Elon Musk and Vivek Ramaswamy may be exempt from ethics rules as Trump's advisors

President-elect Donald Trump’s plan to use an outside advisory committee led by Elon Musk and Vivek Ramaswamy to cut federal spending is raising eyebrows among ethics-law experts who say its leaders won’t be subject to the same laws as Trump's nominees to the Cabinet and other top jobs.

The group, called the Department of Government Efficiency, would devise plans to rollback federal regulations and reduce agency budgets, according to Musk and Ramaswamy ? both of whom are wealthy businessmen who would not take paid government jobs. The pair are meeting with lawmakers Thursday on Capitol Hill.

"President Trump has asked the two of us to lead a newly formed Department of Government Efficiency, or DOGE, to cut the federal government down to size," Musk and Ramaswamy recently wrote in The Wall Street Journal.

Such responsibilities usually fall to full-time White House employees who have to abide by conflict of interest standards and disclose their financial interests, either publicly or confidentially, depending on the person’s role, according to Kathleen Clark, a professor of law for Washington University in St. Louis. Outside advisers have no such requirement.

“It’s as though Musk and Ramaswamy are cosplaying government officials,” Clark said. “It looks like the transition team is intentionally blurring the line between what’s inside and outside of government so that Musk and Ramaswamy will be able to have a great deal of influence.”

Musk's companies have received nearly $20 billion in government contracts and both he and Ramaswamy have complained about how federal regulators have hampered their businesses.

"The danger," said Bryant Walker Smith, a professor of law at the University of South Carolina, "is a number of agencies could conceivably be told to lay off, or where it might be intuited if not directly told."

Brian Hughes, a spokesman for Trump’s transition team, issued in a statement in response to USA TODAY's questions about conflicts of interest at the department.

“Under President Trump’s leadership, the government efficiency effort led by Vivek and Elon will target waste and fraud throughout our massive federal bureaucracy," Hughes said. "They will work together slashing excess regulations, cutting wasteful expenditures, and restructuring federal agencies.”

Tricia McLaughlin, a spokesperson for Ramaswamy, told USA TODAY, "The team is committed to making sure all DOGE activities are conducted properly and in full compliance with ethical and legal requirements." Musk did not respond to USA TODAY’s request before press time.

Musk and Ramaswamy

Musk is the richest man in the world, with an estimated net worth of $333.8 billion, according to Forbes. His companies are major government contractors, taking in nearly $20 billion over the past 16 years, according to a USA TODAY analysis. Over the past decade, SpaceX alone received $14.4 billion from NASA and $5.3 billion from the Department of Defense, the analysis found. A New York Times analysis found that Musk’s companies had nearly 100 contracts with 17 federal agencies, totaling $3 billion.

The Department of Justice sued SpaceX in 2022 for discriminating against refugees and asylees. The company has also had frequent run-ins with the Occupational Safety and Health Administration. An investigation by Reuters uncovered 600 unreported injuries at SpaceX between 2014 and 2023. SpaceX did not immediately respond to requests for comment.

Tesla, Musk’s electric car maker, has received $41.9 million in federal contracts since 2008, including $13.6 million from the National Oceanic and Atmospheric Administration, $10.8 million from NASA and $9 million from the Department of Defense. Since 2010, the company has been the biggest beneficiary of federal tax credits on electric vehicle purchases.

Musk said on X in September that incentives represent “a minor part of our revenue” at Tesla and are dwarfed by subsidies to oil and gas industry. “SpaceX gets no subsidies and received half as much as Boeing for astronaut transport, but did 100% of the work,” he also said.

Tesla issues frequent recalls published by the National Highway Traffic Safety Administration, including 125,000 vehicles in May. The company did not immediately respond to requests for comment.

In September, the Federal Aviation Administration proposed $633,009 in civil penalties for SpaceX after it used an unapproved launch control room for a launch in June and an unapproved rocket propellant farm for a launch in July. The company derided regulators in a lengthy blog post. Musk personally responded by declaring he plans to sue the Aviation Administration for “regulatory overreach.”

USA TODAY reached out to Tesla and SpaceX for comment but did not receive a response before press time.

Reid Hoffman, the venture capitalist who co-founded LinkedIn, wrote in the Financial Times that Musk’s ownership in a startup called xAI combined with his broad advisory position with Trump creates “a serious conflict of interest in terms of setting federal AI policies for all US companies.”

Ramaswamy founded Roivant Services, which owns several drugs approved by the Food and Drug Administration, but he stepped down when he was pursuing the presidential nomination. He lists himself on LinkedIn as the co-founder of the Ohio-based investment firm Strive Asset Management.

"My best advice to you is, if you're evaluating somebody's advice, you got to look at whatever their self interest is in evaluating that advice, right?" Ramaswamy said at the Aspen Security Forum in Washington, D.C. "That includes me."

He said he filled out financial disclosure forms when he was a presidential candidate, and encouraged people to look at them. "I believe we have to do everything in the obviously proper, legal, ethical, compliant way," he said.

What ethics rules would require

Cabinet secretaries are required to fill out a form disclosing how much money they make, the value of what they own, the amount of debts they owe, and the gifts the receive. They fill out the same information for their spouses and dependent children, if they have them, and the document is a public record. Lower-level government employees fill out similar information on a confidential form.

Federal law prohibits government officials from participating in activities that affect their financial interests, and a person prosecuted under the law could face up to five years in prison. Many people choose to divest from instead of having to recuse themselves or risking running afoul of the law, Clark said, but the law doesn’t require divestment.

Many people in the private sector work on federal advisory committees a few days a year, or a few months a year, but are considered special government employees, Clark said. Those employees “must comply with applicable conflict of interest laws, standards of conduct rules, and financial disclosure requirements,” according to a 2005 memo from the Office of Government Ethics.

However, government ethics rules don’t apply to people serving on advisory committees who do not qualify as special government employees, the ethics memo says. That means they don’t have to disclose their interests, publicly or confidentially.

The Trump transition team did not say whether the Department of Government Efficiency would be a federal department or an advisory council, and did not say whether the people who work there would be government employees. Ramaswamy said Wednesday: "We're outside government. That's different from when people are inside government."

Richard Briffault, a professor of legislation at Columbia Law School, said presidents do bring in advisers from the private sector to give advice on policies that affect their specific industries. That’s the logic behind not subjecting the advisory committee members who are not government employees to ethics standards, he said.

“The assumption is you’re bringing in people actually in from the industries to give advice on policies, and you know they’re conflicted, but you want to hear them,” Briffault said. But he said the wide-ranging scope of DOGE “takes it to a level far greater than any other advisory committee.”

A previous Trump outside adviser created controversy

During Trump’s first term, he leaned on billionaire investor Carl Icahn as an outside adviser about regulatory reform. During his tenure, Bloomberg News article reported an Icahn proposal to restructure a U.S. biofuel program boosted the share price of a company in which Icahn was the majority owner. The situation led to ethics questions about whether Icahn should be considered an internal employee or not. He stepped down less than a year into the administration.

“It wasn’t really very clear,” Clark said. “Was he a government official? Was he not a government official? They tried to say that he had a lot of influence. Ultimately, it was untenable.”

Contributing: Rachel Barber, Francesca Chambers, Nick Penzenstadler

This article originally appeared on USA TODAY: Musk, Ramaswamy may not be subject to ethics rules