Latest / Elon Musk Podcast / Musk’s Treasury Allies Tried to Shut Down USAID Payments Using Secretive Federal System, Emails Reveal

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Musk’s Treasury Allies Tried to Shut Down USAID Payments Using Secretive Federal System, Emails Reveal · Elon Musk Podcast

• 0:01
  Hey, everybody. Welcome back to the Elon Musk
• 0:04
  Podcast. This is a show where we discuss
• 0:07
  the critical crossroads, the Shape, SpaceX, Tesla X, The
• 0:11
  Boring Company and Neurolink. I'm your host, Will Walden.
• 0:15
  How did Elon Musk's allies in the Treasury Department attempt
• 0:18
  to cut off USAID spending just days into Donald Trump's
• 0:22
  presidency? And what kind of pressure do
• 0:24
  they apply to career officials who resisted their demands?
• 0:28
  Also, what does this say about the broader effort to control
• 0:32
  federal spending through unconventional means?
• 0:36
  Emails obtained by CNN provide the first concrete evidence the
• 0:39
  Musk's associates sought to use a critical Treasury payment
• 0:43
  system to halt foreign aid spending, triggering immediate
• 0:47
  pushback from senior officials. Now, four days after Trump's
• 0:50
  inauguration, Musk's top lieutenants at the Treasury
• 0:53
  Department pressured acting Treasure Secretary David the
• 0:56
  Brick, a career official mind you, to block all USAID
• 1:01
  payments. The request targeted Treasury
• 1:02
  Bureau of the Fiscal Service, which processes over a billion
• 1:06
  transactions yearly, including Social Security checks, tax
• 1:10
  refunds and federal salaries. The proposal was a direct
• 1:13
  challenge to how Treasury traditionally operates, leading
• 1:16
  Lebrick to question whether his department even had the legal
• 1:19
  authority to unilaterally halt payments authorized by another
• 1:23
  agency. Now Lebrick suggested a less
• 1:26
  legally risky approach. The State Department, which
• 1:29
  overseas US aid, should review and potentially halt the
• 1:33
  payments itself. But Tom Krause, a former tech
• 1:36
  executive and now a key official in the Treasury Department under
• 1:40
  Elon Musk, pushed back. He implied that Lebrick might
• 1:42
  face personal legal consequences if he did not comply with the
• 1:46
  request. This exchange, described by a
• 1:48
  source familiar with the situation, exposed a sharp
• 1:51
  divide between career Treasury officials and political
• 1:54
  appointees seeking to exert control over federal spending
• 1:59
  now. The controversy quickly
• 2:00
  escalated beyond the Treasury Department, though.
• 2:03
  The revelation that Musk's associates attempted to wield
• 2:06
  Treasury's payment processing system to fulfill Trump's policy
• 2:10
  goals sparked political outcry. Legal challenges and concerns
• 2:14
  about political government overreach in unions and advocacy
• 2:17
  groups voice fears that Musk's growing influence in the federal
• 2:20
  government could lead to improper access to America's
• 2:23
  financial data now on Capitol Hill.
• 2:26
  Though Democratic senators demanded explanations from
• 2:29
  Treasury officials, they questioned the extent of Musk's
• 2:32
  involvement and whether other federal payments could be
• 2:35
  similarly targeted in the future.
• 2:37
  The controversy also shined a spotlight on the Bureau of the
• 2:40
  Fiscal Service, an agency that operates with little public
• 2:43
  attention despite handling trillions of dollars in payments
• 2:46
  each year. Now, the Treasury Department
• 2:48
  later clarified that Kraus ended up deputy had only been granted
• 2:52
  read only access to the system, meaning they could not directly
• 2:55
  alter payments. But Trump's newly confirmed
• 2:58
  Treasury Secretary, Scott Besant, repeated this assurance
• 3:01
  in a private meeting with House Republicans.
• 3:04
  However, internal e-mail suggests that Kraus and his team
• 3:07
  had initially pushed for much broader authority over the
• 3:10
  system, raising questions about the full scope of their overall
• 3:13
  plans. Now, one source with knowledge
• 3:16
  of the discussions noted a discrepancy in the official
• 3:19
  explanation. I said the whole here is what
• 3:22
  happened between the initial ask and Besen sign off, the source
• 3:26
  said. Either the Doge aspirations for
• 3:28
  what they wanted dramatically changed or the limitations they
• 3:32
  insist were placed on them aren't the whole story now.
• 3:37
  The emails reveal that Elon Musk's allies were particularly
• 3:40
  interested in blocking US AIDS Health System Strengthening
• 3:43
  Program, which directs funds to healthcare infrastructure in
• 3:46
  developing nations. Program has financed hospitals,
• 3:50
  emergency rooms and maternal health initiatives in countries
• 3:53
  such as Indonesia, the Philippines, Guatemala and also
• 3:56
  Haiti. 1 notable project funded an emergency room in Jordan, and
• 4:01
  the funds were primarily used to improve healthcare access,
• 4:04
  controlled infectious disease outbreaks, and reduced maternal
• 4:07
  and infant mortality rates. And Daniel Katz was a chief of
• 4:11
  staff to Secretary, Treasury or Treasury Secretary nominee Scott
• 4:15
  Basent detailed the administration's plan in an
• 4:18
  e-mail sent late on January 24th.
