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In between the Cabinet nominations that President-elect Donald Trump announced this past week was an unusual appointment: Elon Musk and Vivek Ramaswamy will lead a newly created Department of Government Efficiency . While Trump has not detailed how the entity will operate, he said in a statement that it would "slash excess regulations, cut wasteful expenditures and restructure federal agencies" and "provide advice and guidance from outside of government." Conventionally, what outsiders can do in the government has been pretty limited.
But with Trump and Musk both known for pushing boundaries, it's not clear what "DOGE" will look like. The federal code's primary conflict-of-interest law is a big deterrent to adopting government authority. It bans government employees from participating in government matters in which they have a financial stake.
But it doesn't apply to outside contractors or advisers, which could be important to Musk, whose businesses interact with many federal agencies and who would most likely be required to make divestments if he became a federal employee. Things get complicated if an outsider acts on behalf of the government. Just saying you're not a government employee doesn't mean the law will treat you that way, even if you're not paid.
Acting like a government employee -- for example, by managing government employees -- may open the door to being charged with a felony under the conflict-of-interest law. Finance Startup Fundraising: Essential Tactics for Securing Capital By - Dr. Anu Khanchandani, Startup Coach with more than 25 years of experience View Program Finance Financial Literacy i.
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Virtually all government employees either recuse themselves from matters that could affect their finances or divest from those assets. But there is a third option: The president can grant a waiver, though Painter said such waivers are extremely rare. It wouldn't be the first time Trump departed from precedent, and it could allow Musk to become part of the government without making divestments.
DOGE doesn't necessarily need to step over the line to be extremely influential. "The president is entitled to seek advice from people who he thinks give him good advice," said Richard Briffault, a Columbia University law professor. For Musk to steer clear of the conflict-of-interest law, his recommendations would need to be translated by Congress, which controls the federal budget; by the president; or by others with the authority to act on them.
Ramaswamy has said he believes that the president has the power to fire 75% of government workers. The setup isn't new -- in 1982, President Ronald Reagan appointed an outside commission to write a report on how the government could cut costs -- but Musk's level of influence might be unprecedented. He has already become one of the most influential figures in Trump's orbit, sitting in on job interviews and attending at least one national security meeting.
Official advisory committees are subject to specific rules. For example, they're required to make hearings open to the public and abide by transparency rules. It's not clear if DOGE will reach the level of formality that would make it subject to those rules.
Even if they don't face a potential felony, outsiders face pressure to avoid conflicts of interest. Carl Icahn, who as a special adviser to the first Trump administration was not subject to the conflict-of-interest law, left his role after concerns arose that his strong views on environmental regulations could have benefited some of his investments. (You can now subscribe to our Economic Times WhatsApp channel ).
