Antitrust Uncertainty

Tariffs are not the only area of Trump’s economic policy causing confusion in the business world. Corporate executives, investment bankers, and others are struggling to make sense of the administration’s stance on antitrust matters.

At first, it seemed that antitrust would come under assault as part of Trump’s broad offensive against regulation. Project 2025 included a plan for dismantling the Federal Trade Commission, which shares responsibility in this field with the Antitrust Division of the Justice Department. Trump wasted no time in naming Republican commissioner Andrew Ferguson to chair the agency, replacing Lina Khan, who had taken an aggressive approach toward enforcement. Trump subsequently fired the remaining two Democratic commissioners.

Trump’s choice to head the Antitrust Division, Abigail Slater, had earlier in her career been an FTC staff lawyer but then worked for the Internet Association, Big Tech’s trade group. During the first Trump Administration, she served on the National Economic Council and went on to become a policy adviser to JD Vance while he was in the Senate. She was presented as an antitrust hardliner.

Under Ferguson’s leadership, the FTC has seemingly gone in two directions. On the one hand, it seems to have cut back its enforcement activity and has announced only one significant penalty action. At the same time, it has been pursuing a lawsuit originally filed in 2021 accusing Meta Platforms of using unlawful means to crush competition to its social media services.

There has also been ambiguity at the Antitrust Division. It has also announced little in the way of penalties, yet it continued a major lawsuit against Google and recently won a major court ruling that the search engine company has maintained an illegal monopoly over online advertising technology.

The FTC and the DOJ also have the power to block mergers that would improperly limit competition. Surprisingly, the agencies said in February that they would continue to follow the merger guidelines adopted during the Biden Administration. Yet the application of those guidelines have been uneven.

The DOJ sued to block Hewlett Packard Enterprise’s acquisition of Juniper Networks. Capital One’s $35 billion takeover of Discover Financial Services was allowed to proceed. It is unclear whether there will be objections to Google’s proposed $32 billion purchase of the cloud security company Wiz.

The uncertainty over merger policy, together with the tariff chaos, has led to a drop-off in deals. This is bad news for investment bankers and transaction attorneys but not the worst thing for the country.

Overall, the Trump Administration’s antitrust policy has been a lot less harmful than the slash and burn approach to regulatory agencies such as the Consumer Financial Protection Bureau and the Environmental Protection Agency.

It is notable that the more aggressive actions are directed against a single sector: Big Tech. The efforts of tech executives such as Mark Zuckerberg to ingratiate themselves with the Trump Administration have not paid off.

Although some MAGA figures have promoted the tough-on-tech approach for policy reasons, when it comes to Trump himself, the motivations are probably more personal. He has long harbored resentment against Facebook for banning him in the wake of the January 6 riots. And he complained that Google search results supposedly favor his critics.

Since Trump’s antitrust policies may depend on his whims, they are ultimately unreliable. As with trade, uncertainty will likely remain the order of the day.

Enforcement Inaction

The Trump Administration has declared war on business regulation, both overtly and covertly. Most visible has been the barrage of executive orders that cripple or eliminate rules without going through the normal review procedures. Since the beginning of this month, Trump has put his Sharpie to orders that instruct agencies to unilaterally repeal regulations they deem unlawful and to insert sunset provisions into others.

There is also a quiet form of deregulation stemming from the fact that many agencies have scaled back their enforcement activities. It is difficult to determine how much of this is being caused by operational disruptions linked to DOGE-instigated layoffs and how much stems from deliberate decisions to abandon cases, but the result is a sharp drop-off in the number of announced fines and settlements.

Let’s focus on the agencies that normally handle the biggest cases. Not surprisingly, the most dramatic decline has come at the Consumer Financial Protection Bureau, which Elon Musk has targeted for elimination. Since Trump took office, the agency has announced only one new resolved case. On January 30 the payment service Wise was ordered to pay a $2 million fine for misleading customers.  Since then, instead of new penalties, the agency has issued press releases about “regulatory relief” as well as a remarkable statement which criticized an anti-redlining action brought by the agency during the Biden Administration. In November, the CFPB had fined Townstone Financial $105,000 to settle allegations that the firm discouraged African Americans from applying for mortgages. Calling that case “abusive” and “unjust,” Acting CFPB Director Russ Vought vacated the settlement and returned the $105,000 to Townstone.

