Musk’s Starlink Agreement with the FAA Sparks Fresh Concerns Over Conflicts of Interest

Overview

Elon Musk’s extensive federal contracts may increase significantly as reports suggest his company, Starlink, is close to finalizing a $2.4 billion deal with the FAA. This development raises eyebrows regarding possible conflicts of interest involving Musk’s various enterprises and his role as a cost-cutting leader under President Donald Trump.

Elon Musk, the head of the Department of Government Efficiency, addresses the first cabinet meeting of … [+] President Donald J. Trump’s second term on February 26, 2025, in Washington, DC. (Photo by Jabin Botsford/The Washington Post via Getty Images)

The Washington Post via Getty Images

Essential Insights

The Federal Aviation Administration is evaluating a potential contract to utilize Starlink’s internet service for its air traffic control communications, which could replace a contract previously awarded to Verizon in 2023, as reported by multiple sources.

SpaceX is said to have already dispatched some terminals to the FAA, with Musk asserting that the equipment was provided “without cost to taxpayers on an emergency basis.”

This contract would contribute to the $30 billion in public funding Tesla and SpaceX have accrued over the last 15 years, as noted in a Forbes analysis, which includes contracts with NASA for rocket launches.

While Musk’s involvement in the FAA-Starlink agreement remains uncertain, the ongoing arrangement has elicited concerns from ethics watchdogs regarding potential favoritism, especially given Musk’s leadership of the Department of Government Efficiency during a major federal downsizing project.

The FAA, along with other agencies impacted by Musk’s planned layoffs, regulates his companies and has previously alleged violations against them, including Musk-owned firms.

The White House has classified Musk as a “special government employee,” a designation that restricts him from “personally and substantially” participating in any government matters that could influence his financial interests, according to federal statutes.

Additionally, the Federal Acquisition Regulation prohibits contracts from being awarded to “government employees” or entities “controlled by government employees,” though exceptions exist for experts and advisors unless they hold positions that could sway the contract outcome.

Expert Opinions on Musk’s Federal Contracts

Noah Bookbinder, president of Citizens for Responsibility and Ethics in Washington, remarked to Forbes that Starlink’s collaboration with the FAA raises “significant potential for a conflict” and an “appearance of impropriety,” unless Musk explicitly states he has no involvement or bias in the process. He expressed concerns about the FAA deal’s implications for public safety, emphasizing uncertainty around Musk’s decision-making influence regarding DOGE’s engagement with the FAA. Norman Eisen, a senior fellow at the Brookings Institution and legal representative for recent whistleblowers at the U.S. Agency for International Development, has highlighted Musk’s government role and his companies’ benefits as a source of profound ethical dilemmas. Eisen noted, “When wealthy individuals financially support political candidates and subsequently gain influential governmental positions, we define that as oligarchy.” Richard Painter, a law professor and vocal critic of Trump, pointed out that Musk’s federal role falls under laws governing special government employees, while consumer advocate Craig Holman noted that Musk’s businesses face federal oversight from agencies he aims to restructure.

Current Status of Starlink’s FAA Engagement

This month, Musk authorized the shipment of 4,000 Starlink terminals to the FAA, as reported by Bloomberg, with one terminal already installed in the FAA’s air traffic control technology lab for testing purposes. An FAA spokesperson acknowledged to Bloomberg that the agency is evaluating the system in New Jersey and that Starlink is being considered to enhance communications, especially in regions prone to connectivity challenges, such as Alaska. Notably, SpaceX staff are reportedly working inside the FAA and possess official FAA email addresses. Musk criticized the Verizon system on social media, claiming it endangers air travelers; however, he later clarified that the previous system was from L3Harris Technologies and the Verizon system has yet to be implemented. A Verizon spokesperson defended their ongoing efforts, stating the company is in the early stages of a multi-year contract to modernize outdated systems.

Overview of Musk’s Government Contracts

Over the past 15 years, Tesla and SpaceX have garnered approximately $30 billion in federal funding, as highlighted by a Forbes report. This funding includes about $22 billion in contracts awarded to SpaceX by NASA and the Department of Defense, in addition to over $11 billion in regulatory credits that Tesla has sold to other auto manufacturers for meeting emissions standards. The federal government provided an initial loan of $465 million to Tesla in 2009 to purchase its inaugural California factory.

Musk’s Role within the Federal Government

Musk is classified as a “special government employee” and will not receive compensation for his government work, according to reports from CNN. These employees can work up to 130 days annually and must adhere to most federal employee standards, though some restrictions, particularly concerning conflicts of interest, are typically less stringent due to the temporary nature of their roles. Furthermore, they cannot engage in matters that could impact their affiliated organizations or leverage their positions to influence elections.

Official Responses Regarding Musk’s Contracts

White House spokesperson Harrison Fields assured the Washington Post that all contracts associated with Musk’s lucrative ventures will adhere to established government ethics regulations concerning conflicts of interest. White House Press Secretary Karoline Leavitt affirmed that Musk would be responsible for addressing his own potential conflicts of interest and would recuse himself when his business dealings coincide with his responsibilities at DOGE.