Musk’s conflicts of interest as Trump adviser could benefit him, experts warn

Elon Musk’s position as Donald Trump’s co-chair of an advisory panel tasked with proposing huge cuts in spending and regulations has sparked criticism from legal experts and watchdogs who warn of conflicts of interest that could benefit the tech billionaire and other Trump backers.

The fledgling panel has a sweeping mandate that Musk, the world’s richest man, proposed to Trump during the campaign as the tech mogul was pumping about $250m into a Pac to help Trump win the presidency.

Soon after he won, Trump announced the panel’s creation, and Musk revealed it has an eye-popping goal of slashing $2tn in federal spending, or about 30% of the annual budget, which watchdogs and analysts say is unlikely without axing popular programs that benefit the public.

The panel, dubbed the “department of government efficiency” (or Doge), is co-chaired by billionaire Vivek Ramaswamy and is just getting going, but critics are raising alarms about potential conflicts of interest posed by Musk businesses including SpaceX, Tesla and X.

Musk’s enterprises have billions of dollars in federal contracts with agencies such as the defense department and include some, like X and Tesla, that have been investigated and fined by the Securities and Exchange Commission.

In a Wall Street Journal op-ed last month, the co-chairs laid out some initial ideas about budget cuts to be made by July 2026: they wrote that their first goal is to find more than $500bn in spending that is “unauthorized by Congress or being used in ways that Congress never intended”.

As examples of possible cuts, Musk and Ramaswamy cited the Corporation for Public Broadcasting, which receives $535m a year, and Planned Parenthood and “progressive groups”, which receive about $300m annually.

Musk too has used his powerful X social media platform, where he has some 200 million followers, to tout goals such as ending the Consumer Financial Protection Bureau, a watchdog agency championed by the Democratic senator Elizabeth Warren and aimed at protecting the public from predatory lending.

On X, Musk last month wrote “delete CFPB”, calling it “duplicative”, after another Silicon Valley tech mogul, Marc Andreessen, complained in conspiratorial fashion that the CFPB was out to target Republicans and tech startups.

Critics say the panel’s proposed cuts could harm valuable programs in areas such as healthcare and climate change, while improving the bottom lines of Musk and other big Trump donors.

“The real danger here is that Trump is asking us to trust Musk’s advice and recommendations on how to slash the reach of government when Musk has billions of dollars in government contracts and he and his businesses are subject to important health, safety, and financial laws and regulations enforced by numerous federal agencies,” said Larry Noble, a former general counsel at the Federal Election Commission who teaches law at American University.

Other veteran watchdogs agree.

“Elon Musk is a walking conflict of interest,” said Craig Holman, a top lobbyist for the liberal Public Citizen watchdog group. “With a net worth of almost $475bn, ownership or investments in SpaceX, Tesla, X, cybersecurity and cryptocurrency, and billions of dollars in federal contracts supporting his business interests, any role he plays in cutting the federal budget and shaping government policies is very likely to have a direct and substantial impact on his bottom line.”

Holman stressed that appointing Musk to a federal advisory committee allows him to “sidestep many of the critical ethics requirements imposed on federal officials”.

Holman added: “The ethics rules for advisory committees are minimal,” meaning that Musk “will not be required to divest from any of his conflicting investments nor will any limits be imposed on his outside income”.

Musk’s net worth is now about $474bn, according to Bloomberg’s Billionaires Index, or about 77% higher than it was before Trump’s victory.

As concerns have mounted about conflicts of interest involving Musk and Doge’s operations, high-profile Democratic critics have joined the chorus.

Warren wrote to Trump via an email to his transition team on Monday asking for transparent and clear conflict-of-interest ethics rules that would be binding on Musk in his advisory role.

Further, the watchdog group State Democracy Defenders Fund, which was founded by Norm Eisen, an ethics adviser during Barack Obama’s presidency, is asking 16 federal agencies including the defense and justice departments to itemize their interactions with Doge and seeking other details about its operations.

In a Wednesday statement, Eisen said: “Musk’s mandate is immense – as are his potential conflicts of interest, which is why we’ve begun our inquiry.”

Trump, who at his election-night party lauded Musk by saying a “star is born”, has brushed off fears about Musk’s conflicts of interest by telling Time: “I think that Elon puts the country long before his company.”

Trump’s transition team has indicated it is watching potential ethical issues with Musk and the Doge panel. “The transition team will ensure the ‘department of government efficiency’ and those involved with it are compliant with all legal guidelines related to conflicts of interest,” Brian Hughes, a Trump-Vance transition spokesperson, has said.

