As Donald Trump and tech billionaire Elon Musk work zealously to slash tens of billions in federal spending by axing thousands of jobs and gutting some government agencies, Musk faces mounting claims he has conflicts of interest and no oversight, legal and ethics experts say.
Trump’s largest campaign donor and the world’s wealthiest man, Musk was tapped by the president to lead the so-called “department of government efficiency” (Doge) in a radical and opaque cost-cutting drive that allows him to keep control of SpaceX, Tesla and other huge companies with billions of dollars in federal contracts.
Critics note that Doge, which Musk touted broadly to Trump in August as he was writing seven figure checks to help him win, is gutting agencies like the Consumer Financial Protection Bureau (CFPB), which has investigated complaints about the car company’s debt collection and loan policies.
Meanwhile, Tesla, SpaceX and other Musk businesses have been investigated or fined by about a dozen regulatory agencies including the CFPB, the Securities and Exchange Commission and the Federal Aviation Administration, which suggest how Doge’s work at these agencies and others could benefit Musk financially, say critics.
Both Trump and Musk have downplayed critics’ concerns about conflict of interest issues for the Doge leader, with Musk simply asserting if there’s a conflict: “I’ll recuse myself.”
For his part, Trump has moved broadly to rein in independent oversight by firing key ethics and corruption watchdogs, including the head of the office of government ethics (OGE), and at least 18 agency watchdogs known as inspectors general who have long monitored waste, fraud and abuse in spending.
Legal experts express alarm about Musk’s conflicts and lack of oversight.
“The Office of Government Ethics is needed to enforce compliance, but Trump abruptly fired the office’s director,” said Kedric Payne, the senior director of ethics at the nonpartisan Campaign legal Center. “The OGE needs a director committed to the agency’s mission to help restore public confidence that Doge is not involved in corrupt activities to benefit Musk.”
“Ethics compliance for government employees like Musk usually requires ethics lawyers providing advice and pre-approval of any actions taken that involve the employee’s financial interests,” Payne added. “It is a red flag that the White House has not said that any ethics professionals are involved in reviewing Musk’s actions.
“More transparency and accountability are needed. Voters have a right to know that government employees are serving the public interest and not their own personal interest.”
Payne’s points are underscored by the potential financial gains for Musk’s businesses as he leads Doge. SpaceX, Tesla and other Musk companies, for instance, have won at least $18bn in federal contracts from Nasa, the defense department and other agencies during the last decade. Overall, six Musk companies have been investigated or fined 32 times by 11 agencies, according to the New York Times, raising more red flags about potential conflicts involving Musk’s businesses and Doge.
“Musk is now a federal officer subject to the criminal conflict of interest statute, 18 USC 208,” said Richard Painter, George W Bush’s ethics counsel who now teaches law at the University of Minnesota. “He cannot own stock in Tesla which offers car loans and at the same time participate in dismantling the CFPB. Also he cannot have X [formerly Twitter] go into consumer finance and at the same time participate in dismantling the CFPB.”
Likewise, given Musk’s artificial intelligence business xAI, Painter stressed: “AI will have a big role in making the government more efficient, However, federal officers working for Doge cannot legally have an equity stake in an xAI company that will very likely make money from the government shifting toward AI.”
Meanwhile, Democratic state attorneys general have mounted legal challenges to Doge’s extensive agency operations and its efforts to obtain vast amounts of sensitive private data.
A lawsuit by 19 Democratic attorneys general to block Doge from accessing US treasury systems with millions of private documents about social security and tax payments won a victory on 20 February, when a New York judge upheld another court’s temporary restraining order.
Last weekend, Musk ignited a political firestorm that brought opposition from key cabinet officials at state and the FBI, when he sent an email to some two million federal employees demanding they explain what they had accomplished in the previous week by late Monday.
Musk warned darkly on his social media platform X: “failure to respond would be taken as a resignation”, which sparked more chaos and criticism. Later, the office of personnel management indicated that employees didn’t have to comply with Musk’s dictum, but with Trump’s backing, he reiterated his demands.
Other concerns about Musk’s work have been prompted by Doge claims of identifying $55bn in wasteful federal spending, a large chunk of which has been wildly exaggerated. Exhibit A: one Doge document boasted of cutting an $8bn program that turned out to be closer to $8m, according to multiple news reports.
Musk’s cost cutting modus operandi seems to be generating public dismay, according to new polls. One Washington Post-Ipsos poll showed that Americans disapprove (52 to 26) of Musk “shutting down federal government programs that he decides are unnecessary”.
Perhaps in response, Musk and the Trump administration have recently offered conflicting statements about Musk’s exact role with Doge that seem aimed at masking his unprecedented clout. One White House official in a sworn statement this month responding to a lawsuit against Doge, referred to Musk as just another “employee” with no decision making authority.
