Week Six: A dying CFPB, Musk’s business boom, conflicts of interest, and blatant favoritism.
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Welcome to Week Six of the Revolving Door Project’s Corruption Calendar, where we highlight examples of corporate corruption shaping the Trump administration’s agenda and their material impact on everyday people. Read our first five issues here and follow us on Bluesky and X for #CorruptionCalendar updates.
This week, the Trump administration is moving fast to dismantle the Consumer Financial Protection Bureau (CFPB), abandoning several active enforcement cases against financiers ripping off consumers. The SEC paused its case against Trump ally Justin Sun and handed the crypto industry another victory. Elon Musk continues to have field day after field day, slashing agencies he doesn’t like and watching his businesses balloon in value since the election. Several Trump appointees (like CFTC Chair Nominee Brian Quintenz and acting administrator of the PHMSA, Ben Kochman) have major conflicts of interests which will likely skew agency action towards the interests of corporations at the expense of the public. We also witnessed an instance of blatant bias in how legal actions are handled, with leniency toward Republicans.
The CFPB, Which Was Created After The 2008 Financial Crisis To Protect Consumers, Agrees To Drop Its Cases Against SoLo Funds, Capital One, And Other Lenders As Part Of A Wider Reduction In Enforcement Actions Orchestrated By Musk And Vought:
The Consumer Financial Protection Bureau and peer-to-peer lending platform SoLo Funds have agreed to end the CFPB's lawsuit against the company as part of a broader halt to enforcement actions. The lawsuit, ongoing since May 2024, accused SoLo Funds of charging exorbitant loan fees, with some loans having an annual percentage rate over 1,000% despite the company claiming to connect borrowers to lenders with no mandatory fees or interest.
The CFPB also dropped legal action against Capital One, which the agency had accused last month of cheating consumers out of more than $2 billion in interest payments on savings accounts.
Another case that was dropped was against student loan servicer Pennsylvania Higher Education Assistance Agency (PHEAA), which was accused of illegally collecting on student loans discharged in bankruptcy.
Then the CFPB dropped charges against real estate brokerage Rocket Homes, which the agency claims has engaged in an unlawful “kickback scheme” that resulted in the steering of consumer borrowers to Rocket Mortgage.
Next, the CFPB let Vanderbilt Mortgage & Finance off the hook. The nonbank financing company was accused of approving loans for manufactured homes without properly assessing borrowers' ability to repay. This led to many families struggling with payments, incurring extra fees and penalties, and, in some cases, losing their homes.
Finally, yesterday, the agency abandoned its case against predatory lender Heights Finance. The CFPB sued Heights Finance for illegal loan-churning practices that harvested hundreds of millions in loan costs and fees.
The CFPB’s decision to drop the case against SoLo Funds and the other companies is part of a wider reduction in enforcement actions. The agency has canceled expert witness contracts and plans to eliminate over $100 million in contracts. These actions follow efforts by the Trump administration, with backing from Elon Musk and Director of the United States Office of Management and Budget (OPM) Russell Vought, to dismantle the CFPB, which was created to protect consumers after the 2008 financial crisis.
The Securities and Exchange Commission Paused Its Case Against Justin Sun, Who Invested Millions In World Liberty Financial, A Crypto Venture Backed By President Trump:
H/T Rebecca Crosby and Judd Legum at Popular Information who broke the story of the SEC’s decision to halt prosecution of Justin Sun, a crypto entrepreneur. Sun faced charges of “marketing unregistered securities and ‘fraudulently manipulating the secondary market’ for a crypto token. The pause follows Sun’s $30 million purchase of crypto tokens from World Liberty Financial, which amounted to an $18 million payday for Trump.
The SEC also issued a statement yesterday declaring that memecoins are not securities. According to the statement, the SEC has now determined that “that transactions in the types of meme coins described in this statement, do not involve the offer and sale of securities under the federal securities laws. As such, persons who participate in the offer and sale of meme coins do not need to register their transactions with the Commission.” The message is clear: the agency has abandoned its responsibility to enforce securities law in this arena and protect investors. This fits with the agency’s deregulatory, pro-crypto bent under Trump. It also follows the President’s recent foray into the space with the launch of his Trump coin last year.