Since the inauguration, the Securities and Exchange Commission has announced only about a dozen resolved cases against companies. During the same period (January 20-April 16) of last year, the SEC announced more than 40 penalties. There is also a disparity in the amounts recovered. During that period last year, the average penalty was above $8 million; this year it has been about $2 million. Last year’s defendants included major companies such as Volkswagen and U.S. Bancorp; this year’s list includes much smaller firms.

The caseload at the Federal Trade Commission has also been low. Since January 20 it has announced only two penalties—one for $193,000 and another for $17 million. During the same period last year, the agency announced 11 penalties totaling more than $350 million. These are only cases with monetary sanctions, unlike the current lawsuit being pursued by the FTC against Meta Platforms, which, if successful, would likely result in structural changes at the company.

The situation at the Justice Department is more mixed. Combining both main Justice and the U.S. Attorneys Offices around the country, there have been nearly 70 announcements of penalties against businesses.

More than 50 of these actions were brought under the False Claims Act, the law designed to combat cheating by federal contractors, including healthcare companies dealing with Medicare and other Medicaid. Very few cases were brought in many of the other categories DOJ normally covers.

It is encouraging that DOJ is still paying attention to contractor abuse, but it is ironic that this is happening at the same time DOGE has been largely ignoring that abuse in its purported campaign to combat fraud at federal agencies. Perhaps the remaining righteous prosecutors at DOJ should teach Elon Musk where to look.

From Pro Bono to Pro Malo

When lawyers do pro bono work, it is assumed they are helping a worthy cause. Donald Trump has twisted this concept and made it part of his effort to punish law firms he views as enemies while furthering his retrograde environmental policies. He has created what amounts to pro malo publico—an activity that that promotes a public evil.

At a White House event during which Trump signed several executive orders promoting greater domestic coal production and consumption, he announced plans to pressure law firms to provide free legal services to coal companies to assist in leasing and other issues.

The firms involved would include those that have made deals with Trump to avoid punitive measures he threatened to impose on them because they represented Trump’s perceived enemies. As part of those deals, firms such as Paul Weiss and Skadden Arps agreed to provide pro bono services worth hundreds of millions of dollars. It was widely assumed these services would go to non-profit organizations, presumably with an emphasis on those with a pro-MAGA orientation.

Now Trump is taking the outlandish position that the recipients should include for-profit corporations. There is perhaps no industry less deserving of special assistance than coal. Much of the world is moving away from the black rock because of its outsized contribution to global warming and other forms of pollution.

Trump, who had made coal a centerpiece of his 2016 presidential campaign but was not able to do much to stem the industry’s decline, is now trying again. In doing so, he is seeking to prop up a sector whose harms are not limited to exacerbation of the climate crisis.

Among the largest producers is Core Natural Resources, the result of the 2024 merger of Arch Resources and CONSOL Energy. In Violation Tracker these companies account for more than $230 million in fines and settlements from some 800 enforcement actions relating to environmental and workplace safety infringements.

Another repeat offender is James C. Justice Companies, whose namesake is now a U.S. senator from West Virginia. While Jim Justice was still in charge, the company racked up hundreds of safety violations and resisted paying millions of dollars in federal and state safety fines. In 2016 an NPR investigation concluded that Justice’s company was “the nation’s top mine safety delinquent.” Sen. Justice was one of the attendees at Trump’s signing event.

At that event, Trump vowed “to identify and fight every single unconstitutional state or local regulation that’s putting our coal miners out of business.” It seems likely that the law firms being dragooned into serving the coal producers will end up helping to challenge these rules.

We need not express any concern for the lawyers. Skadden and other firms that have made deals with Trump have represented coal clients in the past. The bigger problem is that a group of companies doing great harm will be receiving an indirect subsidy in the form of free legal services—and the result could be a weakening of environmental and workplace safeguards. In other words, pro malo publico.

