May 6, 2025 • 32 mins
It’s no secret that Elon Musk isn’t a big fan of the US Securities and Exchange Commission. He and his companies have been the subject of a plethora of investigations and regulatory scrutiny over the years (who can forget the infamous words “funding secured”?), and there’s currently a probe of Musk’s acquisition of Twitter shares. But only recently have Musk’s minions begun to ramp up their efforts to shrink the SEC. And while the “Department of Government Efficiency” has hugely missed the mark in terms of how much Musk claimed it would cut, hobbling the SEC could have profound consequences for Musk’s fortune. On this week’s episode of Elon, Inc., host David Papadopoulos is joined by Bloomberg Businessweek senior writer Max Chafkin, Bloomberg Elon Musk reporter Dana Hull and SEC reporter Nicola White to discuss Musk’s run-ins with the agency and what we can possibly expect from DOGE’s doings.
Speaking of eyebrow raising—Musk just scored a big victory in Texas when residents of the small community near SpaceX’s rocket launch site voted to officially incorporate the area as “Starbase.” Bloomberg legal reporter Madlin Mekelburg joins the gang to discuss.
To end things, Chafkin has spotted a brewing feud in Musk’s world. No, it’s not the Tesla CEO vs. the Tesla board, it’s Elon Musk vs. his neighbors—and this spat has it all.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
Let me tell you we have a new star.
Speaker 3 (00:10):
A star is born Elon On mars Juson Kennedy.
Speaker 4 (00:14):
He is the Thomas Edison plus plus plus of our age.
Speaker 5 (00:18):
Probably his whole life is from a position of insecurity.
I feel for the guys. I would say ninety eight
percent really appreciate what he does.
Speaker 6 (00:25):
But those two percent.
Speaker 5 (00:26):
That are nasty, they are all pay in four folks.
Speaker 7 (00:30):
We were meant for great things in the United States
of America, and Elon reminds.
Speaker 6 (00:34):
Us of that we don't have a fourth branch of
governments called Elon.
Speaker 2 (00:39):
Musk mock mus.
Speaker 7 (00:46):
Welcome to Elon and Bloomberg's weekly podcast about Elon muskets Tuesday,
May sixth. I'm your host, David Papadopolis. Now Elon may
be preparing to wind down his time in Washington, but
Doge certainly isn't done yet. Just last week, it's stepped
up at scrutiny of the Securities in Exchange Commission, and
Elon's relationship with the powerful financial regulator has been shall
(01:08):
we say tens.
Speaker 3 (01:10):
The two sides have squared.
Speaker 7 (01:11):
Off again and again over the years, and he stands
to benefit enormously from a smaller and perhaps more lenient SEC.
Speaker 3 (01:20):
Meanwhile, Elon is on his way to founding.
Speaker 7 (01:22):
His own brand spanking new city down along the Mexican border.
Speaker 3 (01:27):
Madlin Meckleberg will.
Speaker 7 (01:29):
Join us later to talk about the birth of Starbase Texas,
but we'll start with Doge and the SEC.
Speaker 3 (01:35):
And to do that, I'm.
Speaker 7 (01:35):
Here with our regulars, BusinessWeek's Max Chafkin and Ace Elon
reporter Dana Hall. Max, Dana, welcome to you both.
Speaker 2 (01:43):
Hey David, Hey David.
Speaker 3 (01:45):
And from Washington, DC.
Speaker 7 (01:46):
We're joined by Nicola White, Bloomberg's SEC reporter Nicola, Hello,
welcome to the show.
Speaker 2 (01:52):
Hi there.
Speaker 3 (01:53):
Okay, so Doze stepping up a bit. It's scrutiny the SEC.
Speaker 7 (01:58):
Let's go back to the r archives and remember what
Musk said about the SEC years ago.
Speaker 5 (02:05):
I want to be clear, I do not respect the SEC.
I do not respect them.
Speaker 7 (02:10):
Dana Hull tell us a little bit more about those
comments for Musk and help us set the stage here
for Doge's incursion into the SEC.
Speaker 3 (02:20):
Now, So, Elon.
Speaker 4 (02:21):
Musk has had a long standing feud with the SEC,
stretching back years. Probably the highlight was in twenty eighteen.
As you all may remember, in August, he attempted to
take Tesla private. He tweeted out that he was, you know,
considering taking tesl private at four twenty a share. That
got him into huge trouble with the SEC. That the
(02:41):
SEC ultimately fined him twenty million dollars and he couldn't
be chair of the company for at least three years.
And he's just always been super angry at the SEC,
particularly the office in San Francisco, and you know, at
times has called them the short sellar Enrichment Commission. And
this is a guy who's not particularly fond of regulation.
(03:02):
He sees it as holding back you know, industry and
all of his enterprises. And now that he's a very
powerful figure in the Trump administration, I think that he,
you know, of all the agencies where Doge could really
make it smark, I would think that the SEC would
be the one that would have among the most importance
to Musk and his companies. And the SEC has also
(03:24):
investigated Musk's companies with Tesla and the way that it
marketed Autopilot. Nikola knows better than I do, but there
are various probes that have been launched and then it's
not really clear what the status is if they are
still under active investigation, if they've died on the line,
if they've been referred to DOJ or AG offices like.
There are a lot of questions about what happened to
(03:45):
those SEC investigations and where the people leading those investigations
are they still even at the agency.
Speaker 8 (03:51):
Yeah, and there's also a lawsuit against Musk for the
way he just or didn't disclose his amassing of Twitter
shares before he basically did a takeover bid, and that's
that was filed days before Trump's inauguration, So it was
like the they squeaked it in right before the administrative change.
Speaker 7 (04:12):
And as Dana was just alluding to, do we have
a sense of where that one is.
Speaker 3 (04:18):
His purchase of Twitter shares before you launched a bid.
Speaker 8 (04:21):
That is a question on everyone's mind. I think I
know several people who have alerts set up for the
docket for that case. Any movement in that case would
be of high interest to anybody watching the SEC, anybody
who's into following what's happening with Elon Musk. We don't
have any update on that yet, and there's a lot
of eyes on what happens to that case. The SEC
(04:44):
is in like a weird position. If they dropped the
case wouldn't look good. If they go full throttle, and like,
you know, try to sue Musk for hundreds of millions
of dollars that also might not look good. So they're
in a very weird, uncomfortable position.
Speaker 3 (04:58):
I want to go back for second.
Speaker 7 (04:59):
Next, what Dana was saying and calling the SEC and
saying it doesn't stand for the Securities in Exchange Commission
Musk that it stands for the short Seller Enrichment Commission.
Speaker 6 (05:10):
There was also a vulgar one that he not going
to bring up on this podcast, but well you just
did show it's all right.
Speaker 2 (05:17):
But anyway, and as we.
Speaker 7 (05:19):
Know, there is no group of humans in the world
who Elon Musks hates more than the short sellars. And
in his mind, the SEC was just doing the bidding
of the shorts.
Speaker 3 (05:29):
He also is called the SEC at one point or
he eeked or tweeted.
Speaker 7 (05:34):
About him, called them shameless puppets of Wall Street. Has
there ever been a human who has been more at
odds and feuded more with the SEC than Elon Musk.
Speaker 6 (05:47):
Well, not that I'm aware of I mean, the way
Elon Musk runs his companies is sort of like totally
opposed to everything that the SEC stands for. Like Elon
Musk's empire is a web of conflicts of interest, lots
of self dealing, weird shared ownership stakes, like Musk is.
Speaker 3 (06:08):
A sort of weird midnight tweets.
Speaker 6 (06:09):
Yeah yeah, right, And it's just like a whole bunch
of things that like are not in keeping with the
way the sort of conventional wisdom.
Speaker 3 (06:19):
About how public company.
Speaker 2 (06:21):
CEOs are supposed to act.
Speaker 6 (06:23):
Now, the one thing I'll say is, this is not
like a secret and that's what kind of always made
this these these disputes with the SEC kind of funny.
It's not like, you know, most Tesla investors and most
of the investors who are in Musk companies understand this
about him, understand that he's different, and that's why they
like him. And so it is this kind of weird
(06:45):
thing where where Musk like seems to continually either violate
securities law or walk right up to the line where
where I don't know, like a neutral observer.
