Few would deny that the Defense Department, with its $886 billion budget and byzantine ways, could be run more efficiently. Many have called for sweeping reforms of one sort of another. But if billionaire defense contractor Elon Musk and his DOGE team disrupt Pentagon data systems, contracts, and employees as they’ve done at other federal agencies, the results could expose critical national-security data, endanger personnel, and create unprecedented conflicts of interest, say current and former officials and outside experts.
The danger posed by young, inexperienced software engineers with an overly broad mandate to access information, and who may not have received the usual background checks for top-secret clearances, “should be raising alarms all over Congress,” said one defense information-security official.
Even Defense Secretary Pete Hegseth appears wary, though he said on Wednesday that he had been in touch with Musk and that he looks forward to “welcoming” the DOGE team to the Pentagon “very soon.”
Hegseth told reporters in Germany that Musk’s team has been “working in collaboration with us. There are waste redundancies and head counts in headquarters that need to be addressed,” he said, suggesting that there may be “billions” of dollars to be saved.
But the secretary also drew a line of sorts, declaring that “the Defense Department is not USAID”—the far smaller agency that provides humanitarian assistance around the world but is now operating with a fraction of its previous staff and with most aid and contracts frozen. The DOGE team is gutting the agency, which Hegseth said was “pursuing globalist agendas that don’t have a connection to America first. That’s not the Defense Department.”
DOGE may be able to help the Pentagon streamline “the way we acquire weapon systems.” But, Hegseth said, “We’re not going to do things that are to the detriment of American operational or tactical capabilities.”
That may be a sign that Hegseth will resist the sort of bullying tactics that Musk’s team employed against USAID personnel—and that’s what many in the Defense Department are hoping. Said the defense infosec official: “The unknown factor for all of us at this point is whether the new secretary of defense will come down on the side of national security or political and personal economic enrichment.”
“Insider threat”
When Trump took office on Jan. 20, Musk assumed a potent role: leading the “Department of Government Efficiency,” a team in the Executive Office of the President whose stated purpose is “modernizing Federal technology and software to maximize governmental efficiency and productivity.”
Within days, Musk’s DOGE teams had gained administrative access to highly sensitive federal IT systems in multiple agencies. According to The Washington Post, Musk’s agents were granted “sweeping authority” over Office of Personnel Management databases containing records on millions of federal employees. They accessed files about Treasury and State Department officials in sensitive security positions, even obtaining administrator-level permissions that let them install software and alter internal logs of their activities—making it perhaps impossible for other security officials to track what changes have been made or by whom.
The push didn’t stop at OPM. By early February, DOGE operatives had plugged into the Treasury Department’s central payments database—which handles disbursements from income tax refunds to Social Security benefits and federal salaries—letting the team review trillions of dollars in government transactions.
DOGE has since expanded into the Department of Labor and other agencies. These moves, unprecedented in scale and speed, have caused widespread alarm among watchdogs and security professionals.
A memo sent last week to Treasury officials— by a contractor that runs a threat intelligence center for the department’s Bureau of the Fiscal Service—called DOGE’s access to the payment network “an unprecedented insider threat risk,” that should be “immediately” suspended, the Washington Post reported.
Musk’s team’s actions appear to violate federal privacy and cybersecurity laws, such as the Privacy Act of 1974 that strictly limits disclosure of personal records. There’s a reason for the law, University of Virginia law professor Daniella Citron argues in Lawfare: personal information can be used for coercion and control.
“Personal data stored in agency systems is supposed to be safeguarded so that individuals can carry on free from fear that their personal data might land them on a blacklist,” she writes.
A coalition of federal employee unions alleges in a lawsuit that Treasury unlawfully gave Musk’s advisers “full access” to personally identifiable payment records without consent or proper authorization. The unions and the Alliance for Retired Americans, a trade union group, argue that such access flouts Privacy Act protections and tax confidentiality laws, calling it “a data breach of exponential proportions.”
Federal judges and even executive-branch officials pumped some brakes. On Feb. 6, Treasury officials temporarily halted DOGE’s access to its payment systems. Separately, a federal judge ordered the Treasury to tighten access controls on its systems to prevent unrestricted snooping. On Friday, two federal judges will decide whether Musk’s teams should have access to Treasury data related to health, labor, and other sensitive information about Americans that could be used for intimidation—or, in the case of Pentagon employees, possible targeting by adversaries.
Of great concern to many lawmakers and others are the people on Musk’s team, a group that includes young men in their early twenties associated with his various companies. They may have top-secret clearances; on his first day in office, Trump said he would grant six-month clearances without background checks. Officials have not said whether any DOGE members have such clearances and whether they have undergone any of the screening clearance holders normally undergo.
That lack of operational security know-how is showing up in some ugly ways. On February 5, The New York Times reported that Musk’s team revealed the names of recent CIA hires in an unclassified email sent to the White House. Senate Intelligence Committee Vice Chair Mark Warner, D-Va., and other Democrats sent a Feb. 6 letter to the White House calling that an “unprecedented security risk.”
Yet DOGE is now effectively in charge of hiring across the federal workforce. That could create further conflicts of interest and reduce agency independence, as new hires will have to display adherence to Musk’s incentives rather than agency or Department mission.
Even people properly vetted to receive a top-secret clearance are not permitted to roam at will through the nation’s secrets. The defense information-security official told Defense One that even with a top-secret clearance, people attempting to access information are still expected to have an “actual operational need to know,” before they can access files outside of their core job function.
