Elon Musk says he and Donald Trump have a ‘mandate to cut rules’. Ethics laws could limit Musk’s role

In elect billionaire Elon Musk Wanting to be “our cost-saver” for the US government, President-elect Donald Trump will not be the first US president to give a business magnate the power to seek ways to drastically reduce federal regulations.

President Ronald Reagan tapped J. Peter Grace in 1982 to head a bureaucratic cost-cutting committee. Yet the chemical business magnate had fewer conflicts of interest than the richest man in the world today.

Musk’s SpaceX holds billions of dollars in NASA contracts. He is CEO of Tesla, an electric car company that benefits from government tax breaks and is subject to car safety regulations. His social media platform

“There are direct conflicts between his businesses and the interests of the government,” said Ann Skeet, director of leadership ethics at Santa Clara University’s Markkula Center. “He is now in a position to try to curry favor with these companies.”

Musk also has more influence, because he has pumped an estimated $200 million through his political action committee to help elect Trump, has made itself a permanent fixture at Mar-a-Lago since the presidential election and regularly speaks with like-minded world political leaders, from Argentine President Javier Milei to Italian Prime Minister Giorgia Meloni.

Trump has said that Musk and former Republican presidential candidate Vivek Ramaswamy will lead a new ‘Department of Government Efficiency’ (DOGE) – a joke name referring to the cryptocurrency Dogecoin and appeals to Musk’s sense of humor.

“We finally have a mandate to eliminate the mountain of stifling regulations that do not serve the greater good,” Musk said on X on Wednesday.

Trump has said Musk and Ramaswamy will work from outside the government to provide “advice and guidance” to the White House and will work with the Office of Management and Budget to push for structural reforms — some of which can only be implemented through Congress.

“If it’s a committee, it’s outside the government” and Musk could not hold a White House office or an official government title, said Richard Painter, an ethics lawyer in the White House during the George W. Bush administration. “Then the president either accepts the advice or not.”

However, if it were a real government agency, Musk would run afoul of federal conflict-of-interest laws unless he divested from his companies or recused himself from government business involving them, Painter said.

Trump could grant a rare waiver exempting Musk from those laws, a move that has been politically unpopular in the past, Painter said.

Tesla, SpaceX and X did not immediately respond to requests for comment on Wednesday about whether Musk would recuse himself. Trump’s transition team also did not immediately respond to a request for comment.

However it is structured, Musk’s ideas are expected to have an impact.

Tesla, the electric car company that made Musk the richest person in the world, has had repeated skirmishes with the National Highway Traffic Safety Administration, which regulates vehicle safety. So any cuts in NHTSA funding or staffing could help Tesla.

The agency has forced Tesla to issue recalls it did not want, and it has opened investigations into Tesla vehicles, some of which raised questions about Musk’s claims that Tesla is about to deploy autonomous vehicles without human drivers. The agency is also working on regulations related to vehicle automation.

Auto safety advocates are concerned that a government Department of Efficiency, led by Musk, could propose draconian cuts at the NHTSA.

“That could be incredibly problematic because that would impact any regulation of all the agencies that currently oversee companies that Musk owns,” said Michael Brooks, executive director of the nonprofit Center for Auto Safety, a watchdog group.

If implemented, Musk’s plan for efficiency at NHTSA could mirror what he did when he took over Twitter: draconian staff cuts, said Missy Cummings, director of the Autonomy and Robotics Center at George Mason University and a former NHTSA safety adviser.

While Cummings concedes there is room for much of the federal government to become more efficient, she said the NHTSA is already understaffed and predicted Musk would try to slow or halt NHTSA investigations or hamper the agency , so that it would have problems enforcing regulations.

“It would remain a shell of the agency that it was,” she said. “Their entire job would be to put out commercials reminding people to just wear their seat belts.”