I was in a FSDO some years ago, on business. I happened to overhear a conversation by an inspector, whom I knew, who was seated in a nearby cubicle. The inspector was on the phone, discussing a matter that came across his desk, involving a private pilot who flew a friend to another location. The private pilot had apparently accepted slightly more than the pro rata share of the expenses (friend paid for all the fuel).
"I don't just want to make an example of this guy. I want to rip his beating heart out of his chest and hold it up, dripping, for all the world to see. I want to make an example of this guy. By the time I get done with him, I want him to wish he was never born."
Some have told me that I should have recorded those comments. Perhaps. A matter of public record or not, that was a civil servant far overreaching his mandate, with far too much vitriol. I knew of another case where the same inspector (a former instructor pilot at a local Guard aviation unit) had caused a private pilot friend of mine to cry, over a similar issue. The friend had been asked to speak in his church, and the inspector happened to be visiting that church that day. The young man used his private flying in his talk, and mentioned taking a friend flying.
The inspector met him in the foyer on the way out of the church, and said "I heard what you said in there, and I'm going to get you. I'm going to take away your pilot certificate, and by the time I'm done with you, I will have ruined your life." The kid was in tears when he recounted the experience.
I had a similar experience with the same inspector a few years later on a different issue, and on parting, the inspector said "You're technically right, and on appeal, you'll get your pilot certificate back. You'll win, but in the meantime, I'll make your life a living hell, and I may just do it for spite."
Is there a reason to be careful what's said to the inspector at the FSDO level? I appreciate the naive notion that the guilty need not fear, but that is decidedly NOT the case with the FAA. You NEED to know that under administrative law in dealing with FAA regulation, you are GUILTY until proven innocent, not the other way around. You are issued the violation, and later you get to appeal the matter at your expense, to try to prove your innocence.
Work the matter through an attorney. Far better not to violate the regulation in the first place, but even an administrative action such as a warning letter can affect you for a LONG time in your career, especially if your goal involves the airlines. At a minimum it stays in the record for two years, but employers far down the line will ask if you've ever been investigated for a violation, or received a warning.
When the FAA asks for your side of the story, the FAA can and will use anything you say against you; it's not necessary to issue the violation, but it will be used against you when you appeal. When the FAA inspector smiles and says "we just want to hear side of things," you need to know that what's really being said is "we are providing you with an opportunity to provide evidence to be used against you." To think otherwise is to think quite naively. Don't make that mistake.