Elon Musk’s billions of dollars in contracts with the federal government could grow as his Starlink company is reportedly on the brink of securing a $2.4 billion FAA contract, heightening concerns about potential conflicts of interest involving the billionaire’s companies and his service as President Donald Trump’s cost-cutting czar.
Elon Musk, Department of Government Efficiency leader, speaks at the first cabinet meeting of ... [+]
The Federal Aviation Administration is considering awarding Musk’s SpaceX a contract to provide Starlink internet service for its air traffic control communications network, possibly replacing a deal with Verizon, which was awarded a contract for the FAA’s internet technology in 2023, according to multiple reports.
SpaceX has reportedly already sent some terminals to the FAA, with Musk tweeting the equipment was supplied at “NO COST to the taxpayer on an emergency basis.”
The deal would add to the $30 billion in public funds Tesla and SpaceX have received over the past 15 years, according to a Forbes analysis, including deals with NASA to launch rockets.
It’s not clear if Musk is involved in the FAA-Starlink deal, but the deal—which the agency has acknowledged and said was in the works during the Biden administration—has raised concerns from at least one government ethics watchdog that Musk could receive favorable treatment from the Trump administration given his role heading the Department of Government Efficiency that is leading a sweeping federal downsizing and scrutinizing scores of public contracts in virtually every agency.
The FAA, and other agencies Musk’s DOGE has targeted for layoffs, are responsible for regulating Musk-owned companies and several have accused his businesses of violations, including the FAA.
Musk has been designated a “special government employee” by the White House, a classification that prohibits him from “participating personally and substantially in a particular government matter that will affect his own financial interests,” according to federal law.
Federal Acquisition Regulation also prohibits the government from awarding contracts to “a government employee” or company “owned or substantially owned or controlled by one or more government employees,” though “experts, advisors . . . consultants . . . or members of advisory committees” are generally exempt from the rule, except when those individuals are in “a position to influence the award of the contract.”
Noah Bookbinder, president of the Citizens for Responsibility and Ethics in Washington, told Forbes Starlink’s work with the FAA “certainly creates massive potential for a conflict” and “the appearance of a conflict . . . unless he comes out and says both internally and externally ‘I have no role in this and no favorable treatment and that every avenue is going to be taken to ensure fairness here.’” Bookbinder said it is “deeply, deeply troubling” given that the FAA deal “is really important to the safety of Americans,” but noted that it’s unclear whether Musk is personally participating in making decisions on DOGE’s work with the FAA or on behalf of the FAA related to its deal with Starlink. Bookbinder is the latest ethics expert to warn about Musk’s ties: Senior fellow at the left-leaning Brookings Institution, Norman Eisen—an attorney who is representing current and former employees at the U.S. Agency for International Development who are suing DOGE—previously told Forbes Musk’s role in the federal government and the support his companies have received f “creates a set of some of the most profound conflict questions we’ve seen in our history.” Eisen also questioned whether necessary precautions have been taken to ensure he has no personal financial interest in matters he’s working on. “When you have magnates, including those who have benefited from government largesse in the past, who support a candidate to the tune of hundreds of millions of dollars, and then the candidate is successful and puts them in a position to make government decisions that raise these kinds of conflict questions,” Eisen said. “We have a word for that: it's oligarch.” University of Minnesota law professor Richard Painter, a frequent Trump critic and vice chair of CREW, told the Guardian Musk’s role falls under federal law governing special government employees, while Craig Holman, a consumer advocate, pointed out Musk’s companies are facing federal investigations by agencies he’s now targeting.
Musk approved a shipment of 4,000 Starlink terminals to the FAA earlier this month, Bloomberg reported, citing unnamed sources, and at least one has already been installed at the FAA’s air-traffic control technology lab in Atlantic City, New Jersey, for testing. An FAA spokesperson acknowledged to Bloomberg the agency is testing the system in New Jersey and is considering Starlink to upgrade its communications systems, particularly at sites where weather issues can impact connectivity, such as Alaska. A team of SpaceX employees are already working inside the FAA and have FAA email addresses, according to the Washington Post. Musk responded to the reports of Starlink’s work with the FAA by writing on X, that “the Verizon system is not working and so is putting air travelers at serious risk,” without providing evidence, though he later corrected himself and said the old system is from L3Harris Technologies and the Verizon system is not yet operational. Verizon spokesperson Rich Young defended the company’s work with the FAA in a statement to Politico responding to Musk’s criticism, telling the outlet Verizon is “at the beginning of a multi-year contract to replace antiquated legacy systems.”
Tesla and Space X have received $30 billion in public funding over the past 15 years, according to a Forbes analysis, including $22 billion in contracts to SpaceX from NASA and the Department of Defense and more than $11 billion in regulatory credits that Tesla sold to other automakers to allow them to meet emissions targets. The federal government also provided a $465 million loan to Tesla in 2009 to help the company buy its first factory in California.
Musk is a “special government employee” and will not be paid while working for the government, CNN reported, citing an unnamed source familiar with his employment. Special government employees are expected to work up to 130 days per year and must comply with most rules and guidelines for full-time employees, though some of those guidelines, including conflict of interest guardrails, are often “less restrictive” because their roles are temporary, according to a Justice Department summary. Special government employees are also prohibited from working on matters that could affect an organization or company they work for and from using their role or influence to interfere with an election or engage in political activity.
White House spokesperson Harrison Fields told the Washington Post “any contracts connected to Elon Musk’s very successful companies will comply with every government ethics rule as it pertains to potential conflicts of interests.” White House Press Secretary Karoline Leavitt also said Musk is responsible for identifying his own conflicts of interest and would “excuse himself” when his companies’ contracts overlap with his work at DOGE.
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