In the days following the U.S. Civil War in late 1865, a group of unethical people from the victorious North swooped into the chaos of the destroyed society of the defeated South to seek profit. They bought low, sold high, and defrauded whole communities that couldn’t defend themselves. They were called “carpetbaggers.”
The same phenomenon could be said to have occurred in the years following the dissolution of the Soviet Union, from the 1990s into the 21st century. Amidst the economic, legal and governmental chaos in eastern and central European nations that were attempting to create new societies, some Americans swooped into former Warsaw Pact states in Central Europe, controlled by the Soviet Union, like 20th-century carpetbaggers, preaching that they had “influence” in the United States and the west and selling their influence, which was worth no more than snake oil. But it took the victims a while to realize it.
“Drain the swamp” is a Donald Trump rallying cry. It refers to Beltway lobbyists and consultants selling influence in Washington to U.S. companies, often at the expense of the public interest.
But this phenomenon, of course, is not limited to U.S. companies. Indeed, the same influence industry may be more alive and thriving in foreign capitals where it can be more difficult to discern the difference between credible and honest individuals with substantive expertise and connections to policymakers and regulators versus snake-oil influence peddlers. They can still be found in foreign capitals around the world, including in Central European countries, from Kiev to Budapest to Prague to Bucharest.
There are at least three “tells” that give away consultants who perpetrate the Swamp Con.
The first is the “Résumé Con.” Picture the D.C. “consultant” who flashes an impressive business card with an address on K Street address, the famous lobbyist corridor in D.C. The consultant’s name will often have a title indicating the person is a former official in, say, the Energy Department or Department of Defense. The consultant will often talk of connections to important people in D.C.
Avoiding this con can frequently be accomplished through Google. In some cases, when you look for the website of this consultant or “company,” you may find there is none there. Or none in existence for some time. Then when you will for the office listed, there may be no office at all. Or someone else’s office that has never heard of the company. Or, when you ask to meet the Washington D.C. “consultant” at his or her office, the consultant may insist instead on meeting in a hotel lobby or coffee shop. Look out if any or all of these are true. You may have a scam artist asking you for business.
The second tell is the “I can save you trouble” ploy. You will hear the self-described “well-connected” D.C. consultant speak darkly and vaguely of “troubles” your company may have in Washington but that he can “fix things” for you. If you hear this, not only don’t sign the consultant’s contract, but shut the door quickly. If you do sign such a contract, you have a right to ask the consultant, before you pay him after a period of time: “What have you exactly done to help our company?” If the consultant refuses to say or refuses to provide specifics that can be verified, don’t pay and kick him out or even go to the police — although you may now contract a legal headache (see below).
Does this sound familiar? It rings of the organized crime captain who approaches the shop owner and says, “You know, I would hate to see the police try to shut down your business. Pay me, and I’ll make sure they don’t bother you.” This is called extortion. In the D.C. Swamp Con, it is called a consulting fee.
Finally, there is the Litigation Con – inventing a baseless, frivolous lawsuit that will be filed against you, perhaps in some local state court. Doesn’t matter that you are a non-U.S. company in Europe. You have probably signed a contract handed to you by the “consultant” that allows you to be sued in the U.S. – and even in a local U.S. state court. Worse, a headline in local U.S. media that you have been sued by a U.S. company may not only get circulated in U.S. on the Internet, even if first posted on an obscure website. It could result in utterly false and distorted headlines, which gets picked up and repeated endless times on the Internet via Google, etc.
Once the company hires a good U.S. lawyer to call out the con and a good media firm to challenge the lies on the websites and demand they be taken down, the consultant may suddenly ask to mediate or settle for a lot of money. As everyone knows, protection money only begets more protection money. Fighting a meritless lawsuit may be the best path to driving the con artist back into the swamp.
Eventually, the U.S. government needs to police these fraudsters. America must be open for business and partnerships with good companies from around the world. If these snake-oil salesmen are allowed to prey on these companies from other countries, U.S. businesses will ultimately be hurt and deprived of innovative products and services.
Lanny Davis serves as an attorney and legal adviser to The Czechoslovak Group, a privately-held defense services company based in Prague, Czech Republic, which has experienced a similar experience as expressed above with a “consultant” with a representative in Prague and alleged offices and principals in Washington D.C. Davis previously served as President Bill Clinton’s White House Special Counsel from 1996 to 1998 and served on President George W. Bush’s five-member Privacy and Civil Liberties Oversight Board.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.