This week, the New York Times criticized Elon Musk, head of the Department of Government Efficiency (DOGE), for making strong claims about fraud in federal spending without presenting immediate proof. During a press conference with President Donald Trump in the Oval Office, Musk stated that the government was losing massive amounts of money to fraud. However, the Times argued that he didn’t provide direct evidence at the event, despite the availability of public records supporting his claims.
Musk’s Allegations and the Media Response
Musk claimed that many government employees had become wealthy beyond their official salaries, particularly those working at the U.S. Agency for International Development (USAID). He also accused them of receiving kickbacks. However, he didn’t present tax returns or financial statements as evidence during the press conference. Instead, he directed reporters to DOGE’s official social media accounts and website, which promised to release supporting documents by Valentine’s Day.
The BBC attempted to fact-check Musk’s statements by examining the financial records of former USAID Director Samantha Power. They found reports suggesting her net worth ranged between $9 million and $30 million. However, Musk never specifically mentioned her during his speech.
Reports Confirm Government Overspending
Musk’s concerns about fraud align with findings from the Government Accountability Office (GAO) and various Inspectors General. According to a GAO report from September 2024, the federal government may lose between $233 billion and $521 billion annually due to fraud. In 2023 alone, improper payments across 71 government programs totaled $236 billion, with Medicare, Medicaid, Unemployment Insurance, and other major programs accounting for most of the losses.
At USAID, a report from the Office of Inspector General found that an employee in North Carolina was mistakenly paid at Washington, D.C. salary rates, receiving nearly $10,000 more than they should have.
Major Issues in Treasury Payments
Musk also pointed out major flaws in the Treasury Department’s payment system. He explained that payments often lacked categorization codes, making tracking and auditing nearly impossible. He also criticized delays in adding known fraudsters and even terrorist organizations to the government’s “Do Not Pay” list, which sometimes takes up to a year. Even when added, he claimed the list is often ignored.
Potential Savings from Reducing Fraud and Waste
GAO estimates only account for fraud and improper payments, not additional wasteful spending like Diversity, Equity, and Inclusion (DEI) programs or excessive foreign aid. Musk has suggested that eliminating fraud and waste could help balance the federal budget.
Some analysts believe the real fraud figures could be much higher. At a recent oversight hearing, LexisNexis Risk Solutions CEO Haywood Talcove stated that better identity verification, eliminating self-certification, and monitoring benefit programs could save the government up to $1 trillion annually.
While Musk’s press conference lacked immediate receipts, multiple government reports support his claims of widespread fraud. Whether the DOGE department will provide concrete evidence in the coming weeks remains to be seen.
