The Other Corporate Restraints

Donald Trump thinks that young girls should get by with fewer dolls, but there is apparently no limit to the number of regulatory gifts he is offering Corporate America. Long-standing rules are being brushed aside, while laws such as the Foreign Corrupt Practices Act are not being enforced. Entire agencies such as the Consumer Financial Protection Bureau have been put in limbo. Investigations launched by the Biden Administration are being abandoned. Trump even pardoned a cryptocurrency company and its founders fined for anti-money-laundering deficiencies.

Big Business is not, however, escaping all oversight. That’s because there are two areas beyond Trump’s control that are still acting as checks on corporate abuses: state government regulation and private litigation.

The U.S. Justice Department may be focusing more on legitimizing Trump’s acceptance of a $400 million airplane from Qatar, but state prosecutors continue to go after misconduct in the business world. This is true even in red states. The Texas Attorney General’s office recently announced that it is collecting more than $1 billion from Google to settle allegations that the company unlawfully amassed private data on users regarding geolocation, incognito searches, and biometrics.

Hawaii’s AG negotiated a $700 million settlement with Bristol-Myers Squibb and Sanofi, resolving long-running litigation over the safety and efficacy of the blood thinner Plavix.

New Jersey’s AG and its Department of Environmental Protection announced a settlement of up to $450 million with 3M to resolve litigation over the company’s role in contamination of drinking water supplies with toxic PFAS substances, also known as forever chemicals.

Meanwhile in the courts, drug distributors McKesson, Cardinal Health, and Cencora (formerly AmerisourceBergen) together agreed to pay $300 million to a group of employee benefit plans to settle class action litigation alleging they contributed to the opioid epidemic in their marketing of the dangerous drugs.

A state jury in Louisiana recently determined that oil giant Chevron should pay $745 million in damages for harm caused to the coastline over many years of drilling activity. In the latest of a series of antitrust settlements in the meat industry, Tyson Foods and two other companies agreed to pay $64 million to settle allegations they conspired to fix prices on pork products provided to food service providers.

Defying the Trump Administration’s campaign to prohibit any efforts to address systemic racism and sexism, private anti-discrimination lawsuits move forward. Google just agreed to pay $50 million to settle allegations that it paid thousands of black workers less than their white counterparts and limited their opportunities for advancement.

A federal judge in California just granted preliminary approval to a class action settlement in which Walt Disney Company agreed to pay $43 million to resolve allegations that the compensation given to women in middle management was substantially lower than what was received by men in substantially similar jobs.

These are but a few of the steady stream of cases being brought by AGs and class action lawyers. It is far from desirable for the federal government to retreat from its primary role in business oversight. But until that policy shift can be reversed, the states and the courts are making sure that corporate misconduct does not go unchallenged.

More Consolidation Is Not What The Oil Industry Needs

Reports have circulated in recent days that UK petroleum giant Shell is considering a bid to take over its rival BP.  Shell’s management is not offering confirmation, but investors and analysts are considering the implications of a possible marriage of two of the remaining oil majors once known as the Seven Sisters.

Such a combination would bring together a pair of companies that have been mired in controversies for many years. BP, of course, is still closely identified with the 2010 Deepwater Horizon catastrophe in which an offshore well blowout killed eleven workers and caused an enormous oil spill in the Gulf of Mexico. The company has paid out more than $30 billion in fines and settlements linked to the accident.

BP’s U.S. operations were also tainted by a massive explosion in 2005 at a refinery in Texas City, Texas in which 15 workers were killed and 180 injured (the facility was later sold to Marathon Petroleum). The company also experienced serious spills at its operations in Alaska.

More recently, in 2023 BP agreed to pay $242 million to the U.S. Environmental Protection Agency to resolve both air and water pollution violations at its Whiting Refinery in Indiana. The allegations focused on releases of benzene, a carcinogen.