Speaker 2 (06:54):
Would probably think he was violating Security's law.
Speaker 6 (06:57):
And the SEC has really struggled to and a glove
on him effectively.
Speaker 2 (07:02):
In other words, they've find him, they've found.
Speaker 7 (07:05):
Him twenty million dollars, but he hasn't ever changed his behavior.
Speaker 2 (07:08):
He just goes from one.
Speaker 6 (07:09):
It's like it's like somebody, it's like a rich guy
who gets caught speeding in his Lamborghini. Right, It's like
he pays a ticket and he and he keeps on driving.
Speaker 7 (07:17):
But wasn't he also forced to step down his chair
of Tesla coming out of one of these lawsuits.
Speaker 4 (07:22):
Yeah, well, yeah he was forced. But so what, David,
He's still on the board. I mean it's still his board.
He's still the largest chareholder.
Speaker 2 (07:30):
So yeah, he was.
Speaker 4 (07:31):
He stepped down his chair. Now Robin Denholm is the chair,
but he's still on the board.
Speaker 7 (07:36):
It sounds like a big deal, but it actually doesn't
mean anything.
Speaker 6 (07:39):
He had a Twitter sitter, remember, like made him get
a guy, and we always wondered who, Like, who's the
guy who's gotta like vet Elon Musk's tweet this guy,
And you know, for a while it seemed like maybe
it was possible that this was actually happening. I don't know,
it doesn't let me just say, it doesn't seem like
the Twitter sitter was empowered the right to do a
(08:01):
lot of city.
Speaker 7 (08:01):
I forgot about that that the SEC made somebody walk
around with his phone as if like you know that
with a person carrying the codes to the nuclear you know,
nuclear warheads that the president has or something. But Nicola,
I want to go back now to the arrival of
Doge at the SEC as it's happened in recent months,
(08:21):
like in you know, branches of government across Washington.
Speaker 3 (08:25):
Any sort of sense.
Speaker 7 (08:27):
That you have of what the feeling, what the mood
was like there as this long time nemesis of the
SEC now had all this influence over it.
Speaker 8 (08:36):
Yeah, so I think that there was a lot of
briefing for impact and everybody was freaked out about the
arrival of DOGE and what it would mean, just given
Elon Musk's extremely public, extremely you know, it's out there.
He does not like the SEC, and the fact that
he's active litigation with the with the agency, and I
(08:59):
feel like there was a lot more anxiety versus like
what has actually.
Speaker 3 (09:05):
Transpired A transpired.
Speaker 8 (09:07):
So Doze arrived later than any other like it seemed
like any other agency, like you know, at the beginning,
like USAID got gutted, The CFPB got gutted. There has
been headline after headline about drama at the IRS and
privacy and records and things like that. And the Doge
arrived at the SEC with like much much less fanfare.
(09:30):
It was like initially one guy and the leadership at
the SEC was like, hey, guys, dog is in the building.
Like it wasn't so much cloak and dagger. Like an
email went out staff wide and it said, you know,
there is a liaison or there's liaisons in the agency
with the DOGE person.
Speaker 4 (09:49):
You know, proceed, Remind me who is the DOGE person.
I've kind of lost track. We have this like spreadsheet
of all the DOGE people and like how they're tied
to Elon and I'm blanking on is it?
Speaker 3 (10:01):
Uh No?
Speaker 8 (10:03):
So this is someone His name is Ellie Mashori and
he is a former CFTC attorney and CFTC is another
DC financial regulator that regulates derivatives. And he most recently
was at Kalshi, which is an online trading I don't
want to call it, yeah.
Speaker 2 (10:26):
Like a Silicon Valley act startup.
Speaker 8 (10:28):
Yes, So he was in there, and you know, there's
was like we're looking for efficiencies, but like there has
not been the like the crazy headlines of you know,
people you know going in and ripping things up or
walking out with file boxes and things like that. I
think that's, you know, by design in a lot of ways,
because we all knew that, Like Musk has well known
(10:52):
beef with the SEC.
Speaker 7 (10:53):
So hold on, just to pause there for a second.
So you're saying it's it's by design. It's known that
Musk has feuded quite a bit with them, So you're saying,
what because it would be such a bad look that
they opted to not go that route.
Speaker 3 (11:07):
Yeah.
Speaker 8 (11:07):
And the other thing too, is that the leadership at
the SEC. So now we have a permanent chair, but
there was an interim chair.
Speaker 3 (11:14):
Remind us of who that is.
Speaker 8 (11:16):
So the new chair is Paul Atkins, and the interim
chair was Mark YadA, and he kind of did a
lot of restructuring before Doge arrived, and there were voluntary
buyouts and then there was like this more unusual one
time fifty thousand dollars you know, resign early kind of
payout dangle to SEC employees. And the other thing to
(11:39):
remember is that the SEC has an awful lot of power,
but it's a pretty small agency. It's only five thousand
employees and more than five hundred employees, so more than
ten percent have taken these voluntary buyouts, So like, how
much more can you kind of cut? You know, And
then also.
Speaker 3 (11:58):
Mark ask Musky, they came, I know five important.
Speaker 8 (12:02):
Yeah, you also got to keep in mind that, like
the SEC is Wall Street's main regulator. Who likes chaos
in the markets. We've seen that Trump does not like that.
You know, if you cut the SEC down to the
bare bones and there's chaos, that doesn't look good. So
I think there's been a little bit of like, let's
(12:22):
take a lighter touch at the SEC.
Speaker 3 (12:25):
I mean that's to be seen right.
Speaker 7 (12:26):
From Yeah, but as you were saying it, initially there
was just one person from DOGE there, and then I
think a second was added. And I saw some reporting
last week that we're now up to a third person
from DOGE at the SEC.
Speaker 3 (12:38):
Is that right?
Speaker 8 (12:39):
Yeah, I've seen that reporting also. But again there has
been much less kind of like people freaking out and chatter.
Speaker 6 (12:47):
I think just just to step back, like one thing
that has happened during the first few months of the
Trump administration that I don't think Elon Musk anticipated and
I don't think Tesla investors anticipated, is that Trump has
hesitated to like directly expose himself in ways that would
be politically damaging. So like he hasn't handed Musk a
(13:11):
bunch of cash, he hasn't directly dropped cases against must companies.
It does feel like there's hesitancy to do things that
would look like we are just paying back a guy
who bought, you know, who helped us.
Speaker 2 (13:25):
Win this election, who who put up you know, three.
Speaker 6 (13:28):
Hundred million or so dollars in contributions related to the election,
and here's the payback. They don't want to do that,
And of course it's reasonable why they wouldn't want to
do that, because that would be a very very bad look.
It be a very bad look to cut the regulator
of Wall Street at a time where there's tons of
anger on both sides because the world's richest man wanted
them to. And so I think when you're seeing, if
(13:50):
we're seeing restraint, the restraint that we're seeing has to
do with the politics of this.
Speaker 7 (13:55):
Yep, Nicola, thank you very much for joining us, and
we will see again down Thanks for having me. Now
we're joined by Madelin Mecklberg, our Texas legal reporter, Madlin.
Speaker 3 (14:10):
Welcome to the show.
Speaker 9 (14:11):
Thanks for having me now.
Speaker 7 (14:12):
Madeline, tell us all about the formation of this place,
star Base, and about the vote that happened last week,
and then give us like a super abbreviated history of
what led to it.
Speaker 5 (14:24):
Try to be abbreviated, but I could talk about this forever.
I'm so excited to have the opportunity to do it today.
It is incredibly fascinating. But basically, the idea for Starbase
started in Texas more than a decade ago, when SpaceX
first started buying land in the very southern tip of
the state along the Gulf of Mexico slash America.
Speaker 9 (14:45):
And it really started building in Ernest in twenty eighteen,
and they've created this community of a giant rocket manufacturing facility,
a testing site, and a launch site for SpaceX's Starship rocket.
And essentially what you have there is this huge futuristic
production facility and then dozens of tiny houses and airstream
(15:09):
trailers where employees of SpaceX live with their families, their partners.
It used to be a really quiet retirement community kind
of in the middle of nowhere in Texas. It's really
far out there. But over this past decade period, SpaceX
has been building, They've been growing, and all that growth
culminated in a vote this past weekend where residents overwhelmingly
(15:33):
supported an initiative to create their own city and local government.
