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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