Hey, everybody. Welcome back to the Elon Musk
Podcast. This is a show where we discuss
the critical crossroads, the Shape, SpaceX, Tesla X, The
Boring Company and Neurolink. I'm your host, Will Walden.
How did Elon Musk's allies in the Treasury Department attempt
to cut off USAID spending just days into Donald Trump's
presidency? And what kind of pressure do
they apply to career officials who resisted their demands?
Also, what does this say about the broader effort to control
federal spending through unconventional means?
Emails obtained by CNN provide the first concrete evidence the
Musk's associates sought to use a critical Treasury payment
system to halt foreign aid spending, triggering immediate
pushback from senior officials. Now, four days after Trump's
inauguration, Musk's top lieutenants at the Treasury
Department pressured acting Treasure Secretary David the
Brick, a career official mind you, to block all USAID
payments. The request targeted Treasury
Bureau of the Fiscal Service, which processes over a billion
transactions yearly, including Social Security checks, tax
refunds and federal salaries. The proposal was a direct
challenge to how Treasury traditionally operates, leading
Lebrick to question whether his department even had the legal
authority to unilaterally halt payments authorized by another
agency. Now Lebrick suggested a less
legally risky approach. The State Department, which
overseas US aid, should review and potentially halt the
payments itself. But Tom Krause, a former tech
executive and now a key official in the Treasury Department under
Elon Musk, pushed back. He implied that Lebrick might
face personal legal consequences if he did not comply with the
request. This exchange, described by a
source familiar with the situation, exposed a sharp
divide between career Treasury officials and political
appointees seeking to exert control over federal spending
now. The controversy quickly
escalated beyond the Treasury Department, though.
The revelation that Musk's associates attempted to wield
Treasury's payment processing system to fulfill Trump's policy
goals sparked political outcry. Legal challenges and concerns
about political government overreach in unions and advocacy
groups voice fears that Musk's growing influence in the federal
government could lead to improper access to America's
financial data now on Capitol Hill.
Though Democratic senators demanded explanations from
Treasury officials, they questioned the extent of Musk's
involvement and whether other federal payments could be
similarly targeted in the future.
The controversy also shined a spotlight on the Bureau of the
Fiscal Service, an agency that operates with little public
attention despite handling trillions of dollars in payments
each year. Now, the Treasury Department
later clarified that Kraus ended up deputy had only been granted
read only access to the system, meaning they could not directly
alter payments. But Trump's newly confirmed
Treasury Secretary, Scott Besant, repeated this assurance
in a private meeting with House Republicans.
However, internal e-mail suggests that Kraus and his team
had initially pushed for much broader authority over the
system, raising questions about the full scope of their overall
plans. Now, one source with knowledge
of the discussions noted a discrepancy in the official
explanation. I said the whole here is what
happened between the initial ask and Besen sign off, the source
said. Either the Doge aspirations for
what they wanted dramatically changed or the limitations they
insist were placed on them aren't the whole story now.
The emails reveal that Elon Musk's allies were particularly
interested in blocking US AIDS Health System Strengthening
Program, which directs funds to healthcare infrastructure in
developing nations. Program has financed hospitals,
emergency rooms and maternal health initiatives in countries
such as Indonesia, the Philippines, Guatemala and also
Haiti. 1 notable project funded an emergency room in Jordan, and
the funds were primarily used to improve healthcare access,
controlled infectious disease outbreaks, and reduced maternal
and infant mortality rates. And Daniel Katz was a chief of
staff to Secretary, Treasury or Treasury Secretary nominee Scott
Basent detailed the administration's plan in an
e-mail sent late on January 24th.
He argued that all USA payments should be temporarily halted
while the State Department determined whether they aligned
with Trump's executive order freezing foreign development aid
Now. He called for a pause on all
payments from USA's health System Strengthening Division
and suggested that Cross and his team be given access to the
Treasury payment system to access individual transactions
now. Katz justified the request by
pointing out that a division within USAID had already begun
shutting down certain payments. The administration, he wrote,
wanted Treasury to replicate the process and assume a more active
role in determining whether funds should be dispersed.
His proposal was met with resistance by Lebrik, who warned
of legal risks and copied a Treasury Department lawyer in
his response. Despite Lebrik's warnings,
Krause continued to press the issue and a follow up e-mail
sent in the early hours of Saturday, January 28th.
He urged Lebrik to reconsider, arguing that pausing payments
for review would be a reasonable course of action.
He said. I believe we can all feel more
comfortable that we hold payment, at least to review the
underlying payment request from USAID now so that we can be
given time to consult state. Krauss wrote Now the Bricks
growing frustration with the exchanges contributed to his
decision to leave the department the following week, shortly
after Besant's confirmation as Treasury Secretary.
But before stepping down, the Brick had firmly opposed giving
Krauss and his team brought access to the payment system.
But the exact nature of the restrictions imposed afterward
remains unclear. Initially, it appeared that
Bescent had granted Doge officials unrestricted access to
Treasury's payment systems. However, by the following
weekend, the Treasury Department assured lawmakers the Cross and
his deputy, Marco Allez, a Musk employee in his mid 20s, only
had read only access. This was later confirmed by a
Justice Department attorney representing Treasury in a
federal court case. But during a hearing in
Washington, DC on Wednesday, Department of Justice attorney
Brad Humphreys told the judge that Treasury legal team believe
Kraus and Allez did not have the ability to manipulate payments.
However, he acknowledged that they were still gathering
information about the exact level of access DOGE had been
granted. Now, I want to ask you in the
comments, if you're on a platform that allows you to
comment, do you think Elon and his crew with only read access
could take devices and copy some of that information?
Could you take a photo with your phone, run it through some sort
of GPT, some sort of AI, and get a huge list of these people?
You know, it's a possibility. Who knows?
So those are the questions that are being asked by numerous
people that are familiar with the situation.
But by Wednesday night, the Trump administration formally
agreed that only Kraus and Allez would be permitted to access the
payment system, with court orders potentially limiting
their access to read only status.
This resolution came a bit ongoing scrutiny of Musk's
influence over federal decision making and his role in shaping
financial policies under Trump's administration.
The emails between Treasury officials and Musk associates
have raised important questions about how federal payments can
be controlled and who has the authority to halt them.
While the administration insists that the restrictions on USAID
spending were in line with Trump's executive order, the
attempt to use Treasury's payment system as a mechanism
for blocking foreign aid represents a major departure
from standard government practices.
For now, though, the Treasury Department has sought to
reassure lawmakers that its internal controls prevent
unauthorized financial decisions.
But the episode has left lingering concerns about the
extent to which political appointees could attempt to
override career officials in handling federal funds.
The situation remains under investigation with further legal
and congressional scrutiny expected in the coming weeks.
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