Why Elon Musk’s sprawling empire makes him a problem for Washington

Argentina was headed toward its thrilling victory over France at the World Cup in Qatar, and Elon Musk, the Tesla CEO and Twitter owner, stood in the stands, laughing and holding a wine glass. A woman approached and asked for a selfie. He obliged and smiled. She briefly spoke to him and departed, according to a short video clip of the encounter posted on TikTok.

Musk didn’t appear to recognise the woman or say anything to her. But back in Washington, after her snapshot with the billionaire circulated online, US officials grew uneasy.

She was Nailya Asker-Zade, a Russian state-controlled TV personality who is regarded by President Vladimir Putin’s opponents as one of his top propagandists. And she had just blithely gained access to a man who, among other pursuits, leads one of the US government’s most important contractors, rocket company SpaceX, and has held a federal security clearance.

There’s no indication that anything about Musk’s December encounter with Asker-Zade was improper. But it illustrates, from the point of view of US officials, the trouble with Musk. Since buying Twitter in October for $US44 billion, Musk now controls five companies sprawling across the transportation, aerospace, health, telecommunications and social media sectors. All intersect with government to varying degrees, giving the billionaire unmatched global clout.

Tesla’s electric vehicles underpin President Joe Biden’s climate agenda. SpaceX keeps NASA’s ambitions for manned exploration of space aloft, and its Starlink network, likely the largest privately owned fleet of satellites in the world, offers a vital communication lifeline to Ukrainian forces fighting Russian invaders.

But it’s at Twitter where Musk, the self-styled “chief twit” of the platform, causes Biden’s team the most heartburn.

Elon Musk now controls five companies sprawling across transportation, aerospace, health, telecommunications and social media, giving him unmatched global clout.Credit:Bloomberg

Since taking over the company, Musk has gutted its staff and all but abandoned any semblance of content moderation, allowing disinformation to flourish, sometimes on his own account, with its nearly 132 million followers. He’s also increasingly allied himself with Republicans who claim they’ve been censored by Big Tech and Democrats, and has openly endorsed Biden’s opponents.

His unorthodox management has introduced a fresh layer of volatility to a free-speech venue that is at once a human rights lifeline for those living under authoritarian regimes, like Iran, and an unwitting booster of baseless conspiracy theories that have sparked violence, like in the US.

The US Federal Trade Commission has interviewed at least two former Twitter employees and plans to depose Musk himself in an investigation of the platform’s compliance with a 2011 agreement to protect user privacy, which according to the billionaire is a “shameful case of weaponisation of a government agency for political purposes”.

Within the Biden administration, some top officials fear that between his business empire, his vast wealth and his political alliances, Musk, 51, is close to untouchable. He appears to unilaterally decide, for instance, how Ukraine can use the Starlink service, a presidential-like power atypical for a US defence contractor.

And they worry that because of Tesla’s growing footprint in China and Musk’s dependence on financing from the Middle East for his Twitter deal, he may be vulnerable to foreign manipulation.

One US official, who spoke on condition of anonymity because of the sensitivity of discussing Musk publicly, described Tesla as a Chinese company with an American subsidiary. The company’s factory in Shanghai accounted for more than half of its global production last year. Biden himself has said that the entrepreneur’s foreign ties are “worthy of being looked at.”

At odds with US policy, Musk has proposed both a Russia-friendly plan to end the war in Ukraine and a reunification scheme for Taiwan and China that was publicly applauded by the Beijing government.

“I don’t think there is another American more dependent upon the largesse of the Communist Party than Elon Musk,” Senator Mark Warner, a Virginia Democrat who chairs the Intelligence Committee, said in October.

Asked for comment on the Biden administration’s concerns about him, Musk said in an email: “I believe in the Constitution. Do they?”

Several US officials interviewed for this story asked not to be identified because discussions of Musk’s influence, and how it might be constrained, have been private.

Musk and his companies have endured some scrutiny from federal agencies. He continues to clash with the Securities and Exchange Commission over his tweeting, for example, and the US Justice Department, the SEC and the National Highway Traffic Safety Administration have subjected Tesla’s automated driving claims to greater scrutiny.

Some Biden administration officials have speculated that the government may someday need to break up Musk’s empire.

‘I believe in the Constitution. Do they?’

