The New York Times has reported that Elon Musk, an unelected, non-Senate confirmed rando billionaire who was anointed (I won’t say appointed, since this is all happening extraconstitutionally) to head the U.S. DOGE Service (USDS), has been granted access to the “sensitive payments systems” of the Treasury Department. This system is a close-hold, limited access system given that it processes pretty much all outflows from the U.S. government. (It’s basically the accounts payable department of the federal government.)
The rapid takeover by Musk of key government functions began last week, when he and his lackeys took over the Office of Personnel Management (OPM), locking current employees out of the department’s personnel databases, which contain “dates of birth, Social Security numbers, appraisals, home addresses, pay grades and length of service of government workers.” And that came on the heels of Musk setting up his own email server in order to blast a large number (all?) of federal employees with an email telling them they could accept a “deferred resignation” offer where they would collect six months pay if they agreed to resign.
Many journalists have written about the (il)legality of Musk’s “deferred resignation” email, and the setting up of a separate server to do the same, so I’ll leave that to the side for now. And there are questions about the legality of Musk obtaining access to Americans’ personal information, which I will also leave to other analysts who are exploring this.
I have a more basic question: WTF does Musk want with the U.S. Treasury’s payment system?
Well, like any good FBI agent, I am collecting clues. And it gives me a hunch — a theory, only speculation — but at least a way to tentatively connect the dots. And as we would say in the FBI, this whole thing sounds really f***ing hinky.
Let’s take a look at the clues:
For those who are paid subscribers, you know that the Freedom Academy Book Club selection for this quarter is Ben Mezrich’s Breaking Twitter — a serendipitous choice because it is helping me understand the utterly chaotic (and you could call, hostile) takeover of Twitter in October 2022. As a recap, Musk had made an offer to purchase Twitter for $44 billion, a 40% premium over the stock price at the time. After an attempt to reneg on the offer, Musk was forced to follow through, having to sell $15 billion of Tesla shares and also get outside financing, including $1.9 billion from Saudi prince Alwaleed bin Talal. In short, Musk started off on Twitter underwater, with a company that was already barely breaking even.
In order to try to get in the black after his purchase, Elon followed a cost-reduction playbook he appears to be replicating in the federal government: slashing and burning employees across the board. At Twitter, Elon had department heads submit spreadsheets of workers under them with recommendations on whom to keep and whom to fire. He fired about 50% of the workforce, and another huge chunk quit shortly thereafter. It does seem like at the very least, Musk’s desire to access the personnel database is an attempt to undertake a similar slash and burn in the federal bureaucracy. I don’t want to go down an employment law rabbit hole now but suffice it to say that the U.S. government is not a privately owned company and you can’t just fire a bunch of civil servants overnight (and it’s therefore important for people who got the email from USDS to consult an attorney or not act quickly because of course if they voluntarily resign they have no recourse, which may be what Musk is counting on).
But there’s more to it, IMO. Soon after taking over Twitter, Musk made some unwise moves, including 1) being a major amplifier of a conspiracy theory regarding the attack on Paul Pelosi, then Speaker Nancy Pelosi’s husband; 2) launching Twitter Blue that allowed anyone to get a “verified” checkmark, leading to major companies being spoofed and suffering economic harm; and 3) reinstating Trump and other banned accounts on the platform. This led to a huge exodus of advertisers from Twitter, which relied on advertising for 90% of its revenue. So he basically screwed himself and got himself even deeper underwater.
Here is a key inflection point. In November 2022, Musk had a town hall meeting for what was left of his employees. There, he presented a slideshow of his vision for Twitter — now “X” — in which he unveiled his grand plan for the platform. Namely, that advertising revenue would be replaced by subscription revenue as well as becoming an “everything app” where people pretty much did everything — rideshares, food orders, etc. According to Mezrich’s account (which is “narrative nonfiction” based on author interviews and reporting), Musk compared his vision to China’s WeChat, a government-run application which gives “the Chinese government the ability to take people’s data and follow them.” (He reportedly became very agitated when he was challenged on the implications of this comparison.)
In an all-hands meeting in October 2023, The Verge reported, Musk elaborated, envisioning X as the center of people’s financial world, claiming that “someone’s entire financial life” would be conducted on X. The Verge article presciently ends with the following observation: “Musk faces major challenges to get there, though. Convincing people why they need such a platform is one. Getting them to trust X with their entire financial life is another.” Yeah, bookmark that for a second.