Speaker 3 (15:37):
Elon won on an election, Max, you finally got it.
Speaker 6 (15:41):
Well, you know, when you fail in Wisconsin to southern Texas,
there you go.
Speaker 2 (15:45):
I will say, I believe almost all the voters work
for Elon Musk.
Speaker 3 (15:50):
Is that right? All of them?
Speaker 2 (15:52):
Like ninety percent?
Speaker 9 (15:53):
I don't know, Madeline, that's correct, Yes, that is exactly right.
Speaker 5 (15:56):
They all either work for Elon or have a loved
one who works for Elon.
Speaker 6 (16:01):
For the most part, Madelin did find the one guy.
I mean, there are a handful of holdouts in this community.
Speaker 3 (16:07):
Yeah, but they're.
Speaker 6 (16:07):
Essentially like the Homer Papa, right, Yeah, he is a
great character.
Speaker 3 (16:12):
Tell us about him for a second, Madeline.
Speaker 5 (16:14):
That's right.
Speaker 9 (16:15):
Homer represents the old guard and what this community used
to be, which was, like I mentioned, a retirement community,
but also a place for people who just wanted to
get away from everybody else. It's like a twenty mile
drive from the closest city, which is Brownsville, which is
to call it a city, you know, a reserve judgment
or that in air quotes in air quotes exactly. But
(16:36):
basically Homer has lived there since the seventies and as
he told us, he used to be able to walk
naked down the beach, down the road. He was totally
by himself down there in this nature preserve. And so
he is part of this really small group, this dwindling
group of landowners who have been there since before SpaceX
and who are who have refused to turn their property
(16:58):
over to Elon and their aff's basically, so they kind
of represent this last resistance to the star base vote.
But obviously that resistance is really tiny in number.
Speaker 6 (17:09):
Regular listeners will know. We've talked about this a couple
times on the podcast. Like Madlin's saying was this, it
was kind of, I think served as sort of like
the working man's beach for Brownsville, Like it was a
place where anyone goes, open to the public, and there
was also full of these kind of like you know,
sort of hippy, dippy ish older folks who moved to
(17:29):
the beach, and like this guy that Madeline is describing,
you know, sort of living on off the grid bohemian
lifestyle and.
Speaker 3 (17:39):
All of a sudden life we all aspire to, Yeah,
and all of.
Speaker 6 (17:42):
A sudden, like these gigantic rockets are going off there
all the time, and the ground is literally shaking.
Speaker 7 (17:49):
Right, and it's suddenly become like almost the most futuristic
or one of the most futuristic places on earth. So
Madeline until this weekend, or perhaps even including now, I
don't know how things work postpote. This whole area was
just unincorporated. If someone's home burned down or was burning down,
there was no fire department, there's no blank or did
(18:13):
they lean on Brownsville for that sort of thing.
Speaker 5 (18:15):
Yeah, they were unincorporated, but it wasn't like they were
totally off by themselves. Basically how it works in Texas
is if you're not a city, the local government authority
that is over all those things is the county. So
in this case that's Cameron County, and they've kind of
reached an equilibrium with them as far as offering public services.
They do have fire service out there, they do have
(18:38):
electricity and utilities and water and all those things that
make it pleasant to live in house. But right, they
have not had a local city government up to this point.
Speaker 4 (18:48):
Madland, you see this effort bye you on to create
his own city as part of like this larger push there.
You know, there's a lot of talk about freedom cities
and like the network state, Like what is his grand
and is it just that like they wanted it to
be easier to build housing for their employees, or is
he going to start like building schools and creating his
(19:08):
own like star based police force. Like how grand of
a scheme is this?
Speaker 5 (19:13):
That is the question. Basically, you'll you and your listeners
will be unsurprised to know that we got basically no
information from SpaceX about this, no information from the candidates
running for public office about what their big vision is.
But you talked about housing and building, and I think
that is really the primary and immediate thing that we're
(19:35):
going to see happen in this case. What they have
said is that they want to be able to control
the pace of their own growth and development in the region.
At this point, if they want to build anything new,
they have to get permission from Cameron County.
Speaker 3 (19:48):
And has Cameron County pushed back or slowed them down?
Speaker 9 (19:52):
Well, we know that about a month before they requested
this election, Cameron County rejected a proposal by SpaceX to
build moremultiple townhouses on a few different lots, and so
at that time, an engineer for SpaceX basically said, you know,
we have hundreds of people on a wait list who
are dying to come live.
Speaker 5 (20:10):
Out here in our little community, we promise, and we
really need to be able to build as much housing
as we can. And so they haven't come out and
said explicitly, you know, we're frustrated by the pace of
approvals and the rejection we're getting from Cameron County. But
that's kind of the unspoken idea here of what initiated
this effort.
Speaker 4 (20:29):
So who is the mayor? Like, the city now has
like three elected officials, right, So who exactly is the mayor?
Speaker 3 (20:35):
Again? That's right.
Speaker 5 (20:36):
So they've created it's a city commission technically, and it's
got a mayor and two city commissioners, all of whom
are current or former SpaceX employees. The mayor is a
guy named Bobby Peden, and I can pull up his
title for you. He's the vice president of Texas Test
and Launch down in Starbase, and that's from his LinkedIn
(20:56):
page because he did not answer my many phone calls
and emails and letters sent to his address.
Speaker 2 (21:01):
I mean, we all know who the mayor really is
going to be right.
Speaker 7 (21:08):
With the mergers, since the guy was like the huge
statue of his of his face there, you know, is
it that one that was by the way about the statue?
Speaker 2 (21:16):
What's up with that?
Speaker 1 (21:18):
Yeah, there's it's as you drive out there, it's a
really surreal experience because you go from a city to
basically nothing for many miles on this highway, and there's
a bunch of trees on the side of the road,
and then all of a sudden, the trees go away
and you see.
Speaker 9 (21:32):
A big gold bust of mister Musk's head and it's.
Speaker 3 (21:36):
Right next to these Oh it's gold.
Speaker 9 (21:38):
It's a color golden, maybe bronze. I don't know the
exact metal material.
Speaker 5 (21:42):
Please don't quiz me about that.
Speaker 2 (21:43):
But wait, is it a full body or just not
just the head? Actually no, just just.
Speaker 9 (21:49):
The head shoulders up.
Speaker 5 (21:51):
I think they're shoulders a neck at least, but it's
sitting right next to also these two big concrete slabs
that have some art of the doge dog, and then
another portrait of Elon as well, so it greets you
as you're driving out there.
Speaker 7 (22:07):
Just like Homer likes to hang out with his dogs,
as you guys told me so are so too does
Elon the Boss hang out with his doze dogs.
Speaker 3 (22:14):
How tall is this thing made? One?
Speaker 5 (22:17):
That's a really great question.
Speaker 3 (22:19):
Very tall?
Speaker 5 (22:20):
I don't I don't have an exact matter for you,
but it's imposing, we'll say, Max.
Speaker 3 (22:30):
This is although, of course, part of a broader.
Speaker 7 (22:33):
I don't know if campaigns the term, but initiated by
Musk to put his stamp on Texas all across the state.
Speaker 6 (22:41):
Yeah, and not just Texas, but to kind of present
himself as as he long has as as this kind
of industrial titan, as this guy who's you know, making
a lot of industry from yeah, from from as he
sees it.
Speaker 2 (22:58):
Nothing. I mean.
Speaker 6 (22:58):
One of the weirdest parts of of the the story,
as we've talked about it before, is you know, as
Musk saw it, he just sort of spun the globe
and you know, put his finger on a map where
it looked like it wasn't totally inhabited.
Speaker 2 (23:09):
Of course, there were there were people there, but just
not that many.
Speaker 6 (23:13):
And like Yeah, like creating this kind of beacon of
American rocketry and private industry. You can see how this
this could, you know, assuming they're able to build a
bunch of houses and continue growing this uh community and
this headquarters or whatever it is, this place launch site.
You know, it's gonna be a real monument to Elon Muskin,
(23:36):
not just because of.
Speaker 2 (23:37):
The of the bus. Are the are the residents gonna
have to have his portrait in their home?