Instead, some in the administration have weighed whether to subject his Twitter purchase to review by a secretive panel, the Committee on Foreign Investment in the United States, that can block corporate transactions involving foreigners over national security concerns.

At least three foreign entities helped to finance Musk’s Twitter deal: Saudi Prince Alwaleed bin Talal; Changpeng “CZ” Zhao, founder and chief executive of the crypto exchange Binance; and Qatar’s sovereign wealth fund.

Musk has forged close ties with Republican House Speaker Kevin McCarthy, whose California district is home to SpaceX operations. The billionaire spent time with McCarthy at a Wyoming resort last year and personally delivered birthday greetings at the politician’s office in January.

“There’s no walking back the fact that a handful of super-rich guys have a lot of influence in the American economy,” said Senator Chris Murphy, a Connecticut Democrat. “That’s no reason to shy away from using the tools of government to make sure there’s no undue foreign influence on US politics.”

But the Treasury Department has ruled out a review on legal grounds, according to people familiar with the matter.

Even before buying Twitter, Musk enjoyed outsized influence in Washington.

SpaceX is a giant of US government contracting, with nearly $US3 billion in federal work in 2022. But Musk has long since departed from normal CEO behaviour, mostly in comical ways. He briefly smoked pot on a live-streamed podcast hosted by Joe Rogan, annoying some Tesla investors and SpaceX employees.

He tweeted that he had lined up financing to take the carmaker private at $US420 per share, a joke referring to a slang name for marijuana that earned him an SEC investigation, a slap-on-the-wrist fine (for him) of $US20 million and a shareholder lawsuit.

Musk has said he “reluctantly” voted for Biden in 2020, but his public political persona has steadily veered rightward since the president took office. Days before the midterm elections last November, he urged his millions of Twitter followers to vote for Republicans.

He then threw his support behind Florida Governor Ron DeSantis for president in 2024, suggesting the conservative governor, who has flown migrants from Texas to Massachusetts as a political stunt while cracking down on the teaching of sexuality and racism in grade schools, is “sensible and centrist.”

In October, Musk tweeted a plan to end the war in Ukraine that would entail Kyiv permanently surrendering Crimea, the peninsula that Russia illegally annexed in 2014, abandoning its ambition to join NATO, and agreeing to UN-supervised elections in areas Russia occupies to determine whether Moscow would keep control of the territories.

US intelligence officials were aghast. The proposal was applauded by Putin’s allies while helping to popularise the idea that Ukraine should make concessions to Russia to end the war and that the US and its allies should curb support for Kyiv’s military. That sentiment has taken hold among some Republican politicians, complicating efforts by Biden and Republican leaders such as Senator Mitch McConnell to maintain US military support for Ukraine’s war effort.

DeSantis issued a statement on March 13 saying that Ukraine’s defence is not a “vital” US interest and describing the war as a “territorial dispute.”

Musk has threatened (by tweet) to cut off Ukraine’s free access to the Starlink network, which US officials regard as a key advantage for Kyiv, allowing the country’s military leaders to maintain command-and-control of its forces without depending on more vulnerable radio and phone systems.

The billionaire backed off after outcry from Ukrainian leaders and their allies, but has continued to complain about the cost of the service and said last month that Kyiv won’t be allowed to use Starlink to target drone attacks on Russian forces. That’s drawn rebukes overseas and at home.

Elon Musk says he “reluctantly” voted for US President Joe Biden in 2020.Credit:AP

“I certainly hope we put pressure on Musk to join with the family of civilised nations in opposing Putin and doing everything we can to defeat him,” Senator Dick Durbin, the No. 2 Senate Democrat, said.

To the extent that Musk is a problem for the Biden administration, it’s one of interdependence. His ventures’ ambitions align with key elements of the president’s agenda, including increasing the share of electric vehicles on the road. This has created an uneasy marriage of convenience at times, one that has become more fractious as Musk begins to mix his inspiring rhetoric about the future of humanity with bare-knuckle politics.

White House officials met on January 27 with Musk and other Tesla leaders at the company’s Washington office, where they discussed how the carmaker could help the Biden administration achieve its climate goals, including by opening its network of charging stations to vehicles made by competitors.

“They have a big footprint,” Mitch Landrieu, a senior adviser to Biden, said.


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