Elon Musk’s DOGE Team Is Laying Off Workers At The Auto Safety Agency Overseeing His Car Company:
The Department of Government Efficiency (DOGE), Elon Musk’s department dedicated to gutting the federal government, has cut jobs at the National Highway Traffic Safety Administration (NHTSA). The NHTSA is the vehicle safety agency that oversees Tesla and has launched investigations into deadly crashes involving Tesla cars. Tesla has criticized the NHTSA mandate calling on Tesla and other automakers to use self-driving technology to report crash data on vehicles. So it is not surprising that the agency provoked the ire of DOGE. Cutting jobs at an agency that helps keep the public safe from preventable automobile accidents helps no one but Musk, who clearly has disdain for the NHTSA scrutinizing his companies.
Elon Musk's SpaceX Is Poised To Take Over A $2 Billion Federal Contract To Modernize The U.S. Air Traffic Communications System, Raising Concerns About Conflicts Of Interest, Lack Of Transparency, And The Potential Influence Of Musk's Business Dealings Across Multiple Government Agencies:
Elon Musk's satellite company, SpaceX, is positioned to take over a $2 billion federal contract aimed at modernizing the U.S. air traffic communications system, currently held by Verizon. Equipment from Musk's Starlink has been installed in FAA facilities, and SpaceX plans to replace the aging communications system with its satellite constellation. Verizon’s contract, awarded in 2023, had already been modernizing the system, with nearly $200 million already invested.
Former FAA officials expressed concern about using Starlink without adequate testing, review and debate about benefits and drawbacks. Musk's potential involvement raises conflicts of interest, as he holds positions in both the White House (via the Department of Government Efficiency AKA DOGE) and a variety of companies. Musk’s business dealings also involve other agencies, like the General Services Administration (GSA), which controls real estate and contracting for numerous government agencies, NASA, the Food and Drug Administration (FDA) and the Department of Defense, further complicating the situation.
Elon Musk’s Companies Set To Add $613 Billion In Value Since Election, Highlighting How Tech Billionaires’ Influence Over The Administration Is Being Used For Personal Gain:
Elon Musk’s companies have seen massive growth since the election, with Tesla, SpaceX, xAI, and potentially X all skyrocketing in value. X, Musk’s social-media company, is aiming to raise funds from investors at a $44 billion valuation, which would eliminate the financial uncertainty surrounding its 2022 purchase price and increase Musk's wealth by $20 billion.
Since the election, Musk's companies have collectively gained $613 billion in value, and his personal net worth has grown by over 50%, reaching $397.1 billion, with projections indicating it could surpass $420 billion if all funding rounds are successful. Though valuations for rounds of private investment should be taken with a grain of salt, Musk’s investment in Trump’s second presidential run is clearly paying off, showcasing how easily the administration can be bought off and the self-serving nature of Musk’s agenda. Investors are eager to get close to Musk and follow his lead to cash in on the current administration.
Jeff Bezos Is Shifting The Washington Post's Editorial Stance To Align With Conservative Values And Strengthen Ties With Donald Trump, Likely To Advance His Business Interests And Political Influence:
Amazon founder and Washington Post owner Jeff Bezos is cozying up to Trump in troubling ways. Trump and Bezos had an icy relationship during Trump’s first term, but all of that seems to have changed with one phone call in July 2024. “During the call, Bezos praised Trump for how he'd handled the attempt on his life at a rally in Butler, Pennsylvania.” Bezos also recommended Trump nominate fellow tech billionaire Doug Burgum as vice-president. Trump did not choose Burgum as his running mate but he did select Burgum to be Secretary of the Interior.
Soon after their summer phone conversation, Bezos tanked The Washington Post’s Kamala Harris endorsement. Bezos' Trump-ward drift is continuing as he recently announced that The Washington Post’s progressive-leaning opinion page will instead promote “personal liberties and free markets.” Bezos is redefining his newspaper’s takes to facilitate a closer relationship with Trump. Bezos knows that being in Trump’s good graces means he could potentially receive favors from him, and deepen the unsavory ties between the government and the industries it's meant to regulate.
CFTC Chair Nominee Brian Quintenz Does Not Plan to Recuse Himself from Prediction Market Discussions, Which Could Benefit Industry Players Like His Former Employer Kalshi:
Brian Quintenz, nominated by President Trump to chair the Commodity Futures Trading Commission (CFTC), is expected to be involved in matters related to prediction markets despite potential conflicts of interest, as he has been on the board of prediction market Kalshi since 2021.
This is a break from tradition as senior regulators typically recuse themselves from cases where personal interests could affect their impartiality. For example, former CFTC and SEC Chairman Gary Gensler recused himself from an investigation into MF Global in 2011 while leading the CFTC due to his close ties to the firm’s former CEO. But Quintenz may avoid recusal, allowing him to “decide what issues rise to the top of the commission’s agenda, and to prioritize rulemaking and regulatory interpretations related to prediction markets like Kalshi and Polymarket.” While no source believed Quintenz intended to willfully-ignore legally-binding ethics agreements, they suggested that ethics enforcement was more relaxed under Trump. Quintenz would not have the power to unilaterally resolve Kalshi's lawsuit against the CFTC, but a more crypto-friendly commission could influence the outcome.
