Elon Musk isn’t the one tech billionaire with energy over the federal companies that regulate his companies. Since Donald Trump took workplace, greater than three dozen staff, allies, and buyers of Musk, Peter Thiel, Marc Andreessen, and Palmer Luckey have taken roles at federal companies, serving to direct billions in contracts to their corporations.
Firms owned, based, or invested in by Musk, Thiel, Andreessen, and Luckey have collected greater than a dozen federal contracts totaling about $6 billion since Trump’s inauguration in January, in accordance with a Wall Avenue Journal evaluation. They usually’re actively pursuing billions extra.
These appointments, that are in departments that oversee, regulate, and award enterprise to the 4 males’s corporations, elevate quite a lot of pink flags. They might violate conflict-of-interest legal guidelines or authorities ethics laws, each of which prohibit federal staff from utilizing public workplace for personal achieve.
And whereas it’s common to put in trusted allies in authorities roles, Musk’s community has moved in at an unprecedented charge and scale. TechCrunch has beforehand reported on all the folks in Musk’s universe who’ve joined him at DOGE, the place he has shuttered federal companies and slashed workforces in departments that regulate his companies. A minimum of 19 others with Silicon Valley connections, be they founders or buyers, have additionally joined DOGE.
“The second Trump administration is definitely the primary in recent times to not impose any form of extra ethics safeguards on high-level appointees,” Daniel Weiner, director of the Brennan Heart’s Elections and Authorities Program, informed TechCrunch. He famous that Trump fired the director of the Workplace of Authorities Ethics and 17 inspectors basic who served as watchdogs for fraud and abuse, instantly after taking workplace.
“It actually does probably improve the danger that you’ve got folks engaged on issues that do influence, at the least not directly, their backside traces,” Weiner stated. “However this can be a long-term problem in our authorities that’s not distinctive to this administration.”
Innovation versus accountability
Some might argue that it is smart for workers and associates of Musk, Thiel, Andreessen, and Luckey to hitch authorities companies. Their insiders are proficient people who’re behind the cutting-edge know-how the federal government genuinely wants, and so they perceive easy methods to innovate rapidly and compete globally.
Extra severe questions come up when favoritism threatens to undermine competitors, when coverage is created or destroyed to guard market dominance, or when laws that will serve the general public good are waylaid to advertise enterprise pursuits.
As an illustration, the Client Monetary Safety Bureau lately retreated from pursuing guidelines that will limit information brokers, regardless of rising privateness considerations — a shift that stands to learn corporations concerned in AI, surveillance, and information analytics. One other instance is DOGE’s firing of staffers on the Nationwide Freeway Site visitors Security Administration who examine autonomous automobile security, together with a number of probes into Tesla.
“One of many defining structural challenges the federal government of america has proper now could be that we’ve a system wherein the very wealthiest pursuits have a lot energy to form our elections after which flip round and form authorities coverage,” Weiner stated.
One other Silicon Valley appointee, Mike Kratsios — a former Thiel worker — is now main know-how coverage for the U.S. authorities. In an April speech, he spoke about throwing away unhealthy laws that “crush our innovators,” notably those that are innovating in AI.
“Many individuals in Silicon Valley are inclined to suppose that no matter labored in Silicon Valley can also be going to work for administering america authorities,” Weiner stated. “And as we’re seeing now, the hazard is lots of people are going to get harm due to the assumptions they make.”
“The truth that you had a profitable startup after 5 others failed doesn’t essentially imply you know the way to run the Social Safety Administration,” he continued.
A community inside and a payoff outdoors
All the companies between Musk, Thiel, Andreessen, and Luckey are associated. Musk’s SpaceX was backed by Thiel’s Founders Fund and Andreessen’s a16z (which additionally invested in X and xAI). Each of these VCs additionally backed Anduril, Luckey’s protection startup.
The overlapping community of founders, funders, and insiders extends into a number of federal companies. And in lots of circumstances, these companies are steering billions in federal contracts again to these corporations.
The Journal discovered that throughout Washington, folks from Musk’s community, together with Tesla, X, and SpaceX, are in additional than a dozen companies, from the chief workplace of the president and Workplace of Personnel Administration all the way in which all the way down to the Division of Transportation and the Division of Vitality.
SpaceX staff are additionally in companies that might present the corporate new enterprise. For instance, the Journal stories that SpaceX senior engineer Theodore Malaska received an ethics waiver in February that lets him take a short lived job on the Federal Aviation Administration whereas nonetheless working on the rocket firm. The FAA hasn’t given any contracts to SpaceX but, however Malaska stated on X the company has used Starlink to improve a weather-observing system in Alaska.
SpaceX can also be the primary industrial supplier that transports crew and cargo for NASA. Regardless of nationwide safety considerations — like the corporate’s secret backdoor for Chinese language funding and Musk’s reported drug use — SpaceX in April received $5.9 billion of a $13.7 billion multi-year contract from the U.S. Area Power to launch Pentagon missions. The DOD, which is at the moment a Starlink buyer, additionally plans to purchase SpaceX’s Starshield satellites, a militarized model of the web satellites.
Staff at Thiel-backed corporations have discovered themselves in roles within the State Division, the Workplace of Administration and Funds, Well being and Human Companies, and Social Safety, per The Wall Avenue Journal. Thiel’s Palantir has already been awarded practically $376 million since 2020 from the Division of Well being and Human Companies. In 2024, the corporate was additionally awarded at the least $1.2 billion in Division of Protection contracts in 2024 and is within the operating for one other $100 million deal.
Anduril, Palantir, and SpaceX lately submitted a multibillion-dollar proposal for Trump’s “Golden Dome” missile-defense program, which might additionally add to Anduril’s current contracts with the U.S. Military. Not too long ago, Anduril and Microsoft took over a 2021 contract price as much as $22 billion to develop AR headsets, per the Journal.
An Anduril government, Michael Obadal, has been nominated to a prime function on the Division of Protection. In his ethics disclosure, he said that he would retain his Anduril inventory if appointed.
TechCrunch has reached out to Anduril, Andreessen Horowitz (a16z), Palantir, and SpaceX for remark.
“This form of focus of personal wealth and political energy is finally very dangerous for our financial system,” Weiner stated. “As a result of as an alternative of the federal government making selections which are meant to foster competitors, foster financial progress, you run the actual danger that authorities selections are going to as an alternative be structured round defending explicit corporations and explicit industries from full financial competitors.”