The Other U.S.-EU Economic Conflict

Tariffs are not the only economic arena in which the United States and Europe are at loggerheads. The Trump Administration and the European Union are coming to blows with regard to the oversight of business.

Trump, of course, is on a rampage against corporate regulation, especially when it comes to the environment and cryptocurrency. Rules are being slashed and enforcement is being reduced to the bare minimum. The one way in which Trump is coming down hard on business is his move to get companies to abandon anything that smacks of diversity and equity.

Now the administration is trying to export its anti-DEI crusade to Europe. The French newspaper Le Figaro recently reported that the American embassy in Paris sent letters to local companies demanding that they renounce DEI as a condition of doing business with the U.S. government. It later came out that similar letters were issued by the U.S. embassies in countries such as Belgium, Italy, and Spain.

European government officials have condemned the effort, accusing the Trump Administration of trying to impose its domestic culture war values on other countries. This critique of ideological imperialism is strong even in France, which tries to ignore race and has largely shunned DEI.

While the U.S. is promoting this frivolous oversight of foreign companies, Europe is getting tougher in its serious regulation of American corporations, especially the tech giants. The French antitrust authority just fined Apple 150 million euros for using a privacy feature in an anti-competitive manner. Last year the European Commission fined the company 1.8 billion euros for abusing its dominant position in the market for the distribution of music streaming apps and ordered Apple to repay 13 billion euros in improper tax breaks it received from Ireland.

An Italian court recently ordered Google to pay 326 million euros to resolve allegations it failed to pay proper taxes on its earnings. The company is still fighting a 4 billion euro fine imposed by the EU in 2018 for placing illegal restrictions on Android device manufacturers and mobile network operators to cement its dominant position in internet search market.

Last year the EU fined Meta Platforms nearly 800 million euros for imposing unfair trading conditions on other online classified ads service providers. Microsoft’s LinkedIn service was fined 310 million euros by the Irish Data Protection Commission for improper processing of personal data for the purposes of behavioral analysis and targeted advertising. Numerous other cases can be found by searching Violation Tracker Global.

Trump has taken note of such cases, and his new tariffs on EU countries are likely in part a form of retaliation. Yet there are no signs Europe is being cowed. In fact, the EU is expected to include regulatory measures against U.S. tech and financial companies in its response to Trump’s trade offensive.

While they may have misgivings about tariffs, U.S. companies seem inclined to seek help from the Trump Administration with their EU regulatory problems. The Wall Street Journal just reported that Mark Zuckerberg is lobbying U.S. officials to respond strongly to an expected EU ruling against Meta Platforms.

Zuckerberg is wasting his time. The Trump Administration is in no position to thwart EU enforcement actions. Everything it does only hardens Europe’s resistance.

A Gift to Money Launderers

Donald Trump wants to be seen as a law and order president. He is riding roughshod over due process to send purported Venezuelan gang members to a supermax prison in El Salvador, and he muses about doing the same with those who vandalize Tesla dealerships.

Yet when it comes to another group of miscreants, the Trump Administration turns softhearted. During the past two months, the federal government has adopted various kinds of leniency for corporate and white collar lawbreakers. The Justice Department has suspended enforcement of the Foreign Corrupt Practices Act. DOJ and the SEC have abandoned numerous investigations of corporate misconduct. The Consumer Financial Protection Bureau is being dismantled. The EPA is being neutered.

Most recently, the Treasury Department announced it would not enforce the beneficial ownership reporting provisions of the Corporate Transparency Act (CTA) with regard to domestic companies. Treasury Secretary Scott Bessent called the move “a victory for common sense.”

Actually, it is a victory for money launderers. The CTA was enacted to address the problem of illicit money flows around the world. Opponents have been seeking to undo the CTA since its enactment in 2021. Their legal challenges appeared to be succeeding until the Supreme Court upheld the law earlier this year. Now the Treasury Department’s Financial Crime Enforcement Network (FinCEN) is using administrative procedures to severely restrict the scope of the law. As a result, the number of entities expected to report beneficial ownership will plunge from an estimated 32 million to about 20,000.

