Elon Musk’s influence over the federal government is extraordinary, and it brings him enormous profits.
Musk’s rocket company SpaceX effectively controls NASA’s rocket launch schedule. The Pentagon relies on him to put most of its satellites into orbit. His company was promised $3 billion last year in about 100 different contracts with 17 federal agencies.
There are many interactions with federal regulators, which can be hostile. His company has been the subject of at least 20 recent investigations and reviews, including over the safety of Tesla cars and the environmental damage caused by rockets.
Given Musk’s huge business footprint, he will be a major player no matter who wins the election.
But he threw his fortune and power behind former President Donald J. Trump, who in return appointed him chairman of a new Government Efficiency Commission with the power to recommend widespread cuts to the federal government. He vowed to appoint Musk to the Changes in Government Agencies and Federal Regulations.
It would essentially give the world’s richest man and a major government contractor the power to regulate any regulator that has influence over his company, potentially amounting to a huge conflict of interest. It will be.
The New York Times reviewed court filings, regulatory filings, and government contract data to uncover Musk’s extensive business agreements with the federal government, as well as violations, fines, consent decrees, and violations committed by federal agencies. Other survey details are summarized. ordered his company. Together they show a deep web of relationships. Instead of assuming this new role as a neutral observer, Mr. Musk will pass judgment on his own customers and regulators.
Musk is already discussing how he will use his new role to help his company.
He questioned rules that require SpaceX to obtain a permit if it releases large amounts of potentially contaminated water from its Texas launch pad. He also said limiting this kind of surveillance could help SpaceX reach Mars faster — “unless it’s hidden by bureaucracy,” he said on his social media platform X. I wrote this. “The Ministry of Government Efficiency is the only way to extend life beyond Earth.”
Earlier this month, he attacked the Federal Communications Commission, which oversees Internet satellites launched by SpaceX. He said that if the commission had not “unlawfully rescinded” more than $886 million worth of federal funds the company was trying to provide rural internet access, satellite kits would have been “unlawful” in North Carolina after the hurricane. It probably would have saved lives.” Desolate areas of the state.
A spokeswoman for the commission said it did not award funding because the company proposed serving some areas that are not actually rural, such as Newark Liberty International Airport.
Musk and SpaceX did not respond to requests for comment for this article. Trump’s press secretary, Brian Hughes, declined to directly answer questions about potential conflicts of interest if Musk were to take on this new role.
“Elon Musk is a genius and an innovator who literally made history by building creative, modern and efficient systems,” Hughes said in a statement.
Regardless of who is elected president, Mr. Musk’s deep ties to the U.S. government are unlikely to change anytime soon, with government agencies increasingly dependent on the vehicles, rockets, internet and other services provided by his company. are.
His offerings to the U.S. government are wide-ranging, according to federal contract data.
Musk came up with the idea for the efficiency committee. During an interview with Trump on X in August, Musk brought up the topic three times, returning to it when Trump wandered off to other topics.
“I think it would be great to have a government efficiency commission that would look at these things and make sure that taxpayers’ money, their hard-earned money, is spent in a good way,” Musk said. said. Third time. “We will be happy to cooperate with such requests.”
Trump ultimately responded, “I would love to do that.” “Well, you’re the best cutter.”
Maya McGuineas, chair of the bipartisan Committee for a Responsible Federal Budget, praised the idea of an efficiency commission and said Musk’s business experience could prepare him well to lead an efficiency commission. Ta.
He said Musk’s formal powers would likely be limited. Presidents dating back to Theodore Roosevelt have sought to use committees of business-minded outsiders to rethink government. For their ideas to become law, Congress must agree. That’s usually not the case, she said.
But Musk’s proposal could still harm the agency if it singles out Trump as an example of wasteful spending or misgovernment.
Legal experts who have studied federal ethics rules and the use of outside corporate executives as government advisers say that Musk’s interactions with the federal government are so extensive that he has not been able to use them as a prominent adviser to the president without creating major conflict. He said that it may be impossible to serve as the Interesting.
Kathleen Clark, an ethics lawyer who consulted the District of Columbia’s attorney general’s office, said Musk “has had some very controversial interactions and interactions with regulators.” “It’s perfectly reasonable to believe that what he brings to this federal audit is his own set of biases, grudges, and financial interests.”
Mr. Musk and his companies often question federal regulations, especially when they threaten to delay plans to further expand their businesses.
