Governing by tweet, President-Elect Donald Trump’s administration announced Tuesday night that Elon Musk and Vivek Ramaswamy will co-lead a new Department of Government Efficiency, where they will “dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.” It sounds like a lot of responsibility for two men that nobody elected to office. It also seems a bit fishy to appoint Musk, a man whose wealth is massively dependent on government contracts and other federal support, to a role with influence over spending.
Gizmodo interviewed Jordan Libowitz, vice president of communications at the nonpartisan nonprofit Citizens for Responsibility and Ethics in Washington, about what ethical obligations Musk and Ramaswamy may have in their new roles.
This conversation has been edited for brevity and clarity.
Gizmodo: We don’t know much about this new Department of Government Efficiency. But based on Trump’s announcement, is it likely Musk or Ramaswamy will require any sort of Congressional approval to lead it?
Jordan Libowitz: We don’t really know what this new body is. They use the term department, but it is not likely to actually be a department. Departments are created by Congress and Congress has not created a new department here. So it’s likely not to be something that goes through a Senate confirmation process.
What it is really affects the obligations that Musk and Ramaswamy would have in terms of statutes on conflicts of interest and the like. We don’t know where it fits into the government, but it seems to be something that would solely be a presidential appointment more along the lines of a blue ribbon commission or a study group, not like the Department of Homeland Security.
Gizmodo: If it is more of an advisory body, what kind of financial and conflict of interest disclosures might Musk have to make?
Libowitz: There are a couple of possibilities. The first question is whether they’re going to be considered something called a special government employee, which is subject to conflict of interest laws. It depends on how they’ll be interacting with government employees. Will they be directing government employees in any way? Will they be viewed as speaking on behalf of Trump and his administration? What are their duties?
Depending on those, they would be subject to conflict of interest laws. They would have to file financial disclosures. Section 208, the Criminal Conflict of Interest Statute, would kind of tighten what they’re able to do. When you have 208 concerns, you’re talking about a matter of either recusal or divestiture. They can either say, hey, I’m not going to do anything that has anything to do with social media companies, or space, or the automotive industry, or anything else they have assets tied to or they could divest those assets before they get into the process.
What we have heard is [Trump] using the term advise, right? They’re going to be advising the government. So it’s also going to be a question of whether this falls under the Federal Advisory Committee Act. If this is considered a FACA group, they’re going to have to be more transparent. If it’s not a FACA group, then there’s a decent chance they’re going to be falling under the auspices of lobbying and they’ll have to make lobbying disclosures.
Gizmodo: If it turns out that Musk and Ramaswamy don’t qualify as special government employees or fall under FACA does that mean they won’t have much power or influence over government operations?
Libowitz: You know, influence is a funny thing. There are a lot of ways to have it. Donald Trump and his previous administration famously, or infamously had, three members of Mar-a-Lago just calling in to give departments advice—it was the [Department of Veterans Affairs], they were giving advice on how to do things—and no one in the government knew who these people were.
Anyone close to the president, if the president so wishes, can seem to have a lot of influence on the government. But the more kind of concrete action they’re taking, the more likely it would classify as lobbying.
Gizmodo: If Musk does have to file a financial disclosure, what might we learn from it?
Libowitz: It’s basically assets and debts, a breakout of what all their assets are, usually within certain ranges—for Musk, I assume a lot of them are going to fall into the over $50 million range—but also where they own money and what rates those are at.
There’s a lot of debate going on right now about what the valuation of X, formerly Twitter, is. From what we’ve seen from bank write-offs, it’s a lot less than it was a year or two ago. [Musk] would have to give his ownership and what that’s valued at and that would give a much more transparent view of what the company is valued at.
We might also learn where Musk’s money is outside of the kind of three big companies [X, Tesla, and SpaceX] he owns—because he owns a lot of companies. Where is he invested elsewhere?
The whole point of this is for the public and for the government to see… are there potential conflicts of interest by members of the government? Should he file a personal financial disclosure form, we would see a lot more details about what he owns, what the valuation is, where his debts lie, and how liquid he is.
Gizmodo: Do you want to speculate about how this will play out and what ethics rules Musk will have to follow?
Libowitz: I have no earthly idea. This could be anywhere from they are running a shadow government to they just got shooed into a corner. We just don’t have enough details about what this actually is. I think only time will tell what amount of influence it has.
The government moves slowly. There’s only so much reform you can put into two years and a lot of things have to go through Congress. Congress is many things, but fast isn’t one of them.
But the contractor thing, between NASA, the Department of Defense, and SpaceX, that’s where a potential conflict of interest is probably most likely to pop up.