Speaker 7 (23:46):
I mean, I don't know, if I don't know if
half probably strongly encouraged to matt next steps that we
will be seeing coming out of Starbase on its way
to full proper municipality.
Speaker 5 (23:58):
Right, So, there's a lot of stuff that has to
be worked out. Honestly, when you create a city, there's
a lot. Texas gives a lot of leeway to cities
to determine what they want to do and what they
want to offer. So this city council is going to
have to sit down and decide do we want to
have a library system, do we want to have parts,
do we want to you know what, what do we
keep going?
Speaker 9 (24:19):
That's a great guess, we'll see what happens. They're going
to have to decide.
Speaker 5 (24:23):
A huge question is going to be money. You know,
if they want to do anything, they're going to need money. Traditionally,
cities make money by imposing property taxes on its residents,
but SpaceX owns practically all of the property in this
area and its employees rent from it, so it will
be if they do impose a property tax, it's a
(24:44):
tax that SpaceX is largely going to pay. But we
know also that cities can accept donations from a friendly
company that maybe has an interest in the community, So
that's that's something that we could look out for. I
don't know if anyone.
Speaker 9 (24:59):
Yeah, there's there a lot to choose from down there,
so it could be anyone, but they'll have to publicly
disclose it.
Speaker 5 (25:05):
And I think that's going to be the biggest thing
if I can just say, and aside about what I'm
personally excited about about this city, is that, unlike a company,
a government is in theory supposed to be open. They
have to have open meetings, they have to maintain public
records that they turn over to friendly reporters when they
file open records requests. So I think that's going to
be one of the first real tests of how this
(25:25):
city is operating. But that also involves them making decisions
about are we going to hire who are we going
to hire to manage these records? Where are we going
to house these records? Are they going to create a
city hall? Like, there's a ton of unanswered questions that
while legally they may be a city now, I mean,
it's it's.
Speaker 6 (25:39):
A potentially like huge economic boon for this community. And
I'm not just talking about Starbase. I'm talking about larger
Texas community. But it's something that's going to remake the geography,
the way it feels, and of course the culture.
Speaker 7 (25:53):
Yeah, I mean, I guess all these places now we're
going to have all these huge busts of musk made
by the way. So Starbase it's you know, the it's
a teeny tiny area, right, this town it's got to
be one of the smaller towns in the country.
Speaker 3 (26:06):
One just over a mile.
Speaker 5 (26:08):
Yeah, it's one point four or five square miles and
it's really lake long and narrow along the State Highway.
It's very odd.
Speaker 3 (26:17):
That is indeed super odd. Meta. This is terrific.
Speaker 7 (26:20):
You will have to come back again and tell us
As the town of star Base grows and booms and
they add and build more and more.
Speaker 5 (26:28):
We'll have you back on that would be fabulous. Thanks
for having me.
Speaker 7 (26:34):
Now, Max and Dan, you know, I actually had a
plan to do a sort of serious feud segment here
at the end Elon versus his very own Tesla board, because,
as reported by the Wall Street Journal, the Tesla board
has been, you know, doing a little bit of a
CEO search, thinking about maybe hut just in case we
(26:55):
need to replace this guy, which was kind of interesting.
But you know, Max, you think you've found something bigger,
more important than Elon Musk versus his very own Tessel board.
Speaker 6 (27:06):
Two wars on that CEO search. The board has disputed
that right. They've said that they are not conducting a
CEO search. Elon is the right, and the Journal is
essentially saying that they stand by their phy.
Speaker 2 (27:17):
Yeah, yeah, okay, I.
Speaker 4 (27:17):
Just want to say that, like Tesla's board has kicked
the tires on finding a new CEO before this came
up during in the DELA. This came up in court
in Delaware Transfer Court during the dispute about his pay package,
where like Antonio Gracias and James Murdoch who you know,
current former war members basically said, Oh, yeah, we've looked
for CEOs before, but you know, we just could never
(27:39):
find anyone with the vision and the drive to like
lead the company. So Elon is the CEO. And I
think that this is kind of what happened here. Like,
I think it's a great scoop by the Wall Street Journal,
but like the board has kicked the tires on trying
to find someone new in the past. It sounds like
they've done it again. But the story said that they
were like looking to hire a search firm, not that
(27:59):
they like, Like was how wide and the serious this
attempt was this time is not clear?
Speaker 2 (28:07):
All right.
Speaker 6 (28:07):
The real feud, though, forget the board of the world's
biggest company may be attempting to replace the world's richest man.
The real feud is between Elon Musk and the Westlake
Hills like homeowners Association or whatever. These the homeowners of
this community in Texas where Elon Musk has relocated.
Speaker 3 (28:24):
Not okay, not near Star based different.
Speaker 6 (28:27):
Now, this is a sort of you know, suburban, upper
middle class suburb in Austin where Elon Musk has a home.
And The New York Times has a absolutely hilarious story
about Elon Musk's battle with some of the residents who, unsurprisingly,
you spend a lot of money on your you know,
(28:47):
suburban home, you pay property taxes, whatever.
Speaker 2 (28:51):
It's not great when like a rich, kind of erratic
late night.
Speaker 6 (28:57):
Partying, late night flowing buying guy shows with a huge
security detail shows up in your community.
Speaker 2 (29:05):
They put up a giant fence around this home. Residents
are mad about that.
Speaker 6 (29:08):
There's a gate to let staff in and out of
this property that Elon Musk owns.
Speaker 2 (29:13):
They're not happy about that.
Speaker 3 (29:14):
And because they think it's an iore. What's the issue.
Speaker 6 (29:17):
Yeah, it's like a lot of traffic and so on. Yeah,
it's an i soore. Oh yeah, there as many of
these residentsy it. They're violating lots of the sort of
homeowners associated the zoning rules for this community.
Speaker 3 (29:28):
Yeah.
Speaker 4 (29:29):
Westlake Hills in Austin is like it's like the Atherton.
It's like Atherton. It's like it is the place where wealthy,
it's like it's it's the wealthy, hilly, leafy like area
of Austin that's near the Colorado River, and it's where
Elon now lives. It's where it's where Elon supposedly was
building this compound. So you know, the idea was that
he had like a house and then multiple houses, with
(29:51):
the sort of vision that eventually maybe all of his
you know, female friends and children would potentially all live together.
Speaker 2 (29:58):
But that hasn't really worked out.
Speaker 4 (30:00):
Like they're not they're not all living with him.
Speaker 2 (30:03):
Yeah. Wait, let me get to the feud.
Speaker 6 (30:04):
So Paul Hemmer, tesla owner, longtime resident, got so frustrated
with the Elon Musk's comings and goings and construction he
got a drone. He flew it over the house to
check for violations. He started reporting those violations to local officials,
and Elon Musk hit back with his own complaints about
(30:25):
Paul Hemmer, saying.
Speaker 3 (30:26):
That he's flying drones over my house.
Speaker 2 (30:28):
Okay.
Speaker 6 (30:29):
What they said is that he was walking around the
community naked. Mister Hemmer denies this. He was just wearing
black underwear. Now there was a second allegation that he
peeded on the street, and now Hemmer and he.
Speaker 3 (30:42):
Actually didn't kissed while he was walking his dogs.
Speaker 6 (30:45):
Response to the query from The New York Times, mister
Hemmer said, the cameras got me.
Speaker 2 (30:49):
It's it's scary. They have guys sitting and watching me pee,
So he caught to that one.
Speaker 6 (30:55):
I don't know the disputing the charge of nakedness, but
but this is, of course comes you just gotta go.
Speaker 2 (31:02):
Yeah, I mean, like no one's on the street.
Speaker 6 (31:05):
I'm sort of somewhat sympathetic to Paul Hemmer's complaint.
Speaker 7 (31:08):
I'm not entirely sure it's better than Elon versus the
Tesla board, but it is. It is good, all right, Max,
do keep reporting this out.
Speaker 6 (31:17):
I guess it's just like a lesson to all of us,
Like before you complain about your neighbors, your billionaire neighbors gate,
you know, make sure your own house is in order.
Speaker 3 (31:26):
Max, Dana, thanks as always.
Speaker 4 (31:28):
Okay, guys, that was great.
Speaker 3 (31:31):
Bye.
