Why Musk Doesn’t Have Access to SpaceX’s Biggest Government Secrets

Summary

WSJ Tech News Briefing: Detailed Summary of Episode "Why Musk Doesn’t Have Access to SpaceX’s Biggest Government Secrets"

Release Date: December 17, 2024
Host: Julie Chang
Produced by: Julie Chang, Supervising Producer Katherine Milso, with support from Danny Lewis

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1. FCC's New Internet Nutrition Labels: Accessibility and Effectiveness

Overview: In this segment, WSJ reporter Patience Hagan delves into the Federal Communications Commission’s (FCC) recent mandate requiring Internet service providers (ISPs) to display standardized "nutrition labels" on their plans. Modeled after the nutrition facts panels on food packaging, these labels are intended to provide consumers with clear information about internet prices and speeds, facilitating easier comparisons between different service offerings.

Key Discussions:

• Visibility and Accessibility Issues: Patience Hagan highlights significant challenges consumers face in locating these labels. According to Hagan, "they are required to be provided at the time of purchase," but their placement is often inconspicuous. She explains, “They’re not in an obvious place. And a lot of people don’t know they exist, don’t even notice them when they’re checking out” (02:12).

• Consumer Experience and Store Implementation: Hagan conducted field research across five major ISPs and reported that in none of the stores was the label easy to find or readily understood by employees. She noted, “In no cases was it easy to find, and in no cases was it really something that the employees were used to a person asking for” (02:17).

• Compliance and ISP Responses: ISPs assert compliance by embedding label information into the purchase process, often requiring customers to engage with additional steps, such as scanning a QR code or reaching a final checkout stage to access the labels. Hagan pointed out, “Some companies... show you the labels when you’re getting really close to completing the purchase” (03:29).

• Potential FCC Interventions: Suggestions for enhancing the effectiveness of these labels include making them more prominently displayed and standardizing their formats for better readability and comparison. Hagan emphasized, “Imagine if they were required to be displayed a lot more prominently, whether that’s in store or on the website” (03:33).

• Regulatory Enforcement: Despite the FCC's regulations, there has been no significant enforcement thus far. Hagan mentioned, “If the FCC had broad enforcement actions, that would be public” (04:05). However, the FCC considers the labels a work in progress and is open to refining the requirements. Additionally, a consumer awareness campaign is underway to educate the public about the existence of these labels.

Notable Quotes:

• Patience Hagan (02:12): “Consumers don't know it's there. They don't know to look for it.”
• Patience Hagan (03:29): “Oh, you didn’t go deep enough in our purchase process to see it.”

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2. Elon Musk’s Limited Access to SpaceX’s Classified Government Secrets

Overview: The episode transitions to an in-depth examination of Elon Musk’s unique position concerning security clearances at SpaceX. Despite being the CEO, Musk does not possess access to SpaceX’s most sensitive government contracts and classified information. This situation raises questions about the interplay between corporate leadership and national security protocols, especially in light of Musk’s recent appointment to a government position.

Key Discussions:

• Current Security Clearance Status: WSJ investigations reporter Joe Polozolo explains that while Musk holds a Top Secret security clearance, he lacks access to more sensitive categories such as Sensitive Compartmented Information (SCI) and Special Access Programs (SAP). Polozolo clarifies, “At SpaceX, the bulk of the national security work that it does requires employees... to have access to sensitive compartmented information” (07:52).

• Comparison with Other Defense Contractors: Unlike CEOs of other major defense contractors like Lockheed Martin and Boeing, who do possess SCI access, Musk’s clearance is notably limited. Polozolo notes, “At Lockheed, Boeing and their joint rocket company, ULA... the CEOs there do have what this SCI access” (08:21).

• Reasons for Limited Clearance: Internal deliberations at SpaceX determined that seeking higher clearance for Musk posed too much risk. Factors influencing this decision included Musk’s public use of substances like marijuana and ketamine, which raised red flags during the security vetting process. Polozolo highlights, “There was a risk that he would be denied... and he might also lose his Top Secret clearance” (09:32).