By exempting domestic entities from the CTA’s reporting requirements, FinCEN would have us believe that money laundering is primarily a problem outside the United States. One has only to look at the cases brought by FinCEN itself to see this is false.

As Violation Tracker documents, FinCEN has collected hundreds of millions of dollars in fines and settlements from U.S. financial institutions for offenses related to money laundering. For example, in 2021 Capital One paid $290 million to resolve allegations that its check cashing group failed to establish and maintain an effective anti-money laundering (AML) program.

U.S. casinos have also been penalized by FinCEN. One of those was the Trump Taj Mahal in Atlantic City. In 1998 the property, then still controlled by Trump, was fined $477,000 for currency transaction reporting violations. The Taj Mahal subsequently received numerous warnings about such issues, and in 2015, by which time it was controlled by Carl Icahn, the casino was fined $10 million for willful and repeated violations of the Bank Secrecy Act.

Scores of other AML cases have been brought against U.S. companies by the Justice Department. These include a $586 million settlement paid by Western Union on charges of willfully failing to maintain an effective AML program and aiding and abetting wire fraud. This case and numerous others involved criminal charges that were usually resolved with a non-prosecution or deferred prosecution leniency agreement.

Many other domestic AML enforcement actions have been brought by bank regulators—including the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation—as well as the SEC, the Commodity Futures Trading Commission and state attorneys general.

In other words, money laundering and AML deficiencies are very much a domestic problem which will now grow only worse with the undermining of the Corporate Transparency Act.

Looking for Fraud in All the Wrong Places

Elon Musk and his DOGE marauders claim that fraud is rampant in federal agencies ranging from USAID to the Social Security Administration, yet they can never seem to prove it. The Wall of Receipts website, which purports to document savings DOGE has achieved, is now a laughingstock because of its repeated errors and falsifications.

DOGE would have us believe it is the first effort to address federal fraud. In fact, a variety of groups inside and outside the government have been combatting the phenomenon for decades. For example, in the 1980s, when Musk was still a teenager in South Africa and his DOGE staffers where not yet born, the Pentagon was found to be a hotbed of procurement fraud.

Unlike now, when federal staffers are being falsely accused of misconduct, the main culprits back then were recognized to be the big military contractors cheating Uncle Sam out of millions.

When the DOGE effort first took off, many observers assumed that major contractors would be targeted. Booz Allen and Leidos, which rake in billions each year from federal contracts for management consulting and technology services, saw their stock price plunge.

Leidos seemed to be in the DOGE crosshairs when the Wall of Receipts posted an item claiming a savings of $231 million from a $1 billion contract with the Social Security Administration. But that turned out to be one of DOGE’s blunders: the cancellation involved only a $560,000 sliver of the contract.

Now there is a growing sense that the contractors have little to worry about. A recent article in the New York Times headlined (in the print edition) “Budget Ax May Benefit Contractors” reported that the Veterans Administration, which had been planning to cancel 850 contracts with companies such as Leidos, has dropped that idea. In fact, in the wake of moves to eliminate 80,000 VA staff positions, experts interviewed by the Times said it was likely the agency would have to make greater use of contractors to maintain essential services.

In other words, DOGE’s purported promotion of government efficiency may very well result in an acceleration of outsourcing, which tends to raise rather than lower costs. Increased reliance on contractors will also make agencies more, not less, vulnerable to fraud.

Those 1980s abuses are not just a thing of the past. Since 2010, the Department of Justice and other federal agencies have collected $35 billion in fines and settlements from contractors using the False Claims Act and related laws. Booz Allen, for example, has been hit with $393 million in penalties, including a $377 million case in 2023 and $15 million one earlier this year.

Apart from the consulting companies, healthcare corporations account for a large share of the penalty total. The cases involve false billing by hospital chains and other providers to federal programs such as Medicare as well as drug company payment of illegal kickbacks to doctors to get them to prescribe expensive medications.