Speaker 7 (31:40):
This episode was produced by Stacy Wong Lake, Maples Handles
engineering and daper self fact checks. Our editor is Anna
Massa Rakas, and our supervising producers Magnus Hendrickson. The Elon
In theme is written and performed by Taka Yasuzawa and
Alex sugi Era. Brendan Francis Newnham is our executive producer,
and Sage Bowman as the head of Bloomberg Podcast. A
(32:00):
big thanks as always to our supporters Joel Webber and Bradstone.
Speaker 3 (32:05):
I'm David Papadoppolos.
Speaker 7 (32:06):
If you have a minute, rate and review our show,
it'll help other listeners find us.
Speaker 3 (32:11):
See you next week.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:07):
Let me tell you we have a new star.
Speaker 3 (00:10):
A star is born Elon On mars Juson Kennedy.
Speaker 4 (00:14):
He is the Thomas Edison plus plus plus of our age.
Speaker 5 (00:18):
Probably his whole life is from a position of insecurity.
I feel for the guys. I would say ninety eight
percent really appreciate what he does.
Speaker 6 (00:25):
But those two percent.
Speaker 5 (00:26):
That are nasty, they are all pay in four folks.
Speaker 7 (00:30):
We were meant for great things in the United States
of America, and Elon reminds.
Speaker 6 (00:34):
Us of that we don't have a fourth branch of
governments called Elon.
Speaker 2 (00:39):
Musk mock mus.
Speaker 7 (00:46):
Welcome to Elon and Bloomberg's weekly podcast about Elon muskets Tuesday,
May sixth. I'm your host, David Papadopolis. Now Elon may
be preparing to wind down his time in Washington, but
Doge certainly isn't done yet. Just last week, it's stepped
up at scrutiny of the Securities in Exchange Commission, and
Elon's relationship with the powerful financial regulator has been shall
(01:08):
we say tens.
Speaker 3 (01:10):
The two sides have squared.
Speaker 7 (01:11):
Off again and again over the years, and he stands
to benefit enormously from a smaller and perhaps more lenient SEC.
Speaker 3 (01:20):
Meanwhile, Elon is on his way to founding.
Speaker 7 (01:22):
His own brand spanking new city down along the Mexican border.
Speaker 3 (01:27):
Madlin Meckleberg will.
Speaker 7 (01:29):
Join us later to talk about the birth of Starbase Texas,
but we'll start with Doge and the SEC.
Speaker 3 (01:35):
And to do that, I'm.
Speaker 7 (01:35):
Here with our regulars, BusinessWeek's Max Chafkin and Ace Elon
reporter Dana Hall. Max, Dana, welcome to you both.
Speaker 2 (01:43):
Hey David, Hey David.
Speaker 3 (01:45):
And from Washington, DC.
Speaker 7 (01:46):
We're joined by Nicola White, Bloomberg's SEC reporter Nicola, Hello,
welcome to the show.
Speaker 2 (01:52):
Hi there.
Speaker 3 (01:53):
Okay, so Doze stepping up a bit. It's scrutiny the SEC.
Speaker 7 (01:58):
Let's go back to the r archives and remember what
Musk said about the SEC years ago.
Speaker 5 (02:05):
I want to be clear, I do not respect the SEC.
I do not respect them.
Speaker 7 (02:10):
Dana Hull tell us a little bit more about those
comments for Musk and help us set the stage here
for Doge's incursion into the SEC.
Speaker 3 (02:20):
Now, So, Elon.
Speaker 4 (02:21):
Musk has had a long standing feud with the SEC,
stretching back years. Probably the highlight was in twenty eighteen.
As you all may remember, in August, he attempted to
take Tesla private. He tweeted out that he was, you know,
considering taking tesl private at four twenty a share. That
got him into huge trouble with the SEC. That the
(02:41):
SEC ultimately fined him twenty million dollars and he couldn't
be chair of the company for at least three years.
And he's just always been super angry at the SEC,
particularly the office in San Francisco, and you know, at
times has called them the short sellar Enrichment Commission. And
this is a guy who's not particularly fond of regulation.
(03:02):
He sees it as holding back you know, industry and
all of his enterprises. And now that he's a very
powerful figure in the Trump administration, I think that he,
you know, of all the agencies where Doge could really
make it smark, I would think that the SEC would
be the one that would have among the most importance
to Musk and his companies. And the SEC has also
(03:24):
investigated Musk's companies with Tesla and the way that it
marketed Autopilot. Nikola knows better than I do, but there
are various probes that have been launched and then it's
not really clear what the status is if they are
still under active investigation, if they've died on the line,
if they've been referred to DOJ or AG offices like.
There are a lot of questions about what happened to
(03:45):
those SEC investigations and where the people leading those investigations
are they still even at the agency.
Speaker 8 (03:51):
Yeah, and there's also a lawsuit against Musk for the
way he just or didn't disclose his amassing of Twitter
shares before he basically did a takeover bid, and that's
that was filed days before Trump's inauguration, So it was
like the they squeaked it in right before the administrative change.
Speaker 7 (04:12):
And as Dana was just alluding to, do we have
a sense of where that one is.
Speaker 3 (04:18):
His purchase of Twitter shares before you launched a bid.
Speaker 8 (04:21):
That is a question on everyone's mind. I think I
know several people who have alerts set up for the
docket for that case. Any movement in that case would
be of high interest to anybody watching the SEC, anybody
who's into following what's happening with Elon Musk. We don't
have any update on that yet, and there's a lot
of eyes on what happens to that case. The SEC
(04:44):
is in like a weird position. If they dropped the
case wouldn't look good. If they go full throttle, and like,
you know, try to sue Musk for hundreds of millions
of dollars that also might not look good. So they're
in a very weird, uncomfortable position.
Speaker 3 (04:58):
I want to go back for second.
Speaker 7 (04:59):
Next, what Dana was saying and calling the SEC and
saying it doesn't stand for the Securities in Exchange Commission
Musk that it stands for the short Seller Enrichment Commission.
Speaker 6 (05:10):
There was also a vulgar one that he not going
to bring up on this podcast, but well you just
did show it's all right.
Speaker 2 (05:17):
But anyway, and as we.
Speaker 7 (05:19):
Know, there is no group of humans in the world
who Elon Musks hates more than the short sellars. And
in his mind, the SEC was just doing the bidding
of the shorts.
Speaker 3 (05:29):
He also is called the SEC at one point or
he eeked or tweeted.
Speaker 7 (05:34):
About him, called them shameless puppets of Wall Street. Has
there ever been a human who has been more at
odds and feuded more with the SEC than Elon Musk.
Speaker 6 (05:47):
Well, not that I'm aware of I mean, the way
Elon Musk runs his companies is sort of like totally
opposed to everything that the SEC stands for. Like Elon
Musk's empire is a web of conflicts of interest, lots
of self dealing, weird shared ownership stakes, like Musk is.
Speaker 3 (06:08):
A sort of weird midnight tweets.
Speaker 6 (06:09):
Yeah yeah, right, And it's just like a whole bunch
of things that like are not in keeping with the
way the sort of conventional wisdom.
Speaker 3 (06:19):
About how public company.
Speaker 2 (06:21):
CEOs are supposed to act.
Speaker 6 (06:23):
Now, the one thing I'll say is, this is not
like a secret and that's what kind of always made
this these these disputes with the SEC kind of funny.
It's not like, you know, most Tesla investors and most
of the investors who are in Musk companies understand this
about him, understand that he's different, and that's why they
like him. And so it is this kind of weird
(06:45):
thing where where Musk like seems to continually either violate
securities law or walk right up to the line where
where I don't know, like a neutral observer.
Speaker 2 (06:54):
Would probably think he was violating Security's law.
Speaker 6 (06:57):
And the SEC has really struggled to and a glove
on him effectively.
Speaker 2 (07:02):
In other words, they've find him, they've found.
Speaker 7 (07:05):
Him twenty million dollars, but he hasn't ever changed his behavior.
Speaker 2 (07:08):
He just goes from one.
Speaker 6 (07:09):
It's like it's like somebody, it's like a rich guy
who gets caught speeding in his Lamborghini. Right, It's like
he pays a ticket and he and he keeps on driving.
Speaker 7 (07:17):
But wasn't he also forced to step down his chair
of Tesla coming out of one of these lawsuits.