The Trump Administration Has Withdrawn Proposed Carbon Dioxide Safety Regulations Aimed At Preventing Disasters Like The 2020 Pipeline Rupture In Mississippi, Raising Concerns About Increased Risks To Public Safety:
The Trump administration has withdrawn proposed carbon dioxide safety regulations that were initiated in the wake of a disastrous pipeline rupture near Satartia, Mississippi in 2020, which sent nearly 50 people to the hospital with severe symptoms. The proposed regulations, which aimed to prevent such disasters, were introduced by the Department of Transportation during the final days of the Biden administration after years of advocacy from experts and community groups. However, these regulations are now uncertain.
The new acting administrator of the Pipeline and Hazardous Materials Safety Administration (PHMSA), Ben Kochman, previously worked as a lobbyist for the pipeline industry, raising concerns about potential conflicts of interest.
Without enhanced regulations, communities—particularly low-income and minority areas—will be exposed to significant risks as the oil and gas industry plans to expand carbon capture projects that require more pipelines. As the pipeline infrastructure expands, many fear the risks to public safety will grow without appropriate regulatory oversight.
D.C. Police Are Investigating An Alleged Assault By Republican Representative Cory Mills, But No Charges Have Been Filed Due To The Inaction Of Trump-Appointed U.S. Attorney Ed Martin, Reflecting A Troubling Pattern Of Leniency Toward Republicans In Criminal Cases.
D.C. police are investigating an alleged assault of a 27-year-old woman by Representative Cory Mills, a Republican from a district northeast of Orlando, describing it as an ongoing criminal investigation. Although Mills is the subject of an ongoing investigation, no charges have been filed and he has not been arrested. Why? Seemingly because a Trump-appointed U.S. attorney refuses to enforce the law against Republicans.
D.C. police sent an arrest warrant on Representative Mills to interim U.S. Attorney Ed Martin’s office, but it has not been signed by the federal prosecutor. Instead, the case was referred back to the police for further investigation. The case could essentially die at this point, said a DC police spokesperson, meaning it may never result in criminal charges. While we are waiting for more details to emerge, this is part of a concerning pattern.
Recently, the Justice Department dropped its corruption case against New York Mayor Eric Adams (a conservative Democrat in a blue city who has been ingratiating himself with the Administration); the Justice Department also dropped a criminal investigation into Republican Representative Andy Ogles of Tennessee; and federal prosecutors abandoned a criminal case against former Representative Jeff Fortenberry, a Nebraska Republican who had been found guilty of corruption by a jury. Every available fact suggests that Trump is letting political allies off the hook for corruption and other charges.
Furthermore, interim attorney Ed Martin promised Musk he would “pursue any and all legal action against anyone who impedes” on the work of Musk’s so-called “Department of Government Efficiency” (DOGE). So Martin has no problem going after people who criticize DOGE, but can’t seem to direct that same energy to Republicans who appear to be corrupt and/or violent.
We are continuously updating resources to keep you up to date on Trump and Musk’s all-out assault on everyday people and the Constitution.
This includes:
No Corporate Cabinet, a central hub documenting corporate corruption and conflicts of interest among those jockeying for power in the Trump administration. We’ve published profiles on Trump nominees like Paul Atkins, Linda McMahon and Chris Wright – check back for more profiles in the days to come.
Our tracker of the Trump administration’s failure to comply with court orders, and the programs and services being disrupted by its non-compliance. We are also tracking the actions judges take to attempt to enforce their orders.
A list of all of the individuals who have ever been reported to be affiliated with Elon Musk’s DOGE, with links to the original reporting.
Profiles of the agents behind DOGE attacks, including conflicts of interest that might make their unfettered access to the federal government dangerous to the public.
A list of the agencies that DOGE has visited, keeping you up to date on what Elon Musk is looking to illegally gut.
An aviation tracker of administration attacks on air safety.
Agency Spotlight—Our tracker of appointments to leadership positions at thirty-nine federal independent agencies.
Thank you for this excellent compilation, and all your work to help us keep up with This Week in Graft and Corruption. There is a sign on a store marquee here in San Francisco: NEXT WEEK WAS EXHAUSTING. Was, is, and will be, but we have to push on.