Pentagon contractors also continue their old tricks. Last year, aerospace companies Sikorsky and Derco, subsidiaries of Lockheed Martin, paid $70 million to resolve allegations they overcharged the Navy for spare parts and materials needed to repair and maintain the primary aircraft used to train naval aviators.

If DOGE were serious about fighting fraud, it would be looking at contractors such as these rather than hunting down supposed DEI abuses and eliminating federal employees whose job it is to prevent corruption.

Slandering Social Security

Having used spurious claims of fraud to justify an assault on scores of federal grants, Donald Trump and Elon Musk are now taking the same approach in targeting entitlements.

In his recent address to Congress, Trump recited a long list of bogus statistics about large numbers of supercentenarians supposedly receiving Social Security benefits. Musk has taken to describing that program as a Ponzi scheme.

Attacks on the legitimacy of Social Security from the Right date back decades, but for a long time they were limited to fringe groups such as the John Birch Society. Public support for the program was strong, even among those who had misgivings about other parts of the social safety net. Social Security was accurately seen as a benefit people had earned through a lifetime of hard work. It made no difference that the system was set up so that payments to current retirees are supported by taxes paid by those still in the labor force.

Starting in the 1990s, a new form of criticism emerged based on the argument that the system was unsustainable, given demographic changes affecting the ratio of workers to retirees. Conservatives began to claim that the program would eventually collapse, even though Congress had the power to adjust taxes and benefits to shore up the system.

Thus emerged the effort to transform Social Security from a social insurance program into something more akin to a private pension plan. In the 2000 presidential race, George W. Bush advocated partial privatization in the form of individual retirement accounts that could be invested in stocks and bonds.

Pounding away at the idea that Social Security was headed toward bankruptcy, Bush ramped up the effort after he was reelected in 2004. The public resoundingly rejected privatization, and Republicans paid a significant price in the 2006 mid-term elections.

Although Bush made many mistakes in his attempt to reshape Social Security, he never questioned the legitimacy of the system. In his 2005 State of Union address, which was largely devoted to the issue, Bush described Social Security as “one of America’s most important institutions, a symbol of the trust between generations” and “a great moral success of the 20th Century.” He emphasized that the current system was “sound and fiscally strong,” raising concerns only about its future condition.

Compare this to the slanderous comments of Trump and Musk, who are attempting to depict Social Security as being in complete disarray now. Especially preposterous is their claim that the Social Security Administration is rife with fraud and waste.

Although it is burdened with much aging technology, the SSA is well run. Administrative costs are only one half of one percent. A report published last year by the agency’s inspector general pointed out that less than 1 percent of its payments were improper. And much of that limited amount resulted from the failure of recipients of disability and Supplemental Security Income benefits to report changes in their eligibility status.

Moreover, the report discussed the ways in which SSA seeks to recover improper payments. It pointed out that systems modernization would help greatly in the process.

Instead of addressing the technology problem, Musk and his DOGE crew are moving to eliminate thousands of SSA jobs. This will only increase the level of improper payments and hinder recovery efforts.

It seems likely Trump and Musk are seeking to cripple both the SSA and Social Security itself to set the stage for their own privatization initiative. Chances are this will end as badly as Bush’s effort. The question is how much damage will be done in the process.

Toxic Gaslighting

Donald Trump loves gas. In his address to Congress he bragged about a natural gas pipeline project in Alaska that he claimed will involve trillions of dollars in investment.

Trump also loves gaslighting. His speech contained many statements divorced from reality, but perhaps the most egregious was his attempt to depict his administration as working “to get toxins out of our environment, poisons out of our food supply, and keep our children healthy and strong.”

This came not long after Trump boasted about freezing new regulations and declaring that no new rule could be adopted without eliminating ten existing ones.

When Trump chose Lee Zeldin to run the EPA there was a glimmer of hope the former Congressman who once worked with conservationists would respect the mission of the agency. Yet it turned out Zeldin is perfectly willing to be Trump’s hatchetman. He has gone along with the simultaneous attack on renewable energy and unleashing of fossil fuel projects.