Speaker 4 (07:22):
Yeah, well, yeah he was forced. But so what, David,
He's still on the board. I mean it's still his board.
He's still the largest chareholder.
Speaker 2 (07:30):
So yeah, he was.
Speaker 4 (07:31):
He stepped down his chair. Now Robin Denholm is the chair,
but he's still on the board.
Speaker 7 (07:36):
It sounds like a big deal, but it actually doesn't
mean anything.
Speaker 6 (07:39):
He had a Twitter sitter, remember, like made him get
a guy, and we always wondered who, Like, who's the
guy who's gotta like vet Elon Musk's tweet this guy,
And you know, for a while it seemed like maybe
it was possible that this was actually happening. I don't know,
it doesn't let me just say, it doesn't seem like
the Twitter sitter was empowered the right to do a
(08:01):
lot of city.
Speaker 7 (08:01):
I forgot about that that the SEC made somebody walk
around with his phone as if like you know that
with a person carrying the codes to the nuclear you know,
nuclear warheads that the president has or something. But Nicola,
I want to go back now to the arrival of
Doge at the SEC as it's happened in recent months,
(08:21):
like in you know, branches of government across Washington.
Speaker 3 (08:25):
Any sort of sense.
Speaker 7 (08:27):
That you have of what the feeling, what the mood
was like there as this long time nemesis of the
SEC now had all this influence over it.
Speaker 8 (08:36):
Yeah, so I think that there was a lot of
briefing for impact and everybody was freaked out about the
arrival of DOGE and what it would mean, just given
Elon Musk's extremely public, extremely you know, it's out there.
He does not like the SEC, and the fact that
he's active litigation with the with the agency, and I
(08:59):
feel like there was a lot more anxiety versus like
what has actually.
Speaker 3 (09:05):
Transpired A transpired.
Speaker 8 (09:07):
So Doze arrived later than any other like it seemed
like any other agency, like you know, at the beginning,
like USAID got gutted, The CFPB got gutted. There has
been headline after headline about drama at the IRS and
privacy and records and things like that. And the Doge
arrived at the SEC with like much much less fanfare.
(09:30):
It was like initially one guy and the leadership at
the SEC was like, hey, guys, dog is in the building.
Like it wasn't so much cloak and dagger. Like an
email went out staff wide and it said, you know,
there is a liaison or there's liaisons in the agency
with the DOGE person.
Speaker 4 (09:49):
You know, proceed, Remind me who is the DOGE person.
I've kind of lost track. We have this like spreadsheet
of all the DOGE people and like how they're tied
to Elon and I'm blanking on is it?
Speaker 3 (10:01):
Uh No?
Speaker 8 (10:03):
So this is someone His name is Ellie Mashori and
he is a former CFTC attorney and CFTC is another
DC financial regulator that regulates derivatives. And he most recently
was at Kalshi, which is an online trading I don't
want to call it, yeah.
Speaker 2 (10:26):
Like a Silicon Valley act startup.
Speaker 8 (10:28):
Yes, So he was in there, and you know, there's
was like we're looking for efficiencies, but like there has
not been the like the crazy headlines of you know,
people you know going in and ripping things up or
walking out with file boxes and things like that. I
think that's, you know, by design in a lot of ways,
because we all knew that, Like Musk has well known
(10:52):
beef with the SEC.
Speaker 7 (10:53):
So hold on, just to pause there for a second.
So you're saying it's it's by design. It's known that
Musk has feuded quite a bit with them, So you're saying,
what because it would be such a bad look that
they opted to not go that route.
Speaker 3 (11:07):
Yeah.
Speaker 8 (11:07):
And the other thing too, is that the leadership at
the SEC. So now we have a permanent chair, but
there was an interim chair.
Speaker 3 (11:14):
Remind us of who that is.
Speaker 8 (11:16):
So the new chair is Paul Atkins, and the interim
chair was Mark YadA, and he kind of did a
lot of restructuring before Doge arrived, and there were voluntary
buyouts and then there was like this more unusual one
time fifty thousand dollars you know, resign early kind of
payout dangle to SEC employees. And the other thing to
(11:39):
remember is that the SEC has an awful lot of power,
but it's a pretty small agency. It's only five thousand
employees and more than five hundred employees, so more than
ten percent have taken these voluntary buyouts, So like, how
much more can you kind of cut? You know, And
then also.
Speaker 3 (11:58):
Mark ask Musky, they came, I know five important.
Speaker 8 (12:02):
Yeah, you also got to keep in mind that, like
the SEC is Wall Street's main regulator. Who likes chaos
in the markets. We've seen that Trump does not like that.
You know, if you cut the SEC down to the
bare bones and there's chaos, that doesn't look good. So
I think there's been a little bit of like, let's
(12:22):
take a lighter touch at the SEC.
Speaker 3 (12:25):
I mean that's to be seen right.
Speaker 7 (12:26):
From Yeah, but as you were saying it, initially there
was just one person from DOGE there, and then I
think a second was added. And I saw some reporting
last week that we're now up to a third person
from DOGE at the SEC.
Speaker 3 (12:38):
Is that right?
Speaker 8 (12:39):
Yeah, I've seen that reporting also. But again there has
been much less kind of like people freaking out and chatter.
Speaker 6 (12:47):
I think just just to step back, like one thing
that has happened during the first few months of the
Trump administration that I don't think Elon Musk anticipated and
I don't think Tesla investors anticipated, is that Trump has
hesitated to like directly expose himself in ways that would
be politically damaging. So like he hasn't handed Musk a
(13:11):
bunch of cash, he hasn't directly dropped cases against must companies.
It does feel like there's hesitancy to do things that
would look like we are just paying back a guy
who bought, you know, who helped us.
Speaker 2 (13:25):
Win this election, who who put up you know, three.
Speaker 6 (13:28):
Hundred million or so dollars in contributions related to the election,
and here's the payback. They don't want to do that,
And of course it's reasonable why they wouldn't want to
do that, because that would be a very very bad look.
It be a very bad look to cut the regulator
of Wall Street at a time where there's tons of
anger on both sides because the world's richest man wanted
them to. And so I think when you're seeing, if
(13:50):
we're seeing restraint, the restraint that we're seeing has to
do with the politics of this.
Speaker 7 (13:55):
Yep, Nicola, thank you very much for joining us, and
we will see again down Thanks for having me. Now
we're joined by Madelin Mecklberg, our Texas legal reporter, Madlin.
Speaker 3 (14:10):
Welcome to the show.
Speaker 9 (14:11):
Thanks for having me now.
Speaker 7 (14:12):
Madeline, tell us all about the formation of this place,
star Base, and about the vote that happened last week,
and then give us like a super abbreviated history of
what led to it.
Speaker 5 (14:24):
Try to be abbreviated, but I could talk about this forever.
I'm so excited to have the opportunity to do it today.
It is incredibly fascinating. But basically, the idea for Starbase
started in Texas more than a decade ago, when SpaceX
first started buying land in the very southern tip of
the state along the Gulf of Mexico slash America.
Speaker 9 (14:45):
And it really started building in Ernest in twenty eighteen,
and they've created this community of a giant rocket manufacturing facility,
a testing site, and a launch site for SpaceX's Starship rocket.
And essentially what you have there is this huge futuristic
production facility and then dozens of tiny houses and airstream
(15:09):
trailers where employees of SpaceX live with their families, their partners.
It used to be a really quiet retirement community kind
of in the middle of nowhere in Texas. It's really
far out there. But over this past decade period, SpaceX
has been building, They've been growing, and all that growth
culminated in a vote this past weekend where residents overwhelmingly
(15:33):
supported an initiative to create their own city and local government.
Speaker 3 (15:37):
Elon won on an election, Max, you finally got it.
Speaker 6 (15:41):
Well, you know, when you fail in Wisconsin to southern Texas,
there you go.
Speaker 2 (15:45):
I will say, I believe almost all the voters work
for Elon Musk.
Speaker 3 (15:50):
Is that right? All of them?
Speaker 2 (15:52):
Like ninety percent?
Speaker 9 (15:53):
I don't know, Madeline, that's correct, Yes, that is exactly right.
Speaker 5 (15:56):
They all either work for Elon or have a loved
one who works for Elon.
