Did you know that there’s a law barring federal contractors from making campaign contributions to a political party, committee, or candidate for federal office? Don’t feel bad if you don’t, because neither, it seems, does Elon Musk.
CNN money and politics reporter Fredreka Schouten described Musk on October 26 as “a mega-donor unlike anyone this country has ever seen.” He’s spent more than $445 million on the midterm elections, which is more than anybody ever spent on an election where the donor was not himself a candidate. That doesn’t count the $291 million Musk spent two years ago to elect Trump and other Republicans.
In addition to being a mega-donor, Musk is a mega federal contractor, largely through his aerospace company SpaceX. According to a new report by Democracy Defenders Action, a nonprofit legal group co-founded by Norm Eisen (co-counsel for the House Judiciary Committee during President Donald Trump’s first impeachment), Musk has “won at least $10 billion in contracts since he left the government.” That was a mere 17 months ago, amid a heavily-publicized feud with the president. That $10 billion is actually in addition to the $38 billion that Musk suckled from the federal teat before 2025, and it doesn’t count the $6.3 billion that Musk extracted while he was running Trump’s Department of Government Efficiency. DOGE was supposed to cut government spending, but instead it ran up a bill of $517 billion, not counting the $6.3 billion in federal contracts Musk pocketed at the same time, nor the $10 billion Musk pocketed later. With enemies like this, who needs friends?
It’s hard to imagine a more extreme example of the sort of chicanery that Congress thought it banned way back in 1940. “Those who are making money out of government contracts,” said Virginia Senator Harry Byrd, who sponsored the measure as an amendment to the 1939 Hatch Act, should not make campaign contributions because these “may be considered in some instances as bribery in order to secure governmental contracts.” Congress strengthened the ban after the Watergate scandal revealed that Nixon campaign officials had a hand in awarding architectural and engineering design contracts from the General Services Administration. The ban was upheld by the D.C. Circuit as recently as 2015.
Musk invested $736 million in the second Trump administration and got back $16.3 billion, a return of 2200 percent. So why isn’t the guy in jail? Because when the contractor in question is a corporation, as it nearly always is, the corporation’s officers, directors, major shareholders, and political action committees remain free to spend on federal elections. In addition, the ban does not cover unlimited so-called “independent expenditures” by super PACs such as Musk’s America PAC, which accounts for about half of Musk’s expenditures. These are loopholes through which you can drive a Nicolas Tractomas TR 10x10 D100.
It’s especially galling that Musk is milking the same federal bureaucracy to which he took an axe in early 2025 (as are, I noted earlier this month, the Dwarf-Fortress-playing little creeps who worked under Musk at DOGE). Musk’s twin endeavors were not unconnected. The Democracy Defenders Action report notes that the federal government gave SpaceX exclusive access to its most closely-held space-tracking data only after DOGE “fired many of the federal government’s nascent space traffic control program’s staff,” citing an October 25 report by Tom Perkins in The Guardian. Indeed, DOGE fired all but one of the traffic control staff (presumably as insurance against an impoundment challenge in court). The all-but-certain next step will be for the federal government to privatize space traffic control entirely and hand it over to SpaceX. Democratic congressional investigators, take note.
The biggest contract awards, according to Democracy Defenders Action, are $4.2 billion and $2.3 billion to help the U.S. Space Force build Trump’s Golden Dome missile defense system. The Golden Dome is a replay of Ronald Reagan’s failed Star Wars program, inspired by the success of Israel’s Golden Dome, which covers an area approximately 1/450th the size of the United States. The contracts were approved under a fast-track process called “other transaction authority” that, according to Drew FitzGerald and Micah Maidenberg of The Wall Street Journal, zooms decision-making past “many of the regulations that typically slow the process for acquiring weaponry and other technology.” According to FitzGerald and Maidenberg, the Pentagon request “closely matched SpaceX’s capabilities.” Funny about that.
Dave Vorland, who was President Joe Biden’s acting deputy assistant secretary of space and missile defense policy, told Bloomberg’s Sana Pashankar, “It shouldn’t be the case that you decide ahead of time that you’d like to award a contract to an individual company and then write all the criteria to make that happen.” No, it really shouldn’t. Air Force Secretary Troy Meink, who oversees the Space Force, is close to Musk, a potential problem that Democratic Senators Elizabeth Warren and Tammy Duckworth flagged before Meink’s confirmation. When Meink was under consideration for the position, Musk sat in on his interview. “I’ve never seen anything like this before,” Richard Painter, chief White House ethics lawyer under President George W. Bush, told Politico’s Joe Gould. People in Washington nowadays say that sort of thing a lot.
