Musk’s Treasury Allies Tried to Shut Down USAID Payments Using Secretive Federal System, Emails Reveal
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Hey, everybody. Welcome back to the Elon Musk podcast. This is a show where we discuss the critical crossroads that shape SpaceX, Tesla, X, The Boring Company, and Neuralink. 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 did 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 that 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 Treasury Secretary David LeBrick, a career official, mind you, to block all U.S. aid 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 oversees U.S. 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. And unions and advocacy groups voiced 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 Krause and a 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 emails suggest that Krause 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. It said, "...the hole here is what happened between the initial ask and besent 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 USAID's Health Systems Strengthening Program, which directs funds to healthcare infrastructure in developing nations. The program has financed hospitals, emergency rooms, and maternal health initiatives in countries such as Indonesia, the Philippines, Guatemala, and Haiti. One notable project funded an emergency room in Jordan.

and the funds were primarily used to improve health care access, control infectious disease outbreaks, and reduce maternal and infant mortality rates.

Daniel Katz was a chief of staff to Treasury Secretary nominee Scott Besant, detailed the administration's plan in an email sent late on January 24th. He argued that all USAID 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 USAID's health system strengthening division and suggested that Krause 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 LeBric, who warned of legal risks and copied a Treasury Department lawyer in his response.

Despite LeBrick's warnings, Krause continued to press the issue. In a follow-up email sent in the early hours of Saturday, January 28th, he urged LeBrick 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 requests from USAID now so that we can be given time to consult state, Krause wrote.

Now, LeBrick's growing frustration with the exchanges contributed to his decision to leave the department the following week, shortly after Besson's confirmation as treasurer secretary. But before stepping down, LeBrick had firmly opposed giving Kraus and his team broad access to the payment system.

But the exact nature of the restrictions imposed afterward remains unclear. Initially, it appeared that Bassett had granted Doge officials unrestricted access to Treasury's payment systems. However, by the following weekend, the Treasury Department assured lawmakers that Kraus and his deputy, Marco Ales, 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. Now,

Now, during a hearing in Washington, D.C. on Wednesday, Department of Justice Attorney Brad Humphreys told the judge that Treasury's legal team believed Krause and Alez 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 Ales would be permitted to access the payment system, with court orders potentially limiting their access to read-only status. This resolution came amid 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. And while the administration insists that the restrictions on U.S. aid 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. And if you want up-to-date, up-to-the-minute information on this, make sure to follow this channel because we get it to you every single day. Sometimes two or three days or two or three times a day, depending on how busy it is. So please hit the follow or subscribe button.

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