President Trump and Elon Musk: A Conflict of Interest?
Introduction
Just a few weeks into President Trump’s new term, the business empire of Elon Musk, the world’s richest man, appears to be benefiting significantly from the administration’s policies and personnel changes. Musk, who has been granted considerable influence by Trump, is seeing federal agencies scaled back, top officials fired, and career employees pushed out—many of whom were involved in investigations, enforcement actions, or lawsuits targeting his companies. While none of these cases have been formally dropped yet, the shifts in agency leadership and priorities have raised concerns about the progress and outcomes of these pending investigations. This situation has led to questions about the role of conflicts of interest in Musk’s dual position as both a corporate executive and a government advisor. For now, it’s clear that Musk’s companies, including Tesla, SpaceX, X (formerly Twitter), Neuralink, the Boring Company, and xAI, are operating in a more favorable regulatory environment under the Trump administration.
Regulatory Agencies and Investigations
At least 11 federal agencies have been impacted by Trump’s actions, with more than 32 ongoing investigations, complaints, or enforcement actions involving Musk’s six companies, according to a review by The New York Times. These include high-profile cases such as the Federal Aviation Administration (FAA) fining SpaceX for safety violations and a Securities and Exchange Commission (SEC) lawsuit accusing Musk of violating federal securities law, potentially requiring him to pay up to $150 million. Additionally, the National Labor Relations Board (NLRB) has 24 active investigations into Musk’s companies, many of which have been stalled due to Trump’s firing of key officials, leaving the board unable to rule on cases.
The Consumer Financial Protection Bureau (CFPB), which has fielded hundreds of complaints about Tesla, particularly regarding debt collection and loan issues, has also been effectively shut down by the Trump administration. Musk, who has expressed open contempt for regulatory oversight, even celebrated the CFPB’s demise on social media, writing "CFPB RIP." His companies are also poised to benefit from the Trump administration’s deregulatory agenda, particularly in areas like space exploration, financial securities, and highway safety. Meanwhile, Musk’s role in Trump’s "Department of Government Efficiency" initiative, which allows him to review spending and staffing across the executive branch, has raised alarms about his ability to influence decisions affecting his own businesses.
Space Exploration and Safety Concerns
One of the most visible examples of Musk’s fraught relationship with regulators involves SpaceX and the FAA. In July 2023, SpaceX launched its Falcon Heavy rocket, carrying a 10-ton satellite into geostationary orbit. While the launch appeared successful to the public, internal documents reveal that the FAA had raised safety concerns about a new fueling facility used for the mission. SpaceX proceeded with the launch despite these concerns, leading the FAA to propose a $283,009 fine. Musk responded angrily, calling the enforcement action "improper, politically-motivated behavior" and demanding the resignation of the FAA’s head, Michael G. Whitaker. Whitaker, a respected aviation lawyer, stepped down on the last day of the Biden administration, clearing the way for Trump to appoint new leadership that may be more sympathetic to Musk’s interests.
The FAA’s ability to regulate SpaceX is critical, as the agency is tasked with ensuring that rocket launches do not endanger the public or harm the environment. However, with Musk’s allies now in key positions, there are concerns that safety standards may be relaxed to accelerate SpaceX’s operations. During the confirmation hearing for Transportation Secretary Sean Duffy, Senator Ted Cruz (R-TX) pressed Duffy to review the FAA’s penalties against SpaceX and to "curtail bureaucratic overreach." Duffy, who has since been confirmed, agreed to look into the matter. Meanwhile, environmentalists in South Texas, where SpaceX operates a launch site, have expressed alarm over the transfer of a federal wildlife biologist tasked with monitoring the impact of launches on threatened species’ habitats. Local activists accuse the Trump administration of "tiptoeing around" Musk’s interests at the expense of environmental protection.