Zeldin is also inviting numerous foxes into the henhouse. This threatens not only climate policies but also the EPA’s efforts to control the very same toxics Trump just vowed to eliminate. Two of those foxes were brought in from the American Chemistry Council, the chemical industry’s leading trade association. They are Nancy Beck and Ann Dekleva, both of whom were put in key positions in the EPA’s Office of Chemical Safety. Dekleva, who worked for three decades at chemical giant DuPont, is known for her role in fighting EPA regulation of the carcinogen formaldehyde.

Zeldin has brought in a slew of other industry lobbyists through the reverse revolving door to take positions in which they will be overseeing policy affecting their former employers, especially those in the petroleum industry.

As the lobbyists are coming in, large numbers of career EPA employees are being forced out as part of the DOGE blitzkrieg. The Administration is also dismantling the Justice Department’s Environment and Natural Resources Division, which handles cases against polluters that end up in court. Meanwhile, DOJ is reportedly planning to drop a lawsuit alleging that a petrochemical plant in Louisiana operated by Denka Performance Elastomer endangers the residents of the neighboring majority-Black community with its releases of cancer-causing chloroprene.

Cases such as this one had been brought as part of efforts to promote environmental justice, which Trump is abolishing after demonizing it as a form of DEI.

Corporate capture is not limited to the EPA. As Trump was claiming to protect the food supply, the New York Times reported that the new director of the Food and Drug Administration’s food division is a corporate lawyer who represented Abbott Laboratories, a major producer of infant formula, in a lawsuit accusing the company of failing to adequately warn parents that its specialized formula for premature infants was associated with an elevated risk of a deadly bowel condition.

Trump’s far-fetched claims about environmental protection and food safety were not meant to be taken literally. They served as a segue to what came next in the speech: an exaggerated statement about the rise of autism among American children. Trump then vowed that his Administration would find the cause and that HHS Secretary Robert F. Kennedy Jr. would lead the effort.

At this point it became clear that the whole point of the passage about toxins was to signal that RFK Jr. was being given free rein to pursue his anti-vaccine agenda. While virtually all legitimate environmental and food/drug safety initiatives are being crippled, Trump seems willing to allow Kennedy to use the federal government to pursue his obsession. The measles outbreak in Texas is a sign of what is to come as regulation and public health are replaced by conspiracy theories. 

Note: For more on Trump’s abandonment of enforcement actions against polluters and other corporate miscreants, see this new report from Public Citizen.

The DOGE Charade

Donald Trump and Elon Musk keep claiming that their scorched-earth approach to remaking the federal government is made necessary by the prevalence of fraud and waste. Musk’s DOGE attack-squad tabulates its progress on a Wall of Receipts that currently purports to have saved Uncle Sam $65 billion.

That number appears to have been plucked out of thin air. The savings for the 2,300 individual contracts listed on the site add up to only $9.6 billion, and even that amount is shaky. For example, the single biggest savings, $1.9 billion, is attached to a Treasury Department contract that is reported to have ended during the Biden Administration.

DOGE gives no details of any fraud it may have found in the contracts. That is not surprising, since it is impossible to have done a careful examination of that many contracts in such a short amount of time.

Large numbers of the contracts are linked to agencies the Trump Administration is in the process of dismantling. USAID accounts for 246 contracts with total purported savings of $4.2 billion. The Consumer Financial Protection Bureau has 404 listings with savings of $109 million. The Education Department, reported to be headed for the chopping block, has 119 contracts with supposed savings of $659 million.

It seems clear DOGE targeted those contracts because of the agency involved, not any evidence of misconduct. Among the remaining 769 contracts, there are many that seem to be targeted for ideological reasons. They include numerous awards whose descriptions refer to now-taboo areas such as DEI or environmental justice.

There are more than 100 listings for subscriptions, especially for expensive services such as Politico, Bloomberg Law, and Lexis Nexis. Those may not always be worth the cost, but there is nothing corrupt about the need for an agency to have good access to information.

Then there are listings for contracts that have not gone into effect. The second biggest saving amount, $318 million, is attached to an Office of Personnel Management pre-award. How can there be fraud when there is no contractor yet?