Speaker 6 (16:01):
For the most part, Madelin did find the one guy.
I mean, there are a handful of holdouts in this community.
Speaker 3 (16:07):
Yeah, but they're.
Speaker 6 (16:07):
Essentially like the Homer Papa, right, Yeah, he is a
great character.
Speaker 3 (16:12):
Tell us about him for a second, Madeline.
Speaker 5 (16:14):
That's right.
Speaker 9 (16:15):
Homer represents the old guard and what this community used
to be, which was, like I mentioned, a retirement community,
but also a place for people who just wanted to
get away from everybody else. It's like a twenty mile
drive from the closest city, which is Brownsville, which is
to call it a city, you know, a reserve judgment
or that in air quotes in air quotes exactly. But
(16:36):
basically Homer has lived there since the seventies and as
he told us, he used to be able to walk
naked down the beach, down the road. He was totally
by himself down there in this nature preserve. And so
he is part of this really small group, this dwindling
group of landowners who have been there since before SpaceX
and who are who have refused to turn their property
(16:58):
over to Elon and their aff's basically, so they kind
of represent this last resistance to the star base vote.
But obviously that resistance is really tiny in number.
Speaker 6 (17:09):
Regular listeners will know. We've talked about this a couple
times on the podcast. Like Madlin's saying was this, it
was kind of, I think served as sort of like
the working man's beach for Brownsville, Like it was a
place where anyone goes, open to the public, and there
was also full of these kind of like you know,
sort of hippy, dippy ish older folks who moved to
(17:29):
the beach, and like this guy that Madeline is describing,
you know, sort of living on off the grid bohemian
lifestyle and.
Speaker 3 (17:39):
All of a sudden life we all aspire to, Yeah,
and all of.
Speaker 6 (17:42):
A sudden, like these gigantic rockets are going off there
all the time, and the ground is literally shaking.
Speaker 7 (17:49):
Right, and it's suddenly become like almost the most futuristic
or one of the most futuristic places on earth. So
Madeline until this weekend, or perhaps even including now, I
don't know how things work postpote. This whole area was
just unincorporated. If someone's home burned down or was burning down,
there was no fire department, there's no blank or did
(18:13):
they lean on Brownsville for that sort of thing.
Speaker 5 (18:15):
Yeah, they were unincorporated, but it wasn't like they were
totally off by themselves. Basically how it works in Texas
is if you're not a city, the local government authority
that is over all those things is the county. So
in this case that's Cameron County, and they've kind of
reached an equilibrium with them as far as offering public services.
They do have fire service out there, they do have
(18:38):
electricity and utilities and water and all those things that
make it pleasant to live in house. But right, they
have not had a local city government up to this point.
Speaker 4 (18:48):
Madland, you see this effort bye you on to create
his own city as part of like this larger push there.
You know, there's a lot of talk about freedom cities
and like the network state, Like what is his grand
and is it just that like they wanted it to
be easier to build housing for their employees, or is
he going to start like building schools and creating his
(19:08):
own like star based police force. Like how grand of
a scheme is this?
Speaker 5 (19:13):
That is the question. Basically, you'll you and your listeners
will be unsurprised to know that we got basically no
information from SpaceX about this, no information from the candidates
running for public office about what their big vision is.
But you talked about housing and building, and I think
that is really the primary and immediate thing that we're
(19:35):
going to see happen in this case. What they have
said is that they want to be able to control
the pace of their own growth and development in the region.
At this point, if they want to build anything new,
they have to get permission from Cameron County.
Speaker 3 (19:48):
And has Cameron County pushed back or slowed them down?
Speaker 9 (19:52):
Well, we know that about a month before they requested
this election, Cameron County rejected a proposal by SpaceX to
build moremultiple townhouses on a few different lots, and so
at that time, an engineer for SpaceX basically said, you know,
we have hundreds of people on a wait list who
are dying to come live.
Speaker 5 (20:10):
Out here in our little community, we promise, and we
really need to be able to build as much housing
as we can. And so they haven't come out and
said explicitly, you know, we're frustrated by the pace of
approvals and the rejection we're getting from Cameron County. But
that's kind of the unspoken idea here of what initiated
this effort.
Speaker 4 (20:29):
So who is the mayor? Like, the city now has
like three elected officials, right, So who exactly is the mayor?
Speaker 3 (20:35):
Again? That's right.
Speaker 5 (20:36):
So they've created it's a city commission technically, and it's
got a mayor and two city commissioners, all of whom
are current or former SpaceX employees. The mayor is a
guy named Bobby Peden, and I can pull up his
title for you. He's the vice president of Texas Test
and Launch down in Starbase, and that's from his LinkedIn
(20:56):
page because he did not answer my many phone calls
and emails and letters sent to his address.
Speaker 2 (21:01):
I mean, we all know who the mayor really is
going to be right.
Speaker 7 (21:08):
With the mergers, since the guy was like the huge
statue of his of his face there, you know, is
it that one that was by the way about the statue?
Speaker 2 (21:16):
What's up with that?
Speaker 1 (21:18):
Yeah, there's it's as you drive out there, it's a
really surreal experience because you go from a city to
basically nothing for many miles on this highway, and there's
a bunch of trees on the side of the road,
and then all of a sudden, the trees go away
and you see.
Speaker 9 (21:32):
A big gold bust of mister Musk's head and it's.
Speaker 3 (21:36):
Right next to these Oh it's gold.
Speaker 9 (21:38):
It's a color golden, maybe bronze. I don't know the
exact metal material.
Speaker 5 (21:42):
Please don't quiz me about that.
Speaker 2 (21:43):
But wait, is it a full body or just not
just the head? Actually no, just just.
Speaker 9 (21:49):
The head shoulders up.
Speaker 5 (21:51):
I think they're shoulders a neck at least, but it's
sitting right next to also these two big concrete slabs
that have some art of the doge dog, and then
another portrait of Elon as well, so it greets you
as you're driving out there.
Speaker 7 (22:07):
Just like Homer likes to hang out with his dogs,
as you guys told me so are so too does
Elon the Boss hang out with his doze dogs.
Speaker 3 (22:14):
How tall is this thing made? One?
Speaker 5 (22:17):
That's a really great question.
Speaker 3 (22:19):
Very tall?
Speaker 5 (22:20):
I don't I don't have an exact matter for you,
but it's imposing, we'll say, Max.
Speaker 3 (22:30):
This is although, of course, part of a broader.
Speaker 7 (22:33):
I don't know if campaigns the term, but initiated by
Musk to put his stamp on Texas all across the state.
Speaker 6 (22:41):
Yeah, and not just Texas, but to kind of present
himself as as he long has as as this kind
of industrial titan, as this guy who's you know, making
a lot of industry from yeah, from from as he
sees it.
Speaker 2 (22:58):
Nothing. I mean.
Speaker 6 (22:58):
One of the weirdest parts of of the the story,
as we've talked about it before, is you know, as
Musk saw it, he just sort of spun the globe
and you know, put his finger on a map where
it looked like it wasn't totally inhabited.
Speaker 2 (23:09):
Of course, there were there were people there, but just
not that many.
Speaker 6 (23:13):
And like Yeah, like creating this kind of beacon of
American rocketry and private industry. You can see how this
this could, you know, assuming they're able to build a
bunch of houses and continue growing this uh community and
this headquarters or whatever it is, this place launch site.
You know, it's gonna be a real monument to Elon Muskin,
(23:36):
not just because of.
Speaker 2 (23:37):
The of the bus. Are the are the residents gonna
have to have his portrait in their home?
Speaker 7 (23:46):
I mean, I don't know, if I don't know if
half probably strongly encouraged to matt next steps that we
will be seeing coming out of Starbase on its way
to full proper municipality.
Speaker 5 (23:58):
Right, So, there's a lot of stuff that has to
be worked out. Honestly, when you create a city, there's
a lot. Texas gives a lot of leeway to cities
to determine what they want to do and what they
want to offer. So this city council is going to
have to sit down and decide do we want to
have a library system, do we want to have parts,
do we want to you know what, what do we
keep going?
Speaker 9 (24:19):
That's a great guess, we'll see what happens. They're going
to have to decide.