Securities Violations and Financial Regulation
Another high-stakes regulatory battle involves the SEC, which sued Musk in January, accusing him of underpaying taxes by at least $150 million for his purchase of Twitter stock in 2022. The agency alleges that Musk failed to file a required disclosure when he acquired 5% of the company, which would have increased the stock’s value and cost him more to complete the purchase. Musk has dismissed the SEC as a "totally broken organization" and delayed cooperating with investigators for months, further slowing the case’s progress. With Republicans now holding a majority on the SEC’s five-member commission, lawyers involved in the case expect a settlement with a modest fine, rather than the more severe penalties initially sought.
Meanwhile, the Federal Election Commission (FEC) has also been drawn into Musk’s orbit, with several complaints filed against him, including one alleging that he violated federal law by offering voters in swing states $1 million each to encourage voter registration. The FEC’s ability to act on these complaints has been complicated by Trump’s efforts to remove its Democratic chairwoman, Ellen Weintraub. If Weintraub is ousted, the commission may struggle to achieve the four votes needed to open new investigations or approve settlements, effectively hamstringing its oversight of Musk’s activities.
Workers’ Rights and Corporate Accountability
Musk’s companies have also faced scrutiny over their treatment of workers, with two federal agencies—the NLRB and the Equal Employment Opportunity Commission (EEOC)—playing key roles in holding them accountable. The NLRB has been investigating Musk’s companies for a range of alleged violations, including illegal firings and efforts to suppress worker organizing. One notable case involves Twitter (now X), where employees banded together to discuss working conditions through Slack and the messaging app Signal. Twitter allegedly surveilled some employees and tried to obtain their communications, prompting charges that the company had violated labor laws. The NLRB is still reviewing the case, but Trump’s firing of a key board member has left the agency without a quorum to rule on cases. If the board is reconstituted with more Republican members, it could significantly shift the balance of power in favor of employers like Musk.
The EEOC has also been a thorn in Musk’s side, particularly in its lawsuit against Tesla over allegations of widespread racial harassment of Black employees and retaliation against those who spoke out. A judge ruled last year that the case could proceed, rejecting Tesla’s argument that "Black workers can and do thrive at Tesla." However, with Trump expected to appoint new commissioners, the EEOC’s approach to workers’ rights may shift, potentially leading to the dismissal of the case. For now, Tesla remains on the defensive, dealing with the legal and reputational fallout from these allegations.
Fired Watchdogs and Environmental Impact
Trump’s purge of federal watchdogs has also had indirect benefits for Musk. Among the 17 inspectors general fired by Trump was Phyllis Fong of the Agriculture Department, whose agency had been investigating Neuralink, Musk’s brain-implant startup, over allegations of mistreating test monkeys. The nonprofit Physicians Committee for Responsible Medicine had uncovered evidence of infections, internal bleeding, and surgical mistakes in Neuralink’s animal testing, prompting the investigation. Musk has denied any wrongdoing, and the U.S. Department of Agriculture (USDA) ultimately did not cite Neuralink for any violations. However, the firing of Fong and other watchdogs has raised concerns about the government’s ability to hold companies like Neuralink accountable for unethical practices.
Additionally, Trump’s firing of the head of the Office of Government Ethics (OGE), an independent agency tasked with preventing conflicts of interest in the federal government, has further undermined oversight of Musk’s activities. The OGE had been asked to investigate Musk’s dual role as both a government advisor and a corporate executive, with 12 House Democrats arguing that his position creates an "unavoidable conflict of interest" that violates federal law. Their letter to Tesla’s general counsel and board chairman demanded answers about how the company is addressing these concerns. For now, Musk and his companies remain under scrutiny, with many questioning whether his influence over government operations poses a grave risk to public integrity.
Conclusion
The relationship between President Trump and Elon Musk has sparked intense debate over the role of corporate influence in government and the potential for conflicts of interest. While Musk’s companies have undeniably benefited from the Trump administration’s deregulatory agenda and personnel changes, the broader implications for accountability, safety, and workers’ rights remain uncertain. As Musk continues to wield significant power over federal agencies through his role in Trump’s Department of Government Efficiency, critics warn that his dual position may erode the public’s trust in government institutions and undermine the principles of fair regulation. For now, the situation serves as a stark reminder of the challenges of balancing corporate ambition with the public interest in an increasingly partisan political environment.