But Musk’s enormous sway with Trump was palpable when the mogul attended and spoke at length at the first cabinet meeting on Wednesday where both he and Trump talked up their far reaching cost cutting mission; Wearing a modest “tech support” tee shirt, Musk said deferentially that “I do what the President asks.”
Earlier in a bizarre joint interview with Sean Hannity, of Fox News, on 17 February, Trump and Musk offered mutual admiration, while belittling concerns of conflicts of interest or the need for independent ethics oversight.
When Hannity asked Trump how he would react if he saw a conflict for Musk, Trump said simply: “He wouldn’t be involved.” In turn, Musk blithely claimed if there are conflicts: “I’ll recuse myself. I mean, I haven’t asked the president for anything, ever.”
At another well choreographed event on 11 February, Musk popped up in the Oval Office with Trump nearby to boast with scant details that Doge is doing what “the people want”, with broad brush claims of cutting wasteful spending; Musk has also faced fire for making unproven and glib allegations that he’s cutting “corruption”.
Despite their cavalier attitude about the need for transparency, experts say Musk’s myriad business ties while leading Doge merit strong oversight.
“The power and influence Musk is exercising over government agencies and operations while his companies have billions of dollars in government contracts and have been subject to government regulation, financial penalties and oversight presents wide-ranging and dangerous conflicts of interest,” said former Federal Election Commission general counsel, Larry Noble, who now teaches law at American University.
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Noble stressed Musk has only indicated “that he would recuse himself if he saw a conflict and Trump said he doesn’t want Musk involved in conflicts of interest.
“Given that Trump, who recently suggested he’s a king, has decimated the ethics oversight function of the government by firing inspectors general as well as the director of the office of government ethics, and Musk has been less than transparent about what he’s doing, no one who truly cares about waste, fraud and abuse should be comforted by these hollow assurances.”
Similarly, Craig Holman, an ethics expert and lobbyist with Public Citizen, stressed that six Musk companies “have been under 32 investigations by 11 governmental agencies”.
“These are the same agencies, and the same investigators, that Musk is in the process of terminating. The Federal Aviation Administration, which has fined SpaceX on numerous occasions for safety violations, is facing severe cutbacks championed by Musk,” he said.
Holman added that “the SEC is seeking $150m from Musk companies for securities violations, and is now being neutered by Musk. The National Labor Relations Board is investigating labor conditions at Musk companies, and it is now being dismantled under Musk. The CFPB has been investigating safety violations with Tesla cars and that agency is now on the chopping block.”
Payne voiced other concerns about Musk’s freewheeling Doge operation given his official role as a “special government employee”.
“Criminal law prohibits special government employees from making government decisions where they have financial conflicts of interest,” Payne said.
“Musk’s decisions may violate criminal law when they involve agencies that regulate or contract with his companies, [including] agencies such as the FAA, CFPB, EPA and defense department.”
Payne noted too that “Musk’s conflicts of interest include the potential use of his AI company to support Doge’s review of sensitive government data. The problem is that he may personally benefit if he uses government information unavailable to competitors to train his AI system. He can also become the federal government’s primary AI service provider, leading to lucrative government contracts.”
Likewise, Senator Elizabeth Warren of Massachusetts and a few other senators plus Representative Jamie Raskin of Maryland wrote to Musk on 13 February calling for public disclosure of a confidential disclosure form that Musk was required to submit as a special government employee.
The letter charged Musk was exploiting a loophole in ethics law to avoid disclosing his financial interests. The White House has said Musk will file a confidential financial disclosure report given that he is serving as an unpaid special government employee (SGE).
But the letter stressed that “Given the scale of your power to carry out sweeping administrative policies and your vast personal financial interests, the American people deserve to know how you stand to profit from your role in the Trump Administration.”
On Tuesday, the White House indicated that a former US digital service official named Amy Gleason was Doge’s acting administrator, but just last week, Trump at a Miami financial conference declared that he had “put a man named Elon Musk in charge” of Doge.
Notably, Doge’s genesis seems to have come in a two-hour streamed interview that Trump did with Musk on X last August where Musk suggested a similar notion to Doge. Trump quickly voiced strong interest in the tech mogul’s idea as he was starting to donate a record $288m to boost Trump’s campaign.
“I need an Elon Musk – I need somebody that has a lot of strength and courage and smarts,” Trump said during their talk on X.
The next month, Trump spoke about the need for a new efficiency commission in a speech to the Economic Club of New York, prompting Musk to write on X: “I look forward to serving America if the opportunity arises. No pay, no title, no recognition is needed.”
But the recognition Musk is now receiving has become much more critical, with calls mounting for tough oversight of his conflicts and serious questions about Doge’s operations.
Matt Platkin, New Jersey’s Democratic attorney general, who has joined a few of the state AG lawsuits targeting Musk and Doge actions, said that he thinks Musk’s “conflicts are astounding and deeply concerning, and the disregard for the rule of law should scare every American.”
