Musk’s 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 recognize 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, 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 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.” Bloomberg