Shell’s biggest controversy has been in Nigeria, where for the past few decades it has faced protests and lawsuits over the environmental impact of its operations in the Niger Delta. In 2015 it paid $84 million to compensate the Bodo community for the effects of oil spills. In the United States, Shell has paid over $1 billion in fines and settlements in cases involving pollution, underpayment of federal leasing royalties, accounting violations, and foreign corrupt practices.

There is no reason to believe that a combined Shell-BP would be any less harmful to the environment. Along with their regulatory and legal infringements, the two companies have a history of participating in trade associations and lobbying groups that resisted regulation of greenhouse gas emissions and promoted climate skepticism. And both companies have been accused of trying to obscure those activities by engaging in greenwashing. Meanwhile, a recent academic study estimated that the major oil companies have caused trillions of dollars in economic harm from their greenhouse gas emissions. BP’s contribution to that amount was put at $1.45 trillion.

Consolidation has long been a way the oil industry dealt with its challenges. Chevron bought Gulf Oil in 1984, Texaco in 2001, and Unocal in 2005. It is now seeking to take over Hess. Exxon acquired Mobil in 1999. Conoco and Phillips Petroleum merged in 2002 to form ConocoPhillips, which in 2024 bought Marathon Oil. 

Oil companies have faced allegations that they use their market power in anti-competitive ways. BP, for example, paid over $300 million to resolve civil and criminal allegations that it manipulated the propane market.

Instead of merging, oil companies should be thinking of ways to transition more quickly from fossil fuels to clean and renewable energy sources.

Identifying the Climate Culprits

A new article in a prestigious scientific journal puts a price tag on the damage fossil fuel companies have done to the earth’s climate through their greenhouse gas emissions. Christopher Callahan and Justin Mankin, writing in Nature, estimate that major petroleum and coal producers have inflicted trillions of dollars in economic harm on the world economy over the decades by helping to generate disasters such as heatwaves, floods, droughts, hurricanes, and wildfires. In the period from 1991 to 2020, they put the total value of that harm at $28 trillion.

They derive their totals by analyzing data on the emissions of 111 fossil fuel producers. About one-third of the harm is attributed to five companies: Saudi Aramco ($2.05 trillion), Gazprom ($2 trillion), Chevron ($1.98 trillion), ExxonMobil ($1.91 trillion), and BP ($1.45 trillion).

Callahan and Mankin are explicit in arguing that their data could be useful in bringing legal actions against the fossil fuel industry. They point out that hundreds of climate lawsuits have been filed but few have succeeded so far.

They foresee greater success in suits that seek to hold specific corporations culpable for specific climate effects. They argue that research advances are making it easier to make those connections and do so themselves in linking the emissions of those 111 fossil fuel producers to extreme heat and resulting economic costs.

Drawing these connections is vital because, among other things, regulatory systems have largely failed both in preventing excessive emissions and in holding corporations accountable for their effects. This is illustrated in the data my colleagues and I have collected from 60 countries in Violation Tracker Global.

In the period since 2010, the 74 oil and gas companies we cover have paid about $41 billion in fines and settlements. Very little of those penalties relate directly to greenhouse gas emissions. BP accounts for the lion’s share of the total at nearly $27 billion, largely in connection with the Deepwater Horizon explosion and spill in the Gulf of Mexico in 2010.

Among the other corporations in Callahan and Mankin’s top five, the largest penalty total belongs to Exxon Mobil at just over $1 billion. The other totals are: Saudi Aramco ($103 million), Gazprom ($106 million), and Chevron ($587 million). The grand total for the five oil giants is about $29 billion.

Given regulatory disclosure limitations in some countries, these totals may be somewhat understated. Yet they do not begin to compare to the magnitude of the economic harms attributed to the corporations by Callahan and Mankin, which for the period since 2010 can be put at roughly $10 trillion.

This means that the five oil giants have paid penalties equal to less than 1 percent of the climate harm they have caused—and those penalties in most cases do not address the greenhouse gas emissions responsible for those harms.

It thus remains highly profitable for fossil fuel producers to continue with business as usual. Hopefully, the new approaches promoted by researchers such as Callahan and Mankin will tip the balance in the other direction by empowering legal challenges to the industry.

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.