Trump's Elon Musk Appointment Raises Questions About Conflicts of Interest

Elon Musk's role in President-elect Donald Trump's efforts to downsize the federal government could expose "enormous and multiple conflicts of interest," a public policy expert has told Newsweek.

Trump announced on Monday that the billionaire founder of Tesla and SpaceX would lead what he called the "Department of Government Efficiency," along with entrepreneur Vivek Ramaswamy, to "dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies."

No such department exists and the president-elect didn't offer many details about how it would operate or how it would be staffed, if at all. Trump's statement said DOGE "will provide advice and guidance from outside of Government, and will partner with the White House and Office of Management & Budget."

The DOGE acronym is an intentional nod to the popular cryptocurrency Dogecoin, that originated as a joke internet meme in 2013, but has since grown into a widely recognized digital asset. Musk is a fan.

Elon Musk speaks before Republican presidential nominee former President Donald Trump at a campaign rally at Madison Square Garden, on October 27, 2024, in New York. A professor had told Newsweek that Musk's appointment to... Evan Vucci/AP

"[DOGE] will be a Federal Advisory Committee" instead of an actual department, University of Michigan public policy professor Donald Moynihan told Newsweek.

Also not addressed in Trump's statement is the fact that Musk's companies are the recipients of government contracts and subsidies.

"Both of those things are fine until Musk is given charge of government, and gets to make recommendations about which agencies should have reduced budgets, or which officials should be fired," said Moynihan.

"Musk has enormous and multiple conflicts of interest that should prohibit him from working in the Trump administration," he added.

"It becomes impossible to maintain the claim that the government will not now favor Musk when he has power over their agencies."

Moynihan went to on to say that Musk's involvement in the federal government "creates the appearance of corruption, and increases the chances that such corruption will take place. It increases the risk that policy will be made and implemented to satisfy the desires of the richest man in the world rather than the American public."

Following Trump's announcement, Musk said that "[a]ll actions of the Department of Government Efficiency will be posted online for maximum transparency."

Newsweek has contacted the press offices of Tesla and SpaceX via email for comment and Trump's spokesperson.

How Musk Has Benefited from Federal Contracts and Subsidies

Tesla

The U.S. government's zero-emission vehicle credit system requires auto manufacturers to produce a certain number of zero-emission vehicles based on the total number of cars sold in that state, according to CNBC.

It was reported that Tesla had accumulated $9 billion by February 2024, according to Bloomberg, by selling those credits to other auto manufacturers that failed to meet emission standards.

Tesla has also received various tax breaks and incentives to support its operations, for example Tesla Gigafactory in Nevada was given $330 million in tax breaks on the basis it invested $3.6 billion over 10 years in the Gigafactory expansion, the Reno Gazette-Journal reported.

The tax breaks were approved by the Nevada Governor's Office of Economic Development, and previously in 2014, Tesla was also awarded $1.3 billion in incentives, the outlet added.

SpaceX

Musk's SpaceX company has also secured a number of major contracts with NASA, including a $2.89 billion agreement in April 2021 to develop a human lander that could safely carry the next two American astronauts to the lunar surface.

The company has also been awarded contracts by the Department of Defense Contracts along with other organizations to provide launch services for the U.S. Space Force.

It was announced on June 13 that SpaceX, Blue Origin and United Launch Alliance (ULA) would receive contracts worth up to $5.6 billion across the fiscal years between 2025 and 2029.

In December 2020, the Federal Communications Commission (FCC) also awarded SpaceX nearly $900 million in subsidies to expand its Starlink satellite internet service to rural areas. However, this was later rejected by FCC in 2023 based on "the applicant's failure to meet the program requirements."

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