Will Musk and Ramaswamy be part of the government or not?

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Days after being elected to a second term as the 47th president, Donald Trump announced a “Department of Government Efficiency” (DOGE) under the leadership of Elon Musk and Vivek Ramaswamy. Musk played a big role in returning Trump to the presidency, and Ramaswamy, another billionaire businessman, had run for president against Trump in the Republican primary but later endorsed him. Both men are highly accomplished in business and could bring a lot of value to the federal government. But in what capacity will they serve?

Despite the odd choice of the label “department” — a term usually used to describe a federal agency such as the Treasury Department — the Trump transition team announcement said DOGE would be outside the government. This shift of DOGE to outside the government was probably motivated by Musk and Ramaswamy both seeking to avoid the divestiture of financial assets that would be required for them to comply with ethics rules inside the government. Establishing DOGE as a department inside the government would have required these two men, and everyone else working for DOGE, to comply with the criminal conflict of interest statute, 18 U.S. Code 208, which prohibits any federal employee from participating in a government matter, including industrywide regulations, federal contracts and other matters, that has an effect on their financial interest. Failing to divest from the conflict creating assets or recuse from matters where conflicts arise can be a felony.

Musk and Ramaswamy don’t want to divest, although many of their businesses — Space X, X, Tesla and others — are regulated by the very federal agencies for which they seek to slash the budget. Some of their businesses have lucrative federal contracts. A frequently suggested method of saving the government money is to outsource more functions to outside contractors, which could mean more money for contractors like Musk. The list of potential conflicts if Musk and Ramaswamy enter the federal government without divesting is extensive.

Unless they divest, it is better for them to stay outside the government and try to wield as much influence from afar as they can. And in fact, they won’t be so far. President Trump will be only a phone call away.

But it is here that the Federal Advisory Committee Act (FACA) comes in. Congress does not want federal agencies or presidents setting up advisory committees of wealthy businesspeople, or anyone else, who provide advice in secret without being subject to conflict of interest rules binding on government employees. Conflict-laden outside “advisers” can still advise the president, but if the advisory role is formalized and regular, as DOGE will be, it must be conducted through a transparent and regulated entity called a federal advisory committee. Under FACA, such committees must keep publicly available records, have public meetings and allow for public participation.

The trade-off is this: A lot more transparency is required under FACA than would be allowed of the White House or an office such as the Office of Management and Budget (OMB), the agency currently responsible for controlling costs in the government. Government agencies and officers often deliberate in secret and, when advice to the president is involved, executive privilege can be asserted even against a request for information or a subpoena from Congress. But government employees must comply with ethics rules, including the financial conflict of interest law. The FACA regime, on the other hand, involves less strenuous ethics rules but more transparency and public participation.

But what if Musk and Ramaswamy, and President Trump, don’t like either the conflict-of-interest rules or transparency? It is here that a legal fight could emerge if DOGE purports to be outside the government but tries to act like a government agency in asserting power over government employees and claiming secrecy for its deliberations. Unless Musk and Ramaswamy divest, they could face allegations that they were de facto government employees and violated the financial conflict of interest statutes.

Alternatively, if DOGE really is outside the government, a court could order it to disclose its records and conduct public meetings under FACA. The Trump administration could respond by saying FACA is unconstitutional, because the president should be able to get advice from anyone he wants, including from a private entity set up by two billionaires. FACA has been the law for five decades but it’s not certain how this Supreme Court might rule if Trump were to challenge it. The court has become enamored of executive powers recently, and several of the justices themselves are fond of secret relationships with billionaires.

Don’t expect law enforcement to intervene any time soon (Matt Gaetz or someone else over at the Justice Department will make sure that doesn’t happen). The next Congress will probably not complain. But two years from now if the Democrats get control of either house of Congress, it could be a different story, and investigations could begin in earnest.

It would be better now for the presidential transition team to decide. Musk and Ramaswamy are either inside the government subject to the financial conflict of interest laws, or DOGE is outside the government subject to the transparency rules in FACA. They can’t have it both ways.

Richard Painter is a professor at the University of Minnesota Law School. He served as the White House’s chief ethics lawyer during the George W. Bush administration from 2005 to 2007.