The goodies handed to Musk by the Trump administration are not limited to federal contracts. According to the Democracy Defenders Action report, the bespoke regulatory relief granted Musk’s companies may be even more important. According to Democracy Defenders Action, “at least 11 of the 15 federal executive departments have taken actions favorable, or potentially favorable, to Musk’s business interests.” The report quotes a comment that American Enterprise Institute defense analyst Todd Harrison made last August to the Journal’s FitzGerald and Maidenberg: “There’s been a lot of focus on their contract wins. In the bigger scheme, the regulatory wins have more systemic, long-term implications for [Musk’s] business model.”
For example, Reuters reported in July, Musk’s Artificial Intelligence company xAI, a unit of SpaceX, was somehow permitted to install 59 natural gas turbines for a Memphis data center “without securing federal clean air permits.” All but two of the turbines were situated across the state line in Mississippi—Memphis sits just north of the Tennessee border—and Mississippi state regulators claimed, erroneously, that the turbines in question were exempt from the Clean Air Act. The NAACP filed suit, on behalf of nearby low-income Black communities, to compel the EPA to enforce the law. The Trump Justice department then threw the federal government’s weight behind xAI, claiming, absurdly, that “The NAACP may not pursue this Clean Air Act enforcement action over the United States’ objection.” It cited for justification a Trump executive order that said: “It is the policy of the United States to sustain and enhance America’s global AI dominance in order to promote human flourishing, economic competitiveness, and national security.” On October 19, a district court judge in Mississippi called bullshit on that and denied the Trump administration’s attempt to dismiss the NAACP challenge.
Another example was the Securities and Exchange Commission’s settlement of a complaint the SEC had brought against Musk in the final days of the Biden administration for delaying disclosure of his Twitter share purchases in advance of acquiring the company. The delay allowed Musk to buy additional shares at an artificially low price. It was a straight-up securities violation, and the SEC initially demanded that Musk pay a $150 million fine. But after Trump took office the agency agreed to instead settle the matter for $1.5 million.
“It’s an embarrassing day for the SEC,” Amanda Fischer, former chief of staff to Biden SEC chair Gary Gensler, told Reuters. The settlement “should cause the public to question whether the SEC is protecting White House insiders at the expense of ordinary investors.” District Court Judge Sparkle L. Sooknanan seemed to agree when she reluctantly approved the settlement. “A court presented with a consent judgment is not a rubber stamp. But neither is it an ombudsman,” Sooknanan wrote. “Whether the Executive Branch (through the SEC) has done enough to hold Mr. Musk to account for his alleged violation is, like many other issues, for our citizenry to decide at the ballot box.” As I’ve noted previously, the November 3 election is as much a referendum on Musk as it is on Trump.
The Democracy Defenders Action report conceded that a few Trump administration decisions went against Musk’s financial interest. Among these were cancellation, under the Big Beautiful reconciliation bill, of a tax credit for the purchase of new electric vehicles that Biden had expanded, and various environmental policy decisions easing up on regulation of gas-powered vehicles. Musk is, of course, chief executive officer of the electric vehicle giant Tesla.
But even this dark cloud, Democracy Defenders Action noted, had a silver lining for Musk. With the resultant withdrawal by legacy automakers from the EV market, Tesla was able to expand its market share from 41 percent to 52 percent. Similarly, Trump’s tariffs hit Tesla hard, but it hit many of Tesla’s competitors harder. Trump’s idiotic trade war with Canada, which includes a threatened 50 percent tariff on Canadian automobiles and auto parts, could sock General Motors and Ford, but Tesla has no plants in Canada, and it’s less reliant on Canada for auto parts.
Whether these softened blows should be tallied among the regulatory returns on Musk’s $736 million investment in Trump and the GOP is a topic I shall leave to cooler heads to solve. But overall, I’d guess Musk is a satisfied buyer. Let’s hope the midterms make him ask for his money back.