DOGE’s list also contains numerous entries with obvious errors. These include instances in which there are two links pointing to different contract awards, making it unclear which one is meant to be included. For example, there is a $149 million savings connected both to a contractor called Advanced Automation Technologies Inc. (for three assistants) and to Airgas USA for refrigerated liquid gases.

By pointing to DOGE’s sloppy work, I do not mean to deny the existence of contract fraud. The problem is that Musk’s people, whether through ignorance or design, are looking in the wrong places. They seem to be ignoring the types of large contractors that have repeatedly been found to have cheated federal agencies.

The classic examples are the big weapons producers. As of now, DOGE lists only $8 million in savings from Defense Department contracts—and those are mainly from DEI awards and subscriptions. The same is true for the Department of Health and Human Services, even though healthcare is a major source of contractor fraud.

What gets forgotten in the claims about fraud coming from Trump and Musk is that the federal government already had a robust system for fighting contractor misconduct. Audits were done by agency inspectors general—who have now been fired by Trump—and prosecutions were launched by the Justice Department using the False Claims Act. Over the past decade, the DOJ has collected about $30 billion in fines and settlements.

That is serious fraud fighting. What we see in DOGE is instead the illusion of an attack on corruption that serves as a smokescreen for the Trump Administration’s scheme to dismantle large portions of the federal government. It remains to be seen how long they can keep up the charade.

Behind the Chaos

Donald Trump and Elon Musk seem gleeful about the chaos they have unleashed on the federal workforce. Claims that the onslaught is designed to root out fraud and waste while promoting efficiency are spurious. The examples of waste offered by DOGE are usually erroneous or trivial, and there is nothing efficient about the way agencies are being ravaged. Nor does it make sense to fire inspectors general, the professionals most skilled at addressing corruption.

Is there any method to the madness? Behind the noise there seem to be two objectives. The first is a new form of deregulation. In the past, corporate-friendly administrations sought to diminish oversight of business by rescinding rules and changing laws.

Trump and Musk are instead trying to achieve those objectives by crippling regulatory bodies. This is happening in part by asserting full control over independent agencies and installing loyalists to oversee them. Even more aggressive is the effort to prevent the agencies from functioning by decimating their staff. Regulations don’t mean much if no one is available to investigate non-compliance and take enforcement action. The administration also seems to be testing whether it can get away with unilaterally closing entire agencies such as the Consumer Financial Protection Bureau without the consent of Congress. This is brute force deregulation.

The second objective is to create opportunities for government contractors. Despite the attempt to depict many government functions as redundant or unnecessary, many of the activities being targeted for large-scale staff reductions are not really expendable. By drastically reducing head count, Trump and Musk are creating conditions under which agencies will have no choice but to outsource more work to the private sector.

It is telling that amid all its fabricated charges about waste and abuse, DOGE focuses very little on the major source of fraud in the federal government: dishonest contractors. When it is functioning normally, the Justice Department spends a good portion of its time going after these companies. Violation Tracker documents 4,000 cases brought under the False Claims Act resulting in more than $60 billion in penalties. And those are just the cases in which the contractor got caught.

At times, Musk targets contracts, but they are usually small outlays related to now-taboo areas such as DEI and environmental justice. If he were serious about addressing fraud, he would be singling out large corporations such as Booz Allen and Centene that have been involved in major false claims cases. Companies such as these are presumably being shielded because they are the ones to which agencies will turn for help in performing the functions their diminished staffs can no longer handle.

In some cases, the DOGE offensive may be paving the way not just for outsourcing but for complete privatization. Among the functions said to be candidates for private sector takeover are FEMA disaster relief, NOAA’s National Weather Service, and the Education Department’s student loan program.

There is nothing new, of course, about presidential efforts to reduce business oversight and increase outsourcing. What’s different is the lawless way Trump and Musk are pursuing these aims. And then there’s the added scandal in the fact that Musk personally stands to gain so much from weakened enforcement and expanded contracting.

It is not yet clear how the DOGE juggernaut can be stopped, but for now it is helpful to look behind the theatrics and see whose interests are being served.