• Implications of Government Appointment: With Musk being appointed by President-elect Donald Trump to co-lead the new Department of Government Efficiency, there is speculation about whether his security clearance status might change. Polozolo suggests, “Trump… have power to give him access without having to go through that traditional review” (11:08). This potential shift could alter the landscape of access to classified information within SpaceX.

• Corporate and Governmental Reactions: Despite the high-profile nature of this development, neither Musk, SpaceX, nor the Trump transition team have publicly commented on the situation. Moreover, the Pentagon declined to provide further details, citing federal privacy laws.

Notable Quotes:

• Joe Polozolo (06:45): “He has a top secret security clearance. So there are three general levels, and top secret is the highest of those three.”
• Joe Polozolo (07:01): “Sensitive compartmented information... means and methods and sources of intelligence.”
• Joe Polozolo (08:46): “At Lockheed, Boeing and their joint rocket company, ULA... the CEOs there do have what this SCI access.”

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Conclusions and Implications

This episode of WSJ Tech News Briefing sheds light on two significant issues affecting consumers and the intersection of technology with national security:

1. Consumer Protection in Tech Services: The FCC’s initiative to implement standardized internet plan labels aims to empower consumers with transparent information. However, the current implementation falls short in accessibility and understanding, hindering its effectiveness. Enhanced visibility, standardized formatting, and rigorous enforcement by the FCC could bridge this gap, ensuring consumers truly benefit from the intended transparency.

2. Security Protocols in High-Tech Leadership: Elon Musk’s restricted access to SpaceX’s classified information underscores the stringent security measures in defense contracting. His appointment to a government department raises pertinent questions about the balance between corporate leadership roles and sensitive governmental responsibilities. Should Musk gain broader access through presidential authority, it could set precedents for executive roles in tech companies intertwined with national security.

Future Outlook: As the FCC continues to refine its regulations and SpaceX navigates the complexities of executive security clearances, both sectors will likely undergo significant transformations to address these challenges. Consumers may see more straightforward internet service comparisons, and the tech-government nexus may evolve to accommodate leaders who straddle corporate and governmental roles.

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This summary was compiled based on the transcript provided from the WSJ Tech News Briefing podcast episode titled "Why Musk Doesn’t Have Access to SpaceX’s Biggest Government Secrets," released on December 17, 2024.

Transcript

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[Julie Chang]

It's Tuesday, December 17th. I'm Julie Chang for the Wall Street Journal. Internet plans now come with nutrition labels that disclose prices and speeds. But what do they look like and where can you find them? Plus, SpaceX CEO Elon Musk does not have access to his rocket company's biggest government secrets. We'll tell you why and what this means now that he's been tapped by President elect Donald Trump to co lead the new Department of Government Efficiency. But first, you know those nutrition labels you see on the side of cereal boxes? This year, a rule from the Federal Communications Commission took effect that requires Internet service providers to list standardized price and speed data on labels that look like nutrition facts panels on packaged foods. These labels would allow consumers to compare Internet plans, but WSJ reporter Patience Hagan found that customers have difficulty finding them, and when they do find them, they're tough to understand. Patience joins us now. Patience, where can I find these labels? Because I've never seen one.

[Patience Hagan]

Yeah, see, they're required to be provided at the time of purchase. So that's when you sign up for your Internet plan online or in a store. But they're kind of inconspicuous, like they're not in an obvious place. And a lot of people don't know they exist, don't even notice them when they're checking out. In some cases, the way the company complies with that requirement is that on the checkout screen you'd have to notice a tiny link at the bottom and click that link in order to find. The whole idea of these labels was to give us an easy way to know what we're paying for. Maybe just as easy as looking at the side of a cereal box. But it's turned out to be nothing like that for most consumers because it's so hard to find. Consumers don't know it's there. They don't know to look for it.

[Julie Chang]

Yeah, you went to a few stores to hunt these labels down. Can you tell us about that?

