Ethics Rules, or Lack Thereof, that Apply to “Special Government Employees” (SGE) and Elon Musk, in Particular
By Craig Holman, Ph.D.
As the head of the “Department of Government Efficiency” (DOGE) – a governmental advisory entity tucked under the secretive shield of the White House – Elon Musk appears to be directing the policies of the Trump administration when it comes to which agencies and their regulatory authorities shall survive or perish.
Elon Musk, the wealthiest person in the world, with $13 billion in government contracts with the federal government, is vested by Trump with calling the shots. Musk’s business empire is overseen by the same federal agencies that he is now advising about their futures.
The conflicts of interest code (18 U.S.C. §208) normally would require a governmental official to divest of conflicting financial interests or recuse from taking any official actions that could affect those interests. But Musk has been appointed as a “Special Government Employee” (SGE) accorded special privileges from the conflicts of interest code.
Below is a brief description of the conflicts of interest code that apply to SGEs and Musk in particular.
A “special Government employee” is an officer or employee in the executive branch of the Federal Government who is appointed to perform temporary duties, with or without compensation, for a period not to exceed 130 days during any period of 365 consecutive days. 18 U.S.C. §202(a). This status is important because the ethics rules for SGEs are considerably less restrictive than the rules for other Federal employees and officials.
In addition, individuals who provide advice as an “expert or consultant” for a period that is not expected to exceed 130 days serve as a functional equivalent of an SGEs for ethics purposes. Only “true” independent contractors are excluded from the definition.
The laws against bribery (18 U.S.C. §201), compensation for representational services (18 U.S.C. §§203 and 205) and post-employment lobbying (18 U.S.C. §207) generally apply to SGEs in the same manner as regular government employees. However, 18 U.S.C. §208 is the main conflict of interest statute which in language seems to apply similarly to SGEs as other employees, but in practice and in subsequent rules apply quite differently. The conflicts of interest statute prohibit government employees from participating in matters that affect the personal financial interests of themselves, immediate family or organizations or businesses to which they are associated. Usually, employees must divest such conflicting interests or, if divestiture is not practical, recuse from official actions that could affect those interests.
Special government employees are exempt from the divestiture requirements and may participate in matters that directly and substantially affect their financial interests as long as such affect does not have a unique impact on the SGE or the SGE’s former or current employer other than as part of a general industry or class of persons. When an official action by an SGE who serves on an advisory committee may disproportionately affect their financial interests, the supervising authority may grant a waiver from the conflicts of interest statute, in writing, stating that the importance of the services of the SGE outweigh the conflict of interest. 18 U.S.C. §208(b)(3). For SGEs not serving on advisory committees, the standard for granting a waiver is stricter, which then requires the supervising authority to determine that the financial benefit to the SGE is not so substantial as to impact the integrity of the employee’s service. 18 U.S.C. §208(b)(1). In Elon Musk’s case, the supervising authority would be Donald Trump.
Although the precise status of the “Department of Government Efficiency” (DOGE) led by Musk remains unclear, the entity has been created within the Executive Office of the President, which has more lenient rules governing transparency. It is yet unknown whether DOGE should be classified a federal advisory committee subject to FACA’s stricter disclosure rules but weaker conflict of interest rules. Without a doubt, however, the single greatest obstacle to the disclosure and ethics requirements regarding Elon Musk as an SGE is the lack of guidance and enforcement actions taken either by the Attorney General, the relevant Designated Agency Ethics Officer (DAEO) and the Office of Government Ethics (OGE).
The most binding elements of the conflicts of interest statute on SGEs are: (1) the 130-day limit on temporary employment; and (2) waivers may not be granted retroactively. Musk is likely to exceed the temporary employment period after four months, at which point he must be re-designated as a regular employee subject to the strict divestiture and recusal requirements of Section 208, or classified as an outside contractor void of any ethical requirements that apply to government employees. I would expect the Trump administration would choose the latter, as Trump did in his first term for his Operation Warp Speed czar Moncef Slaoui. As an outside consultant, many elements of Musk’s working conditions would have to change, especially no longer being under supervision of Trump and forfeiting his White House office space.
Secondly, a waiver may not be granted today for conflicts of interest taken by Musk yesterday, which I suspect many such conflicts have already occurred.