Elon Musk sidesteps conflicts of interest as he begins to benefit from Trump-driven cuts

One of the tasks ahead for Elon Musk is to review Pentagon spending. This Tuesday, in his unusual appearance in the White House Oval Office with his son X Æ A-XII alongside Donald Trump, he was asked if that didn't pose a conflict of interest, given the multibillion-dollar contracts SpaceX has with the Defense Department. "First of all, I'm not the one submitting the contract, you know, it's SpaceX people, or something like that, submitting the contract," the billionaire, founder, top boss and major shareholder of SpaceX, was dispatched. Musk sidesteps conflicts of interest and transparency with his status as a special employee of the Republican administration as he begins to benefit from measures pushed by himself, such as means cuts to regulators and overseers, all with the approval of the president, Donald Trump.

Elon Musk's case is unprecedented. The richest man in the world, with an empire of companies with conflicts and contracts with federal agencies, has assumed enormous power to carry out a "drastic reform" of the Administration in which Trump has given him broad powers. At root, that puts him in a position to favor his priorities. Is it a waste to allocate tens of millions of dollars to save millions of lives in Africa, but not to allocate billions to space programs with which to see closer his daydream of creating a human civilization on Mars?

Musk is the master of the scissors and has decided, for example, to dismantle the Consumer Financial Protection Bureau (CFPB), which he considers a useless agency. That agency is dedicated to combating abuses by large companies against citizens and dozens of complaints have been filed before it against Tesla, the electric car manufacturer of which he is also head and major shareholder, regarding the financing of its vehicles. "CFPB RIP," Musk tweeted. Dead the dog, gone is the rabies. Tesla won't have to worry much about those allegations anymore. Moreover, it is up to the CFPB to strictly supervise companies that want to enter the payment media business, as X, its social network, wants to do. Clear path.

The owner of Tesla made no secret during the campaign that he wanted his companies to benefit from his deregulatory offensive. For example, he told analysts that he wanted to benefit himself by creating a simpler path for federal approval of autonomous vehicles instead of the complicated state regulations that exist now. Similarly, it will be able to provide itself with a more favorable regulatory framework for rocket launches (SpaceX), artificial intelligence (xAI) and computer implants for the brain (Neuralink).

Under investigation

In several of his ventures, Musk has been subject to scrutiny by overseers. For example, its autonomous driving system is under the magnifying glass of the National Highway Traffic Safety Administration's (NHTSA) Office of Defects Investigation, which has identified four cases in which a Tesla vehicle was involved in an accident after entering a reduced visibility area of the roadway. In parallel, the Department of Justice and the Securities and Exchange Commission (SEC) are investigating whether Musk and Tesla have overstated the autonomous driving capabilities of their cars. The DOJ is also investigating whether Tesla misled customers about how far its electric vehicles can travel before needing a recharge.

SpaceX launches have also been investigated by the Federal Aviation Authority (FAA). Already on the campaign trail, Musk was saying that it was necessary to end so much regulation: "Unless there is a conscious effort to deregulate and have sensible regulation, Mars will be impossible. We will be forever confined to Earth," he said at a rally in Pennsylvania.

In Joe Biden's last week in office, the FAA temporarily halted launches of Space X's Starship spacecraft after opening an investigation into an explosion of the device that forced commercial flights to be diverted and sent debris raining toward Caribbean islands. The head of the FAA resigned after Trump took office.

Like-minded appointments

The president has been appointing prominent Musk allies to prominent Administration posts, including amateur astronaut Jared Isaacman to director of NASA, the main customer of his company SpaceX. David Sacks, "cryptocurrency and artificial intelligence czar," a proponent of lax regulation, is another old acquaintance of the tycoon. Both are part of what is known as the "PayPal mafia", as they were co-founders of that payment company.

In addition, the Securities and Exchange Commission (SEC) also sued him just before Trump's arrival to power for skirting the law and misleading investors in the purchase of Twitter, with an estimated illicit profit of more than 150 million dollars, an investigation opened in 2022. Musk was defiant about it and the then SEC chairman, Gary Gensler, already resigned, will be replaced by Paul Atkins, chosen by Trump for the post. The billionaire's firm Neuralink is also under investigation by the SEC, as acknowledged by his lawyer.

Musk's companies, in addition, accumulate complaints for alleged discriminatory and abusive practices before the Department of Labor. Young engineers on the Department of Government Efficiency (DOGE) team have had access to their systems. Unions complained that confidential information about investigations into Musk's companies and competitor trade secrets are contained there. Trump has fired several members of the National Labor Relations Board, crippling its ability to impose sanctions.

Many of those investigations may end in nothing with Trump in power and Musk as his chief ally. Meanwhile, the billionaire continues to make all sorts of decisions on matters that affect him directly or indirectly. When asked at the White House on Tuesday about conflicts of interest, he replied, "All of our actions are totally public, so if you see something like, 'Elon, there might be a conflict there,' it's not like people are going to be shy about it. They're going to say it immediately." In reality, much of the DOGE's actions are opaque, even as both Musk and the agency itself go about tweeting without much context some of its snippets, sometimes spreading misinformation or falsehoods.

Trump himself was also asked about it, with Musk in front: "He's a successful guy, that's why we want him to do this. We don't want an unsuccessful guy to do it," he first argued, only to later assure that if he saw any conflict or any problems, he would not let him meddle. In reality, as with the CFPB, the president seems to be looking the other way.