To expand the advisory panel’s political clout, Musk and Ramaswamy this month met with key Republicans in Congress including the House speaker, Mike Johnson, who applauded their work and said that, with their help, he hopes to slash three-quarters of all federal agencies.

“We have the opportunity to go in and really take back control from the administrative state,” Johnson said in a Fox News interview.

Likewise, far-right representative Marjorie Taylor Greene was tapped to lead a House oversight subcommittee to act as a liaison with the Doge panel.

In a twist that could spur support for the panel’s proposals, Musk’s Pac has indicated it will help GOP members it likes and target ones it opposes in the 2026 elections.

“Elon and Vivek talked about having a naughty list and a nice list for members of Congress and senators and how we vote and how we’re spending the American people’s money,” Greene said, according to the Washington Post.

Not long after Trump’s victory, Musk also responded to a report that he might help fund challengers to GOP members who don’t back Trump’s nominees, writing on X: “How else? There is no other way.”

Musk on Wednesday displayed his new muscle with 12 hours of falsehood-riddled postings on X that Trump later amplified, to help kill a bipartisan House spending deal that Johnson had helped craft to avoid a government shutdown.

Veteran federal watchdogs foresee conflict-of-interest issues and other red flags given Musk’s sprawling business interests with federal contracts that are regulated by multiple agencies, which could lead to cuts harmful to the public, but benefiting Musk and other Trump donors.

“The idea that two tech billionaires who have never spent a day in government can do a thoughtful and informed job of making balanced judgments about government programs, regulations and entire agencies that affect the lives not only of hundreds of thousands of dedicated civil servants, but also the 330 million Americans they serve, is the type of fantasy nurtured by arrogant elites,” said the ex-justice department inspector general Michael Bromwich.

“It’s also hard to take seriously an efficiency effort that is paired, on the congressional side, with Marjorie Taylor Greene, who has never been considered a thoughtful legislator or an expert on government efficiency.”

Having stressed the importance of inspectors general, or IGs, for decades in ferreting out waste and inefficiency in government, Bromwich said: “Whether a Republican Congress bows to the Trump administration’s insistence on loyalty even with respect to IGs, who are by law supposed to be non-partisan, will be a further test of whether Congress will stand up for its own prerogatives.”

Similarly, Noble said: “Many of the people Trump has nominated to head up government agencies and programs or act as outside advisers, such as Elon Musk, have potential conflicts due to their business interests either involving the government or subject to government regulation. This is fertile ground for potential waste, abuse and fraud, making the role of truly independent watchdogs, like inspectors general, all the more critical.”

Other critics expect multiple conflicts ahead with Musk and the Doge panel.

“Musk is likely to seek further privatization of Nasa, which will directly benefit his company SpaceX,” predicted Holman. “He is likely to seek deregulation of an assortment of federal agencies that provide protection for the public such as the National Highway [Safety] Administration, the Securities and Exchange Commission and the [Environmental Protection Agency], all of which will further enrich Musk’s investments in Tesla, cybersecurity and cryptocurrency.”

Still, some progressives, including the independent senator Bernie Sanders, have voiced support for certain cuts that the panel is eying in defense spending.

When Musk saw that the Pentagon last month failed its seventh audit in a row, he wrote on X: “Sounds like a job for @DOGE!” Sanders, noting the Pentagon’s mammoth $886bn budget, wrote on X: “Elon Musk is right.”

But Sanders on Wednesday blasted “president Elon Musk” for his big role in blowing up the House spending deal.

Musk has also used X to single out some liberal political foes in key agency posts that he thinks should be canned. Just before the election, Musk wrote that the Federal Trade Commission chair, Lina Khan, who led an investigation into X’s privacy practices after Musk purchased the platform, “will be fired soon”.

Trump this month tapped another FTC member, Andrew Ferguson, to become chair.

Likewise, Musk has suggested on X that at least four federal employees who work on climate issues, including the representative Nancy Pelosi’s niece, a senior climate adviser at the Department of Housing and Urban Development, ought to lose their jobs.

Looking forward, some legal experts warn of serious potential problems with Musk’s advisory role.

“The conflicts of interest that Musk and Ramaswamy face are enormous,” said Kathleen Clark, a law professor at Washington University in St Louis and a specialist in government ethics. “Musk and his businesses depend on federal government contracts and are regulated by numerous federal agencies.”

“One can easily understand why someone like Musk would want to influence those contract awards and those agencies. But allowing Musk to interfere with contract awards or enforcement actions is the definition of a conflict of interest,” she added.

“If Trump facilitates this kind of interference by Musk and his cronies, then the United States will no longer have a ‘government of the people, by the people, for the people’, and instead will be a government of billionaires, by billionaires, for billionaires.”