Elon Musk's companies, including Tesla, SpaceX, and X, are being sued or probed by federal agencies. Trump could make them go away.
Lisa O'Connor/AFP/Getty Images and AP Photo/Chris Carlson
With a few pen strokes, Donald Trump could make many of Elon Musk's problems go away.
Shortly after a gunman shot at Trump's head two weeks ago, injuring his ear, Musk made his preference for the 2024 presidential election known.
After being openly hostile to President Joe Biden on X, he endorsed Trump. When Trump chose as his running mate JD Vance — the US Senator from Ohio with deep links to Silicon Valley power brokers — Musk ramped up the promotion. This week, he said on X he had formed a political action committee "supporting a meritocracy & individual freedom," which he said he now associates with Republicans.
If Trump were to become president again, he could repay the favor. Musk has a lot to gain.
Trump's plans to lower corporate and personal taxes are certainly a plus. But Musk also stands to gain with a new administration controlling federal regulations.
"You can think of Musk's contribution as an investment," Michael Gerhardt, an expert in administrative law at the University of North Carolina, told Business Insider. "To eliminate any governmental interference with his businesses."
Musk owns six companies, all of which are subject to regulations from different agencies controlled by the executive branch.
The conservative-controlled Supreme Court's recent SEC v. Jarkesy decision, along with its Loper Bright decision striking down much of the Chevron doctrine, made it harder for federal agencies to enforce laws and regulations against companies. But with Trump as president, Musk wouldn't even need to dismantle the so-called "administrative state" to get federal agencies out of his way.
As the head of the executive branch, the president can simply sign executive orders and make hiring decisions to change the direction of federal agencies.
Tesla, SpaceX, and X (formerly Twitter) are all the subjects of ongoing federal investigations and lawsuits, and Musk's brain chip company, Neuralink, is highly regulated. A president has the power to change regulations, end those investigations, and free those companies from future regulatory action. Trump could also direct agencies to simply drop investigations or withdraw lawsuits, like the Justice Department's civil rights lawsuit against SpaceX for Musk's refusal to hire refugees for certain positions, or the agency's investigation into Tesla's self-driving claims.
As president, Trump could direct the Justice Department and other executive agencies to drop any actions against Trump and his friends' businesses, Gernhardt told BI.
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Musk's plans to build factories and towns for his employees in Texas have caused environmental problems. Recent Supreme Court decisions have watered down the Environmental Protection Agency's ability to protect environments due to construction, according to Jillian Blanchard, an environmental lawyer at Lawyers for Good Government. But a president could make it even easier for companies to challenge regulations, she said.
"Federal environmental rules like NEPA require you to do all sorts of environmental analysis before you build out a big manufacturing plant, for example," she said, referring to the National Environmental Policy Act.
"And that's a federal rule, so it comes across the whole country no matter where he decides to move his plants," she added.
Existing federal laws from the EPA and Department of Interior could be relaxed, Blanchard said.
"If Trump were in the White House, he would control the EPA, the head of the EPA, and they could also amend those regulations to make the permitting for Clean Water Act requirements easier," she said. "Same is true for the Endangered Species Act right now."
Musk didn't respond to a request for comment for this story.
Some agencies — called independent agencies — have statutory independence from the executive branch. The Securities and Exchange Commission, which has overseen numerous investigations into Musk and his companies over the years, is one of them. The president can't fire any of the five commissioners who oversee the FEC, and no more than three of them may belong to the same political party.
However, the conservative legal movement has waged a long war against the laws granting these agencies independence. And if Trump is president and Republicans control Congress, they could pass laws that give the president more authority over these agencies. The SEC's ongoing investigation into Musk's purchase of Twitter — now X — could go under Trump's control if Republicans get their way, Gerhardt said,
"The probe is tied up with the independence of the agency," Gerhardt said. "And one thing that I think is clear is that Trump wants to lead a pushback against independent agencies."
Even if a federal agency chooses not to enforce laws and regulations on the books, ordinary people can still bring the government and companies to court to force them to follow the law. Blanchard brought cases against the first Trump administration as the director of Lawyers For Good Government's climate change program to keep the EPA and Interior Department on notice.
But that still effectively transfers enforcement power from taxpayer-funded government to less-resourced private citizens.
"It's going to be up to the individuals to be able to bring those private rights of action if the federal agencies won't enforce their existing laws," Blanchard said.