Conflicts of interest
As Musk’s team has moved from agency to agency, it has created a web of conflicts of interest.
“Staffing changes, including the firing of several top officials, have affected agencies with federal investigations into or regulatory battles with Elon Musk’s companies,” the New York Times wrote on Tuesday.
The arrival of DOGE at DOD would put a major contractor in an oversight role.
“Over the last decade, Musk’s companies SpaceX and Tesla were awarded at least $18 billion in federal contracts, according to spending data—with SpaceX winning more than $17 billion worth of contracts since 2015,” ABC News reported on Monday.
SpaceX supplies rocket launches and critical low-cost satellite communications through Starlink and its militarized version Starshield; other work includes satellites to track next-generation hypersonics, and even a pathfinding project for rocket-based cargo delivery.
When Musk says that his Pentagon SpaceX contracts provide the best taxpayer value, he has a point, at least in terms of launch and satellite communications. SpaceX launches are half as expensive as the United Launch Alliance, its closest competitor. But Musk has a variety of commercial interests beyond launch and may be able to use his position at DOGE to steer more money toward them.
One of Musk’s team this week took dual high-profile advisor posts at the State Department and the Department of Homeland Security. Yesterday The New York Times reported a new State Department plan to purchase $400 million in Tesla-made armored Cybertrucks, despite owners complaining about poor build quality in the expensive machines. Musk also has interest in a company that works on neural brian implants, a closely-guarded area of Defense Department research.
But what really sets Musk apart from other defense contractors are his foreign conflicts, including with potential adversaries of the United States.
He’s received—and at least partially paid back—billions of dollars in loans from China. Tesla sold almost 657,000 cars to Chinese consumers last year. China also controls much of the rare-earth mineral deposits that Tesla needs for manufacturing.
The Wall Street Journal has reported that Musk enjoys regular phone chats with Russian President Vladimir Putin and, since taking over social media platform Twitter and renaming it X, has personally spread Russian-government disinformation on the site. Russian disinformation on X has increased considerably, according to a September 2023 EU report.
Musk has also taken billions of dollars from Saudi Arabia for his social media and AI endeavors.
Asked about the inherent conflicts of interest in a defense contractor handling financial matters for the Defense Department, Musk on Wednesday said, “If you see any contract where it was awarded to SpaceX and it wasn’t, by far the best value for money for the taxpayer, let me know.”
DOGE approach
But Musk’s very approach to government efficiency is also wrong for the Pentagon, and indeed the very objective of accelerating and simplifying the purchase of new technologies, at least according to one former Defense Department official who led efforts for similar reforms.
At many of his companies, from X to Tesla, Musk has sought to increase efficiency by using automation to replace humans. That works well in some contexts, poorly in others. Musk is reportedly taking a similar approach to creating government “efficiency.”
Michael Brown, who served as a White House Innovation fellow and the head of the Defense Innovation Unit and is currently the head of venture capital firm Shield Capital, told Defense One in January that the problem with the Pentagon is not too many people, it’s too few in key roles like contracting officers.
What the Pentagon needs is more humans that know how to understand alternative contracting mechanisms and they could lead efforts to train new automated expert systems.
“I think that everybody’s going to be for more efficiency and effectiveness…I think everybody would be for automation,” Brown said.
But the Pentagon, and particularly the portion Musk would be targeting, can’t just be handed over to a robot, he said.
“What we ought to be looking at is: how do you simplify the process before you automate?” he said. “Let’s not try and automate the [federal acquisition regulation], which is 2,000 pages. You know, how can that be simpler?”
Hostile takeover
One former senior defense official said Musk is taking a very conventional hostile corporate takeover approach to DOGE’s targets, with mass firings and contract cancelations. That’s a fine strategy against small prey, like USAID, but won’t work well against the Defense Department for a variety of reasons.
“There’s a nuanced level that that tends to be missing for ” the DOGE team, the former official said. “They don’t understand the systems and implications. So there hasn’t been much listening or learning, compared to just go, go, go.”
And the Defense Department comprises a lot of systems with many implications. It’s also a healthcare provider with more than 850 facilities, a housing, food service and transportation entity with offices all over the world. Even different parts of the same service branch face obstacles getting data from another portion of the same service, much less a civilian teenager with no rank. Shutting down huge aspects of Defense Department activity can’t be done quickly or unilaterally.
Also, while some bureaucracy layers are vulnerable to cuts at the top, the military can’t be gutted for staff like a small agency. Mass firings won’t produce the sort of immediate effect, or new opportunity, that they might have at another agency.
“The DOD can survive a long time in its current form because you have the military, and you assign the military to fill technology gaps. You say ‘Put down this rifle and sit at this desk and fix this,’” the official said.
Musk will be able to break things but not necessarily just replace them with new systems or solutions or issue commands as though he was an actual, well, commander.
To be sure, there are many ways the Defense Department could be reformed. But given its role in national security, major changes demand caution. Many defense and military requirements are written in blood.
“A requirement that seems outdated or wasteful may have enormous consequences under certain circumstances,” Todd Harrison of the American Enterprise Institute wrote at Defense One in November. “The practitioners of the Musk Algorithm should understand that some inefficiencies in the military are by design: they are strategic choices that maintain options in unlikely but highly consequential scenarios.
“Musk admits that he errs on the side of deleting too many requirements, arguing that ‘if you do not end up adding back at least 10 percent of them, then you didn’t delete enough.’ How do you know what needs to be added back when failure is not an option? In the military, every deletion could put lives at risk,” Harrison wrote.
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