Elon Musk’s Global Empire Has Made Him A Burning Problem For Washington

Argentina was headed toward its thrilling victory over France at the World Cup in Qatar, and Elon Musk, the Tesla Inc. 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, Biden administration 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 Inc. in October for $44 billion, Musk now controls five companies sprawling across the transportation, aerospace, health, telecommunications and social-media sectors. All of them 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.

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 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.

“A shameful case of weaponization of a government agency for political purposes and suppression of the truth!” Musk posted March 7 on Twitter.

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 defense 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 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 largess of the Communist Party than Elon Musk,” Senator Mark Warner, a Virginia Democrat who chairs the Intelligence Committee, said in an interview in New York 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.

Growing empire

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 Justice Department, SEC and National Highway Traffic Safety Administration have subjected the company’s automated-driving claims to greater scrutiny.

The approach has been akin to Whac-a-Mole, with regulators reacting to missteps and violations by Musk’s companies after they happen.

“I really try to make this a matter of calling balls and strikes,” Transportation Secretary Pete Buttigieg said in an interview with Bloomberg editors and reporters March 13. “When they do the right thing, we’re gonna lift that up, and when they don’t — or when there’s a problem as a regulator — we will be there to make sure that, that people are taken care of.”

But Buttigieg, one of the most unflappable politicians in the Biden administration, spoke haltingly when asked more directly about Musk, including whether his views of the entrepeneur have changed.

“I really try to separate the …” He paused for more than 10 seconds. “Things people pay a lot of attention to, from the things I need to pay the most attention to.”

The Transportation Department’s job isn’t to trust the companies it regulates, he added. “It’s to oversee them when it comes to compliance and then to try to partner with them when we can get something good done together.”

Some administration officials have speculated that the government may someday need to break up Musk’s empire as it did John D. Rockefeller’s more than a century ago. But US courts have for decades mostly frowned on trust-busting.

Instead, some in the administration have weighed whether to subject his Twitter purchase to review by a secretive interagency 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. The prospect that those investors gained access to Twitter user data has caused anxiety across the US government’s national security apparatus and intelligence community, according to multiple people familiar with the matter.

Any such move would carry political risk for Biden. 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 lawmaker’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, who has advocated for a CFIUS review. “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.

Elon Musk is planning to build his own town on part of thousands of acres of newly purchased pasture and farmland outside the Texas capital, according to deeds and other land records and people familiar with the project.

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1 COMMENT

  1. Musk is doing all the right things. Most of all , pushing back against an bizarre new brand of radical “progressive” elite who seem to be operating in a godless paradigm of unwitting tribalism, ego-based emotion, and paranoia. The reality is that relations with Russia and China should be COOPERATIVE , not adversarial. How this is not obvious to the so-called “liberal order” is astonishing, since it used to be one of their objectives. Now we just have to hope that they don’t destroy all chances of this happening.

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