White House press secretary Karoline Leavitt said there will be no conflict of interest as Elon Musk‘s Department of Government Efficiency (DOGE) is expected to target the Securities and Exchange Commission (SEC) as part of the Trump administration’s federal cost-cutting plans.
Newsweek has contacted the White House, the SEC and DOGE for comment via email.
Why It Matters
Democrats have accused Musk’s DOGE team of targeting federal agencies that were investigating the tech billionaire’s companies. Musk has long battled the SEC, which previously fined him millions of dollars and is currently investigating his failure to properly disclose his purchase of Twitter stock—now called X—in 2022.
What to Know
DOGE is set to focus on spending at the SEC and is expected to arrive at the agency in the coming days, Politico reported Tuesday, citing unnamed sources.
On Monday, an official DOGE SEC X account was created to ask the public for help in “finding and fixing waste, fraud, and abuse” related to the Securities and Exchange Commission.
Democrats on the House Judiciary Committee have recently accused DOGE of seeking to “punish” agencies investigating Musk.
This includes firing five inspectors general from agencies, such as the Department of Agriculture (USDA) and the Department of Labor, that were investigating Musk’s companies, including SpaceX, Tesla, and Neuralink.
In a statement to Politico, Leavitt said Musk “plays no direct role” in the administration’s work to “uproot waste, fraud, and abuse.” She added that Musk has also “committed to recusing himself” from potential conflicts.
In January, the SEC filed a lawsuit against Musk, accusing him of misleading shareholders about his Twitter stock purchases amid his 2022 takeover of the social media company. The SEC alleges that Musk underpaid investors by as much as $150 million as a result.
In response, Musk called the SEC a “totally broken organization” on X.
In 2018, Musk and Tesla agreed to pay $40 million after the SEC ruled that Musk’s social media posts saying he had secured funding to take the company private were misleading. Tesla remains a public company today.
During the first hearing of the Subcommittee on Delivering on Government Efficiency on February 12, Texas Representative Greg Casar, a Democrat, highlighted that at least five inspectors general at agencies that were investigating Musk’s companies had been fired by the Trump administration.
This includes Larry Turner of the Department of Labor and Eric Soskin of the Department of Transportation (DOT).
Both the Labor Department and the DOT had multiple investigations into Tesla and SpaceX.
Several Food and Drug Administration (FDA) employees who were reviewing Musk’s brain implant company, Neuralink, were recently fired as part of DOGE’s cost-cutting measures, Reuters reported, citing unnamed sources.
However, the sources said they did not believe the employees were specifically targeted because of their work on Neuralink, which included overseeing clinical trial applications.
Trump and Musk have both dismissed concerns that Musk’s government work may result in a conflict of interest. In a February 11 press conference at the Oval Office, Trump said his administration “wouldn’t let him in” if there were concerns about Musk’s conflicts.
What People Are Saying
White House press secretary Karoline Leavitt told Politico: “[Musk] plays no direct role in the work of those working across the administration to identify, expose, and uproot waste, fraud, and abuse. President Trump is the chief executive of the executive branch and reserves the right to fire anyone he wants. As for concerns regarding conflicts of interest between Elon Musk and DOGE, President Trump has stated he will not allow conflicts, and Elon himself has committed to recusing himself from potential conflicts.”
Texas Representative Greg Casar at the February 12 subcommittee meeting: “At least five inspectors general who were looking into Elon Musk’s companies were fired by the Trump-Musk administration. These inspectors generals—who were independent and protected by law, they are people that find the waste, fraud, and abuse and find many of the cases of waste, fraud, and abuse that have been brought up today—fired because they were looking into Elon Musk.”
Elon Musk, when asked about the possibility of conflicts of interest during the February 11 press conference: “All of our actions are fully public. So if you see anything like, ‘Elon, there may be a conflict there,’ it’s not like people are going to be shy about it. They are going to say it immediately.”
California Democratic Representatives Maxine Waters and Brad Sherman in a February 13 letter to SEC Acting Chair Mark Uyeda: “Given recent reporting, we do not doubt that the approach Musk has taken at other agencies will soon come knocking at the SEC’s door. As stated above, the potential for conflicts of interest is clear. As a private citizen who has been the subject of SEC enforcement—and as someone with an outspoken personal vendetta against the agency and its mission—Mr. Musk’s involvement in any decisions regarding the future of the agency is highly inappropriate.”
What Happens Next
Other federal departments and services, including Medicare and Medicaid, are reportedly in line for drastic cuts by Musk and his DOGE team.
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