[Patience Hagan]

I went to five different stores for the five largest Internet service providers. I just wanted to do a quick kind of a check to see how they were following the FCC requirement to have these labels provided in store where people are making their purchases. In no cases was it easy to find, and in no cases was it really something that the employees were used to a person asking for. And then in a few of the stores, the employees didn't even know what these labels were.

[Julie Chang]

And what have the broadband companies said about this?

[Patience Hagan]

The companies maintain that they did comply with the requirement because they did have the label accessible in some way at the time of purchase. Some stores, they do this by putting a QR code on the wall or on a table. Other companies, they explained to me the way they comply with it is they show you the labels when you're getting really close to completing the purchase. They explained to me if you'd gone through all the steps of completing a purchase and been at that final checkout stage, then an employee would have given you the chance to see the labels on their iPad. They kind of explained like, oh, you didn't go deep enough in our purchase process to see it.

[Julie Chang]

Is there anything that the FCC could do to make the labels more useful?

[Patience Hagan]

Yeah, some consumer advocates and industry watchdogs have ideas for that. They could change the way they're required to be displayed. Imagine if they were required to be displayed a lot more prominently, whether that's in store or on the website. Another factor is the labels. They're not really standardized. They can be a little tricky to read, to compare directly.

[Julie Chang]

Yeah. And the other part of this is if you're going to set rules, you also have to regulate them. So how has regulation by the FCC been so far?

[Patience Hagan]

There's been no enforcement. If the FCC had broad enforcement actions, that would be public.

[Julie Chang]

And has the FCC said anything else in response to your reporting?

[Patience Hagan]

The FCC has called these labels an iterative process. They've said that the current labels are a starting point. They've suggested that they're open to improving it and maybe making the requirements a bit more stringent. The FCC is also mounting a consumer awareness campaign for these labels just to make people know that they're there. And maybe consumers will be demanding to see them more.

[Julie Chang]

That was our reporter, Patience Hagen. Coming up, SpaceX launches payloads for the US military and spy agencies. Those are usually shared only with select employees at the rocket company who hold special security clearances. SpaceX CEO Elon Musk isn't one of them. More on that after the break.

[Amazon Representative]

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[Julie Chang]

Elon Musk is the CEO of SpaceX. The rocket company he founded in 2002 has worked with national security agencies since its early days. More recently, it entered into a $1.8 billion classified contract with the National Reconnaissance Office. A spy agency operates satellites. That's according to people familiar with the matter and company documents viewed by the Journal. CEOs of companies that contract with the Defense Department typically get a special level of security clearance. But Musk doesn't even have clearance that some staffers at his rocket company have. That's because SpaceX lawyers have agreed it'd be too risky for him to seek higher clearance, according to reporting by the Wall Street Journal. Now those concerns could soon become irrelevant since Musk has been tapped by President Elect Don to co lead the Department of Government Efficiency, which will advise the incoming administration on cutting spending and regulations. WSJ investigations reporter Joe Polozolo has been following the story and he's with me now. Joe, what kind of security clearance does Elon Musk have?

[Joe Polozolo]

He has a top secret security clearance. So there's three general levels and top secret is the highest of those three.

[Julie Chang]

So then with top secret security clearance, what kind of information is Musk not entitled To?

[Joe Polozolo]

At SpaceX, despite the name Top Secret, there are extra bells and whistles that can be attached to a top secret security clearance. And so a top secret security clearance by itself doesn't give you access to categories of information that are super secret. So one of those categories is sensitive compartmented information that's like need to know secrets about kind of means and methods and sources of intelligence. And then there are these other secret programs called special access programs. And so there are a whole bunch of other security requirements that one has to undergo to get access to those SAP, those special access programs.

[Julie Chang]

And what does this mean in practice for Elon Musk at SpaceX?

[Joe Polozolo]

So at SpaceX, the bulk of the national security work that it does requires employees who work on that national security work to have access to sensitive compartmented information. A smaller number have access to that super secret universe of intel that I just discussed called SAP. So Musk has access to neither of those. He doesn't have those extra authorizations on his top secret clearance.