Meanwhile, Musk sort of lost his mind after the advertising boycott resulting from his site becoming a cesspool, and he sued the companies who boycotted him. He filed an amended complaint yesterday, asking for treble damages. (He is arguing that the boycott is an antitrust conspiracy against his company.) And in a seemingly unrelated development, yesterday the NTSB announced that it will no longer be providing press updates via email to media outlets, but would only be posting them on X. (I am reasonably assuming here that Musk played a role in this decision.) The common thread and takeaway in both of these incidents is that Musk is not above coercing entities into utilizing X, and in fact appears to feel like he is somehow entitled to have private entities utilize and advertise on his platform to help him turn a profit.
A key hurdle in Musk achieving his vision of an “everything app” that allows payment services — now dubbed “X Money” — is obtaining the necessary permissions, which can vary from state to state. Well, the New York Times reported on January 28 of this year that Musk has overcome this hurdle by partnering with Visa to allow money to be transferred using Visa’s network, skipping the licensing and regulatory steps it would need otherwise. In other words, X Money is open for business; it just needs customers.
So. To recap: Musk is underwater. He has a grand vision for X that requires more users. He has faced two obstacles to that grand vision. One is finding a way to expand X to include payment services, which he has solved through his deal with Visa. The other is actually getting a critical mass of people to sign on, which apparently he is finding difficult given that he is trying to force companies through litigation and starving media of information to use his site.
Enter the Treasury payments system, which Senator Ron Wyden notes is used to process payments, including “Social Security and Medicare benefits, grants, payments to government contractors, including those that compete directly with Musk's own companies. All of it.” Since we are at the beginning of tax season, I’ll note that this is also the system that sends you your refund, if you are owed one.
Imagine a world where X Money becomes the government’s payment platform. I am hard pressed to imagine anyone who could avoid using it — I know I receive electronic payments from the U.S. Treasury for my taxes, and others probably use it for even more than that. Requiring everyone to use X to receive payments from Treasury would, quite simply, solve Musk’s accounting problems. (I’m not sure if the fees would be skimmed from users or the U.S. Treasury but either way he’d make a mint, no pun intended.)
So that is my hunch on Musk’s keen interest in the Treasury Department’s payment system right now. It sounds cartoonishly evil, like the master plan of some over exaggerated supervillain in Despicable Me. Unfortunately, this is real life, and my read of Musk is that he is as narcissistic, arrogant, vindictive, lacking in empathy, and completely unfazed by the law as Trump. Unfortunately for this country, in addition to all of those things, he’s also smarter.
One more thing: If you caught my last piece for
, I wrote about an EO signed by Trump that requires banks to service crypto traders and exchanges, and the risk that creates for banks. (Side note: the broligarchy really believes that crypto should replace fiat currency and oh, Musk happens to have his own coin.) Well, according to the Wall Street Journal, Trump is toying with the idea of getting rid of the FDIC, and having its insurance function absorbed into…the U.S. Treasury (meaning, if your bank went under you’d have to file a claim to recover your deposits through the Treasury Department, a.k.a. Musk).Now, technically speaking, getting rid of the FDIC would require congressional authorization. However, I should note that as I write Trump is attempting to abolish USAID as an independent agency and have it absorbed into the State Department; despite outcries from Congress that he cannot do this without congressional authorization, he certainly appears to be doing it anyway and it’s not clear that anyone intends to stop him. Separation of powers only works if the branches assert their role in the larger framework.
My guess is that right now you are asking: So what can be done? Great question. For one thing, Congress needs to act, now. I defer to people who know how the political game is played but I would think at the very least the Senate needs to halt approval of any nominees until this insanity is addressed (I mean, they approved the nominee that handed the Treasury’s keys to Musk). There are also likely numerous laws being violated that need to be challenged in court — though we also need to be clear-eyed that enforcement of any final court order would lie in the hands of the executive branch and we may be at the point of constitutional crisis where that would be flouted. There also may be state laws that are being violated that could be more effectively litigated by state AGs, which potentially might even be more important given the enforcement issues at the federal level.
In the end, ending this insanity will likely be up to us, the people. Perhaps when people see that their own bottom line is under the control of an unelected, unconfirmed billionaire who has no allegiance to the U.S. government, it will spur action in the streets.