Speaker 5 (24:23):
A huge question is going to be money. You know,
if they want to do anything, they're going to need money. Traditionally,
cities make money by imposing property taxes on its residents,
but SpaceX owns practically all of the property in this
area and its employees rent from it, so it will
be if they do impose a property tax, it's a
(24:44):
tax that SpaceX is largely going to pay. But we
know also that cities can accept donations from a friendly
company that maybe has an interest in the community, So
that's that's something that we could look out for. I
don't know if anyone.
Speaker 9 (24:59):
Yeah, there's there a lot to choose from down there,
so it could be anyone, but they'll have to publicly
disclose it.
Speaker 5 (25:05):
And I think that's going to be the biggest thing
if I can just say, and aside about what I'm
personally excited about about this city, is that, unlike a company,
a government is in theory supposed to be open. They
have to have open meetings, they have to maintain public
records that they turn over to friendly reporters when they
file open records requests. So I think that's going to
be one of the first real tests of how this
(25:25):
city is operating. But that also involves them making decisions
about are we going to hire who are we going
to hire to manage these records? Where are we going
to house these records? Are they going to create a
city hall? Like, there's a ton of unanswered questions that
while legally they may be a city now, I mean,
it's it's.
Speaker 6 (25:39):
A potentially like huge economic boon for this community. And
I'm not just talking about Starbase. I'm talking about larger
Texas community. But it's something that's going to remake the geography,
the way it feels, and of course the culture.
Speaker 7 (25:53):
Yeah, I mean, I guess all these places now we're
going to have all these huge busts of musk made
by the way. So Starbase it's you know, the it's
a teeny tiny area, right, this town it's got to
be one of the smaller towns in the country.
Speaker 3 (26:06):
One just over a mile.
Speaker 5 (26:08):
Yeah, it's one point four or five square miles and
it's really lake long and narrow along the State Highway.
It's very odd.
Speaker 3 (26:17):
That is indeed super odd. Meta. This is terrific.
Speaker 7 (26:20):
You will have to come back again and tell us
As the town of star Base grows and booms and
they add and build more and more.
Speaker 5 (26:28):
We'll have you back on that would be fabulous. Thanks
for having me.
Speaker 7 (26:34):
Now, Max and Dan, you know, I actually had a
plan to do a sort of serious feud segment here
at the end Elon versus his very own Tesla board, because,
as reported by the Wall Street Journal, the Tesla board
has been, you know, doing a little bit of a
CEO search, thinking about maybe hut just in case we
(26:55):
need to replace this guy, which was kind of interesting.
But you know, Max, you think you've found something bigger,
more important than Elon Musk versus his very own Tessel board.
Speaker 6 (27:06):
Two wars on that CEO search. The board has disputed
that right. They've said that they are not conducting a
CEO search. Elon is the right, and the Journal is
essentially saying that they stand by their phy.
Speaker 2 (27:17):
Yeah, yeah, okay, I.
Speaker 4 (27:17):
Just want to say that, like Tesla's board has kicked
the tires on finding a new CEO before this came
up during in the DELA. This came up in court
in Delaware Transfer Court during the dispute about his pay package,
where like Antonio Gracias and James Murdoch who you know,
current former war members basically said, Oh, yeah, we've looked
for CEOs before, but you know, we just could never
(27:39):
find anyone with the vision and the drive to like
lead the company. So Elon is the CEO. And I
think that this is kind of what happened here. Like,
I think it's a great scoop by the Wall Street Journal,
but like the board has kicked the tires on trying
to find someone new in the past. It sounds like
they've done it again. But the story said that they
were like looking to hire a search firm, not that
(27:59):
they like, Like was how wide and the serious this
attempt was this time is not clear?
Speaker 2 (28:07):
All right.
Speaker 6 (28:07):
The real feud, though, forget the board of the world's
biggest company may be attempting to replace the world's richest man.
The real feud is between Elon Musk and the Westlake
Hills like homeowners Association or whatever. These the homeowners of
this community in Texas where Elon Musk has relocated.
Speaker 3 (28:24):
Not okay, not near Star based different.
Speaker 6 (28:27):
Now, this is a sort of you know, suburban, upper
middle class suburb in Austin where Elon Musk has a home.
And The New York Times has a absolutely hilarious story
about Elon Musk's battle with some of the residents who, unsurprisingly,
you spend a lot of money on your you know,
(28:47):
suburban home, you pay property taxes, whatever.
Speaker 2 (28:51):
It's not great when like a rich, kind of erratic
late night.
Speaker 6 (28:57):
Partying, late night flowing buying guy shows with a huge
security detail shows up in your community.
Speaker 2 (29:05):
They put up a giant fence around this home. Residents
are mad about that.
Speaker 6 (29:08):
There's a gate to let staff in and out of
this property that Elon Musk owns.
Speaker 2 (29:13):
They're not happy about that.
Speaker 3 (29:14):
And because they think it's an iore. What's the issue.
Speaker 6 (29:17):
Yeah, it's like a lot of traffic and so on. Yeah,
it's an i soore. Oh yeah, there as many of
these residentsy it. They're violating lots of the sort of
homeowners associated the zoning rules for this community.
Speaker 3 (29:28):
Yeah.
Speaker 4 (29:29):
Westlake Hills in Austin is like it's like the Atherton.
It's like Atherton. It's like it is the place where wealthy,
it's like it's it's the wealthy, hilly, leafy like area
of Austin that's near the Colorado River, and it's where
Elon now lives. It's where it's where Elon supposedly was
building this compound. So you know, the idea was that
he had like a house and then multiple houses, with
(29:51):
the sort of vision that eventually maybe all of his
you know, female friends and children would potentially all live together.
Speaker 2 (29:58):
But that hasn't really worked out.
Speaker 4 (30:00):
Like they're not they're not all living with him.
Speaker 2 (30:03):
Yeah. Wait, let me get to the feud.
Speaker 6 (30:04):
So Paul Hemmer, tesla owner, longtime resident, got so frustrated
with the Elon Musk's comings and goings and construction he
got a drone. He flew it over the house to
check for violations. He started reporting those violations to local officials,
and Elon Musk hit back with his own complaints about
(30:25):
Paul Hemmer, saying.
Speaker 3 (30:26):
That he's flying drones over my house.
Speaker 2 (30:28):
Okay.
Speaker 6 (30:29):
What they said is that he was walking around the
community naked. Mister Hemmer denies this. He was just wearing
black underwear. Now there was a second allegation that he
peeded on the street, and now Hemmer and he.
Speaker 3 (30:42):
Actually didn't kissed while he was walking his dogs.
Speaker 6 (30:45):
Response to the query from The New York Times, mister
Hemmer said, the cameras got me.
Speaker 2 (30:49):
It's it's scary. They have guys sitting and watching me pee,
So he caught to that one.
Speaker 6 (30:55):
I don't know the disputing the charge of nakedness, but
but this is, of course comes you just gotta go.
Speaker 2 (31:02):
Yeah, I mean, like no one's on the street.
Speaker 6 (31:05):
I'm sort of somewhat sympathetic to Paul Hemmer's complaint.
Speaker 7 (31:08):
I'm not entirely sure it's better than Elon versus the
Tesla board, but it is. It is good, all right, Max,
do keep reporting this out.
Speaker 6 (31:17):
I guess it's just like a lesson to all of us,
Like before you complain about your neighbors, your billionaire neighbors gate,
you know, make sure your own house is in order.
Speaker 3 (31:26):
Max, Dana, thanks as always.
Speaker 4 (31:28):
Okay, guys, that was great.
Speaker 3 (31:31):
Bye.
Speaker 7 (31:40):
This episode was produced by Stacy Wong Lake, Maples Handles
engineering and daper self fact checks. Our editor is Anna
Massa Rakas, and our supervising producers Magnus Hendrickson. The Elon
In theme is written and performed by Taka Yasuzawa and
Alex sugi Era. Brendan Francis Newnham is our executive producer,
and Sage Bowman as the head of Bloomberg Podcast. A
(32:00):
big thanks as always to our supporters Joel Webber and Bradstone.
Speaker 3 (32:05):
I'm David Papadoppolos.
Speaker 7 (32:06):
If you have a minute, rate and review our show,
it'll help other listeners find us.
Speaker 3 (32:11):
See you next week.
Host
David Papadopoulos
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