[Julie Chang]

How is this different from other CEOs at defense contractors like Lockheed Martin and Boeing?

[Joe Polozolo]

Yeah, so at Lockheed, Boeing and their joint rocket company, ULA, United Launch Alliance. The CEOs there do have what this SCI access, this access to sensitive compartmented information, the need to know info about their companies. According to the people that we spoke.

[Julie Chang]

With, since SpaceX is a government contractor, could the company have requested higher clearance for Musk?

[Joe Polozolo]

They could have, but internally there were discussions about this. After the Journal reported in June 2023 that Musk used ketamine, there were discussions about whether to seek, for lack of a better word, a higher clearance for him. And what the lawyers concluded was that it was just too much of a risk. So Musk has a Top Secret clearance, but it took him a very long time to get that, longer than usual. It took years for him to get that. And inside SpaceX, the belief was that the Top Secret clearance was held up for a long time because in 2018 he went on Joe Rogan's podcast and he smoked marijuana. So there was already that out there. And that may have factored into their advice not to seek a higher clearance above and beyond what he has right now. And marijuana is, while it's legal in a lot of states, it's illegal under federal law. Ketamine can be legally prescribed off label for depression and other issues. But we've reported that while he says he has a prescription for ketamine, he's also used it recreationally. And on his security questionnaire that he would have to fill out, he would have to disclose use of ketamine and other drugs within the past seven years. He'd have to disclose his contacts with foreign nationals. The journalists reported, you know, about those contacts, including his communications with Vladimir Putin. So there were a bunch of questions he was going to have to answer that they didn't want him to answer. And then there was a risk that he would be denied. And if he were denied, he might not only lose or be barred from these two special kinds of government secrets, but he might also lose his Top Secret clearance. And that could have a cascading effect, make the company jump through a lot more hoops to maintain its own access and to continue to do some of the national security work that it does. So in the end, it was too risky, they decided. And the executives, at least to this point at SpaceX, have taken that advice to heart.

[Julie Chang]

So, Joe, now that Elon Musk has been tapped by President Elect Trump to co lead the new Department of Government Efficiency, AKA Doge, what could happen to Musk's current clearance status?

[Joe Polozolo]

Yeah, so I mean, the Department of Government Efficiency, you know, it has this mandate to cut spending and cut regulations. And Musk has already mentioned the Pentagon is a potential target for those cuts. So, you know, you'd think that if you're going to be cutting at the Pentagon, you're going to need access to all its spending on classified programs, and that means he's going to need access. While SpaceX may not have wanted to put him through the traditional security vetting, Donald Trump, the president elect, will, as president, have power to give him access without having to go through that traditional review. Trump hasn't said he's going to do that, but it's a possibility that has been raised and within SpaceX they are preparing for that eventuality. They're looking for space for the Department of Government Efficiency to be able to review highly classified information.

[Julie Chang]

Did Musk, SpaceX or the Trump transition team comment on your story?

[Joe Polozolo]

No, none of them did. Musk, SpaceX nor the Trump transition responded to multiple requests for comment. We also reached out to the Pentagon for comment, and a spokeswoman there said that federal privacy law prevented her from commenting on the details or status of an individual's security clearance.

[Julie Chang]

That was our reporter, Joe Polozzolo. And that's it for Tech News Briefing. Today's show was produced by me, Julie Chang, with supervising producer Katherine Milso. We had additional support from Danny Lewis, and we'll be back this afternoon with TNB Tech Minute. Thanks for listening.

[Amazon Representative]

Amazon Q Business is the new generative AI Assistant from aws because many tasks can make business slow, as if wading through mud help. Luckily, there's a faster, easier, less messy choice. Amazon Q can securely understand your business data and use that knowledge to streamline tasks. Now you can summarize quarterly results or do complex analysis in no time. Q Got this? Learn what Amazon Q Business can do for [e-mail] learn more.