Now President-elect Donald Trump with Elon Musk during an October 5 rally in Pennsylvania. Photo / Doug Mills, The New York Times
Even before Donald Trump was re-elected, his best-known backer, Elon Musk, had come to him with a request for his presidential transition.
He wanted Trump to hire some employees from Musk’s rocket company, SpaceX, as top government officials – including at the Defense Department, according to two people briefed on the calls.
That request, which would seed SpaceX employees into an agency that is one of its biggest customers, is a sign of the benefits that Musk may reap after investing more than US$100 million in Trump’s campaign, pushing out a near-constant stream of pro-Trump material on his social media platform, X, and making public appearances on the candidate’s behalf across the hard-fought state of Pennsylvania.
The outreach regarding the SpaceX employees, which hasn’t been reported, shows the extent to which Musk wants to fill a potential Trump administration with his closest confidants even as his billions of dollars in government contracts pose a conflict to any government role.
Musk and executives at SpaceX and Tesla, his electric-vehicle company, did not respond on Wednesday to requests for comment. A spokesperson for Trump’s transition team also did not respond to a request for comment.
The six companies that Musk oversees are deeply entangled with federal agencies. They make billions off contracts to launch rockets, build satellites and provide space-based communications services.
Tesla makes hundreds of millions more from emissions-trading credits created by federal law. And Musk’s companies are facing at least 20 recent investigations, including one targeting a self-driving car technology that Tesla considers key to its future.
Now, Musk will have the ear of the president, who oversees all of those agencies. Musk could even gain the power to oversee them himself, if Trump follows through on a promise to appoint him as head of a government efficiency commission. Trump has told Musk that he wants him to bring the same scalpel to the federal government that he brought to Twitter after he bought the company and rebranded it as X. Musk has spoken of cutting at least US$2 trillion from the federal budget.
The effect could be to remove, or weaken, one of the biggest checks on Musk’s power: the federal government.
“All of the annoying enforcement stuff goes away,” said Stephen Myrow, managing partner at Beacon Policy Advisors, a firm that sells corporations daily updates on regulatory and legislative trends in Washington.
Hal Singer, an economist who has advised parties filing antitrust challenges against technology companies and also is a professor at the University of Utah, said that Tesla and SpaceX can expect less scrutiny from the Justice Department.
“They are unlikely to go after Elon – Trump’s DOJ won’t,” he said. “Abstain from investigating your friends, but bringing cases that investigate your enemies – that is what we saw during the first Trump administration.”
On the campaign trail, Trump made clear that Musk was already reshaping his views. He once railed against government efforts to promote electric cars, the heart of Tesla’s business. Not anymore.
“I’m for electric cars,” Trump said in August, after Musk first endorsed Trump’s reelection effort the month before. “I have to be, because Elon endorsed me very strongly.”
Trump also made it clear in recent interviews that he would use his executive power to help out Musk.
“We have to make life good for our smart people,” Trump said at a rally in Michigan in July, continuing, “and he’s as smart as you get.”
Already, on Wednesday, Musk’s wealth surged by US$20 billion as Tesla’s stock rose in the aftermath of the election, bringing his total net worth to US$285 billion, according to an estimate by Forbes.
Tesla benefits from a US$7500 tax credit for electric-vehicle purchases, which helps bring down the cost of buying one of its cars. Tesla last year also earned US$1.79 billion from carbon credits, according to its most recent annual report. It sells the credits to other car manufacturers whose fleets do not meet emission limits imposed by the federal government, as well as to the European Union, California and China.
Changes to the tax credit given to new car buyers and to the federal emission standards on new cars could impact the benefits Tesla receives, though its competitors General Motors and Ford need the credit even more than Tesla, economists and regulatory lawyers said.
Musk has had a much more contentious relationship with President Joe Biden, who snubbed him and his car company in 2021 when he invited all the big carmakers to an electric vehicle summit and did not include Tesla, one of the largest at the time. Musk has repeatedly complained about the slight since then.
The biggest ties to the federal government among Musk’s operations are with SpaceX, which just last year secured US$3 billion in new federal government commitments and a total of about US$11 billion in contracts over the five years.
But Musk is seeking more.
His allies in Congress and at the Federal Communications Commission have already challenged a decision by the commission to revoke a plan to offer SpaceX an US$856 million subsidy to provide broadband internet service in rural parts of the United States. The effort was led in part by Brendan Carr, a Republican commissioner at the FCC. He has championed Musk and SpaceX on his social media feed in recent months, even intervening in Musk’s battle with the government of Brazil over X, even though the social media company is not in Carr’s purview. (Starlink, which was caught up in the dispute, is.)
Carr did not immediately return a request for comment.
House Republicans recently started an investigation into the FCC’s position on the rural internet request, suggesting that the agency’s decision might be reconsidered if Republicans take control of the commission, as is likely once Trump is sworn in.
SpaceX also holds huge contracts with the Defense Department, so many that Pentagon officials have grown concerned that they are over-reliant on Musk’s company for rocket launches.
“Having a good friend in the White House could be a very good thing for Tesla and SpaceX,” said Scott Amey, general counsel at the Project on Government Oversight, a group that monitors federal contracting, particularly at the Pentagon. “You have to worry about decisions that are not best for taxpayers when you have those kinds of cosy relationships.”
At Nasa, which also has large contracts with SpaceX, Musk may press for the agency to adopt his longstanding obsession with travel to Mars, in place of its current ambitions to return to the moon. Trump has previously expressed support for such a move.
“Hey, we’ve done the moon,” Trump said back in 2019, during his first term as president. “That’s not so exciting.”
Currently, Nasa expects to spend a total of US$93 billion between 2012 and 2025 on this moon mission, called Artemis. There have already been calls to re-evaluate this commitment, which includes a contract with SpaceX of up to US$4.4 billion for two landings on the moon.
The most concrete evidence of Musk’s efforts to reshape the agencies he does business with is his efforts to install his employees in the Defense Department. People familiar with those efforts said Musk recommended two SpaceX employees – a retired Air Force general and a government-affairs executive – as possible hires.
Among the SpaceX executives who have been recommended by Musk, General Terrence J. O’Shaughnessy, an adviser who is retired from the Air Force, and Tim Hughes, a government affairs executive, are among Musk’s closest advisers, according to one of the people briefed. Hughes did not return a request for comment and O’Shaughnessy could not be reached.
The role that Musk could play for Trump could be similar to what another tech mogul, Peter Thiel, played for Trump eight years ago. Thiel seeded the transition team, and eventually the government, with several of his top allies and Musk likely would have the same opportunity, given Trump’s admiration for him.
Musk has already met with Howard Lutnick, the lead of Trump’s transition team. Several of Musk’s closest friends in politics, such as tech investors David Sacks, Joe Lonsdale and Ken Howery, have publicly or privately said that they would be open to helping the Trump administration, according to their public comments or people who have spoken with them. Lonsdale declined to comment.
What seems clear is that Musk will likely see some kind of a return for his efforts to help Trump secure a second term. The weeks and months ahead will give greater clarity about what those benefits will be.
“He was going to do fine either way,” Myrow of Beacon Policy Advisors said. “But he definitely does better under Trump. It was probably worth his investment.”
This story originally appeared in The New York Times.
Written by: Eric Lipton, Kirsten Grind, David A. Fahrenthold and Theodore Schleifer
Photographs by: Doug Mills
© 2024 THE NEW YORK TIMES
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