👋 Ex-Treasury person checking in. Mr. Musk took over the Bureau of the Fiscal Service. If the Internal Revenue Service is Accounts Receivable then Bureau of the Fiscal Service is Accounts Payable. If you get a tax refund, IRS itself does not send you a check. IRS sends an electronic request to BFS for them to either mail a check or send an Electronic Funds Transfer. BFS handles all checks and EFTs for the federal government. BFS also manages the government’s bonds program including marketing and retail sales.
If he wanted to nuke our economy on a whim, Mr. Musk could do so now. There is no charitable interpretation of him taking over BFS. Having a drug-addled Nazi-sympathizer in effective control of the treasury outside any effective constraints of law is a situation where remedies are lacking. Either there is a mass march of millions in DC demanding this end or people start doubling down on their safety plans.
If they, the Trumpees, only informed themselves. Read the following truth:
Why do some British people not like Donald Trump?” Nate White, an articulate and witty writer from England wrote the following response:
A few things spring to mind. Trump lacks certain qualities which the British traditionally esteem. For instance, he has no class, no charm, no coolness, no credibility, no compassion, no wit, no warmth, no wisdom, no subtlety, no sensitivity, no self-awareness, no humility, no honour and no grace – all qualities, funnily enough, with which his predecessor Mr. Obama was generously blessed. So for us, the stark contrast does rather throw Trump’s limitations into embarrassingly sharp relief.
Plus, we like a laugh. And while Trump may be laughable, he has never once said anything wry, witty or even faintly amusing – not once, ever. I don’t say that rhetorically, I mean it quite literally: not once, not ever. And that fact is particularly disturbing to the British sensibility – for us, to lack humour is almost inhuman. But with Trump, it’s a fact. He doesn’t even seem to understand what a joke is – his idea of a joke is a crass comment, an illiterate insult, a casual act of cruelty.
Trump is a troll. And like all trolls, he is never funny and he never laughs; he only crows or jeers. And scarily, he doesn’t just talk in crude, witless insults – he actually thinks in them. His mind is a simple bot-like algorithm of petty prejudices and knee-jerk nastiness.
There is never any under-layer of irony, complexity, nuance or depth. It’s all surface. Some Americans might see this as refreshingly upfront. Well, we don’t. We see it as having no inner world, no soul. And in Britain we traditionally side with David, not Goliath. All our heroes are plucky underdogs: Robin Hood, Dick Whittington, Oliver Twist. Trump is neither plucky, nor an underdog. He is the exact opposite of that. He’s not even a spoiled rich-boy, or a greedy fat-cat. He’s more a fat white slug. A Jabba the Hutt of privilege.
And worse, he is that most unforgivable of all things to the British: a bully. That is, except when he is among bullies; then he suddenly transforms into a snivelling sidekick instead. There are unspoken rules to this stuff – the Queensberry rules of basic decency – and he breaks them all. He punches downwards – which a gentleman should, would, could never do – and every blow he aims is below the belt. He particularly likes to kick the vulnerable or voiceless – and he kicks them when they are down.
So the fact that a significant minority – perhaps a third – of Americans look at what he does, listen to what he says, and then think ‘Yeah, he seems like my kind of guy’ is a matter of some confusion and no little distress to British people, given that:
• Americans are supposed to be nicer than us, and mostly are.
• You don’t need a particularly keen eye for detail to spot a few flaws in the man.
This last point is what especially confuses and dismays British people, and many other people too; his faults seem pretty bloody hard to miss. After all, it’s impossible to read a single tweet, or hear him speak a sentence or two, without staring deep into the abyss. He turns being artless into an art form; he is a Picasso of pettiness; a Shakespeare of shit. His faults are fractal: even his flaws have flaws, and so on ad infinitum. God knows there have always been stupid people in the world, and plenty of nasty people too. But rarely has stupidity been so nasty, or nastiness so stupid. He makes Nixon look trustworthy and George W look smart. In fact, if Frankenstein decided to make a monster assembled entirely from human flaws – he would make a Trump.
And a remorseful Doctor Frankenstein would clutch out big clumpfuls of hair and scream in anguish: ‘My God… what… have… I… created?' If being a twat was a TV show, Trump would be the boxed set.