One example of this was this month’s test launch of SpaceX’s newest rocket, Starship. NASA has agreed to pay the company up to $4.4 billion to bring astronauts to the moon’s surface on two future missions. However, the date will depend on when all equipment will be ready. So far, the Starship has no people on board.
But the Federal Aviation Administration delayed this latest test launch for several weeks, in part because of questions about the harm SpaceX caused to wildlife near its Texas launch site, a delay that infuriated Mr. Musk.
“We continue to be stuck with the reality that the government paperwork to obtain permission to launch a rocket takes longer than the actual design and manufacture of the hardware,” SpaceX said in a statement.
Last month, the FAA began the process of fining SpaceX $633,009 for ignoring licensing requirements related to two launches in Florida last year that may have compromised safety, the agency announced. did.
This is a change for the FAA, which previously did not impose fines when SpaceX ignored direct FAA orders. “There are serious consequences when companies fail to comply with safety requirements,” Mark Nichols, the FAA’s chief legal counsel, said in a statement last month.
“SpaceX plans to sue the FAA for overregulation,” Musk responded on his social media site. The company also sent a four-page letter to Congress complaining that the FAA “has failed to modernize and streamline regulations.”
The list of conflicts with Musk’s company extends to many other federal agencies.
Musk has particularly attacked the Securities and Exchange Commission in recent years, which in 2018 charged him with securities fraud over a series of false and misleading tweets related to taking Tesla private. did. Musk posted on Twitter that he plans to take the company private for $420 per share and that he has “funding in place” for the transaction. As part of a subsequent settlement with the SEC, he resigned as Tesla’s chairman and Tesla paid a $20 million fine.
In a 2022 TED Talk, Musk lambasted regulators as “bastards.”
Even before he took on a formal role in the federal government, Musk has repeatedly called for broader efforts to break or weaken federal regulations and cut federal spending. “If Trump wins, we have a once-in-a-lifetime opportunity to deregulate and reduce the size of government,” Musk said at a conference in Los Angeles last month.
If Musk obtains a senior advisory role in the Trump administration, regulators could take action against one of Musk’s companies, even if he did not directly push for the support of those agencies. may need to consider how this will affect budgets and regulators. Mr. Clark said.
The federal government has regulations aimed at preventing such disputes. There are 1,019 advisory committees with more than 60,000 members who consult on everything from how pesticides are used on farms to how America’s wild horses are managed. But compared to the government-wide “efficiency” review led by Musk, each of these committees has a very narrow jurisdiction.
Another criminal law states that federal employees and outside advisors who are considered “special public servants” are prohibited from “personally and materially becoming involved in certain matters affecting your financial interests, as well as your spouse, your adult children, your general partner, and any organization in which you serve as a director.”
But that didn’t prevent problems, even with outside advisers who often have portfolios far less complex than Mr. Musk’s. Various studies have shown that the Food and Drug Administration’s pharmaceutical industry advisors often make recommendations that benefit their own corporate interests, similar to how military contractors rely on them to advise the Department of Defense. It seems so.
Mr. Musk has hinted that he wants to make government more efficient. That would mean canceling NASA’s Starliner contract with Boeing, its main industry competitor.
“The world doesn’t need another capsule,” he wrote, referring to Boeing’s system that ran into trouble on its first manned test flight earlier this year and returned empty this month after a long delay. (No word on whether the proposed efficiency commission would take this up.)
Mr. Trump has previously faced accusations that he sowed friction when he named certain business executives as advisers.
That includes the appointment in 2017 of billionaire investor Carl Icahn as special adviser on regulatory issues, and Mr. This was despite lobbying federal regulators to change the rules to allow for savings. of dollars. Icahn was forced to resign from his unpaid position just months after his appointment following widespread criticism of the arrangement.
Richard Briffault, a Columbia University law professor who chaired the New York City Conflicts of Interest Commission, said there may be benefits to having Mr. Musk as Mr. Trump’s official adviser. There needs to be some disclosure about the advice he was giving.
“Instead of Elon Musk calling the White House and saying, ‘Hey, this government agency is being tough on me,’ get this out in the open. Get them to back off. “Is that even worse?” Mr. Brifau said. “That’s an open question.”
methodology
The New York Times analyzed deal-level contract and grant data from usaspending.gov from fiscal years 2013 to 2023 to calculate the total amount owed by funding agencies to the company founded by Elon Musk. The Times consulted experts at the federal research and advisory firm Pulse and the Center for Strategic and International Studies think tank in Washington to examine the methodology.
Kitty Bennett contributed to the research.
