are I mean, that that whole, the whole government free zone that they have the new country they’ve set up will collapse as soon as they realize they can’t get their lattes. They don’t know where to charge their iPhones, you know, they can’t get a good vegetarian meal or vegan meal.

Michael Daugherty 27:10
Handing everyone weapons that will be for another,

Jason Hartman 27:13
Yeah, it really is. Give out your website,

Michael Daugherty 27:16
the devil inside the beltway.com is easier to remember than my name.

Jason Hartman 27:20
Alright, Michael, thanks for joining us.

Michael Daugherty 27:22
It was great talking to you. Thank you.

Jason Hartman 27:28
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