• 4:21
  He argued that all USA payments should be temporarily halted
• 4:24
  while the State Department determined whether they aligned
• 4:27
  with Trump's executive order freezing foreign development aid
• 4:31
  Now. He called for a pause on all
• 4:33
  payments from USA's health System Strengthening Division
• 4:38
  and suggested that Cross and his team be given access to the
• 4:41
  Treasury payment system to access individual transactions
• 4:45
  now. Katz justified the request by
• 4:48
  pointing out that a division within USAID had already begun
• 4:52
  shutting down certain payments. The administration, he wrote,
• 4:57
  wanted Treasury to replicate the process and assume a more active
• 5:01
  role in determining whether funds should be dispersed.
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  His proposal was met with resistance by Lebrik, who warned
• 5:08
  of legal risks and copied a Treasury Department lawyer in
• 5:11
  his response. Despite Lebrik's warnings,
• 5:13
  Krause continued to press the issue and a follow up e-mail
• 5:17
  sent in the early hours of Saturday, January 28th.
• 5:19
  He urged Lebrik to reconsider, arguing that pausing payments
• 5:23
  for review would be a reasonable course of action.
• 5:26
  He said. I believe we can all feel more
• 5:28
  comfortable that we hold payment, at least to review the
• 5:31
  underlying payment request from USAID now so that we can be
• 5:36
  given time to consult state. Krauss wrote Now the Bricks
• 5:40
  growing frustration with the exchanges contributed to his
• 5:43
  decision to leave the department the following week, shortly
• 5:46
  after Besant's confirmation as Treasury Secretary.
• 5:49
  But before stepping down, the Brick had firmly opposed giving
• 5:52
  Krauss and his team brought access to the payment system.
• 5:55
  But the exact nature of the restrictions imposed afterward
• 5:59
  remains unclear. Initially, it appeared that
• 6:01
  Bescent had granted Doge officials unrestricted access to
• 6:05
  Treasury's payment systems. However, by the following
• 6:07
  weekend, the Treasury Department assured lawmakers the Cross and
• 6:10
  his deputy, Marco Allez, a Musk employee in his mid 20s, only
• 6:15
  had read only access. This was later confirmed by a
• 6:18
  Justice Department attorney representing Treasury in a
• 6:22
  federal court case. But during a hearing in
• 6:24
  Washington, DC on Wednesday, Department of Justice attorney
• 6:27
  Brad Humphreys told the judge that Treasury legal team believe
• 6:30
  Kraus and Allez did not have the ability to manipulate payments.
• 6:34
  However, he acknowledged that they were still gathering
• 6:37
  information about the exact level of access DOGE had been
• 6:40
  granted. Now, I want to ask you in the
• 6:43
  comments, if you're on a platform that allows you to
• 6:45
  comment, do you think Elon and his crew with only read access
• 6:52
  could take devices and copy some of that information?
• 6:57
  Could you take a photo with your phone, run it through some sort
• 7:00
  of GPT, some sort of AI, and get a huge list of these people?
• 7:05
  You know, it's a possibility. Who knows?
• 7:09
  So those are the questions that are being asked by numerous
• 7:11
  people that are familiar with the situation.
• 7:14
  But by Wednesday night, the Trump administration formally
• 7:17
  agreed that only Kraus and Allez would be permitted to access the
• 7:19
  payment system, with court orders potentially limiting
• 7:22
  their access to read only status.
• 7:24
  This resolution came a bit ongoing scrutiny of Musk's
• 7:27
  influence over federal decision making and his role in shaping
• 7:30
  financial policies under Trump's administration.
• 7:33
  The emails between Treasury officials and Musk associates
• 7:36
  have raised important questions about how federal payments can
• 7:38
  be controlled and who has the authority to halt them.
• 7:41
  While the administration insists that the restrictions on USAID
• 7:45
  spending were in line with Trump's executive order, the
• 7:47
  attempt to use Treasury's payment system as a mechanism
• 7:51
  for blocking foreign aid represents a major departure
• 7:54
  from standard government practices.
• 7:57
  For now, though, the Treasury Department has sought to
• 8:00
  reassure lawmakers that its internal controls prevent
• 8:04
  unauthorized financial decisions.
• 8:06
  But the episode has left lingering concerns about the
• 8:08
  extent to which political appointees could attempt to
• 8:11
  override career officials in handling federal funds.
• 8:14
  The situation remains under investigation with further legal
• 8:19
  and congressional scrutiny expected in the coming weeks.
• 8:22
  And if you want up to date, up-to-the-minute information on
• 8:25
  this, make sure to follow this channel because we get it to you
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  every single day, sometimes two or three days or two or three
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  times a day depending on how busy it is.
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  So please hit the follow or subscribe button.
• 8:46
  Hey, thank you so much for listening today.
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  I really do appreciate your support.
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