SpaceX Is Corrupt

And it has been for a long time.

Photo by SpaceX on Unsplash

Recently, DOGE claimed to have cut $115 billion in waste, corruption, and fraud from the US government. For now, let’s ignore the fact that experts have found this figure to be wildly inflated — using an assortment of manipulative tools like double counting, misrepresentation, and making blatantly false claims — and the fact that these cuts will cost the government more than $115 billion, ultimately raising the deficit. Even if these factors weren’t the case, we would still be obliged to ask why DOGE hasn’t investigated one of the US government’s biggest contractors, SpaceX? Because if you look into the company’s history, it sure seems SpaceX has engaged in billions of dollars worth of fraud and corruption. And what better way to prove the “conflict of interest” naysayers wrong and deliver significant tangible results than holding your own company to account? After all, SpaceX is big enough to take the hit. Right?

Well, let’s have a look.

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FAA

Firstly, DOGE is actively conducting what several lawmakers and lawyers have described as “corruption” right now in the FAA. You see, DOGE has installed SpaceX engineers at the FAA to oversee system and personnel changes in line with DOGE’s cost-cutting agenda. But these guys don’t seem to be doing any real cost-cutting. So, what are they doing?

Before Musk founded DOGE, the FAA had been actively investigating SpaceX for its repeated Starship explosions and launch licence violations. These explosions posed a major environmental and aerospace risk due to red-hot debris falling into sensitive airspace and protected environments. Furthermore, Starship’s launch licence is only valid if SpaceX takes precautionary measures to ensure such incidents don’t happen, which the FAA suspects they didn’t do. In fact, the head of the FAA, Michael Whitaker, fined SpaceX $600,000 in 2024 for such violations and was poised to levy more against SpaceX and conduct further investigations into Starship mishaps. However, he resigned soon after Musk took his DOGE position and installed SpaceX engineers at the FAA, despite his position being secure until 2028. Since his resignation, these investigations appear to have stopped.

The presence of engineers’ at a governmental body that was actively investigating their employer is an open-and-shut case of conflict of interest. However, the fact that these investigations appear to have stopped is a giant red flag of corruption.

And their meddling at the FAA doesn’t stop there.

As I mentioned in a previous article (read more here), Musk and these engineers are pressuring the FAA to drop a $2.4 billion contract already given to Verizon to supply internet to remote locations to SpaceX’s Starlink. Because Starlink has unreliable connection speeds and can be rendered totally useless by snow, it is not a better solution than the one Verizon is already supplying. Yet the FAA is still moving to give Musk and Starlink this contract, as Musk and these engineers can effectively fire any FAA employee who tries to stop them. Again, this appears to be a textbook example of corruption, and several lawmakers and lawyers want to investigate this.

HLS

Unfortunately, evidence of SpaceX’s corruption goes back much further. Take the Human Landing System, or HLS.

In 2021, NASA’s Artemis programme sought a private contractor to land astronauts on the Moon. They had several pitches from the likes of Blue Origin and SpaceX but ultimately chose to go with SpaceX, giving them a $2.89 billion contract.

There are several things suspicious about this.

Kathy Leuders, who effectively had the final say on who got the contract, said she decided to make SpaceX the only HLS contract for “budget reasons.” NASA didn’t have enough to pay for multiple options, and SpaceX’s solution was by far the cheapest option “by a wide margin” — which is half true.

SpaceX’s Starship-based HLS system is hypothetically cheaper but relies on ridiculous speculative leaps in technology, such as landing such a huge upper stage with retro-rockets, rapid reuse, a 100-tonne LEO payload, and cryogenic in-orbit refuelling — all things that have never been done before, and to this day, we still have zero engineering evidence that these are even physically possible. The HLS system is also fundamentally flawed, as it has to land astronauts back to Earth not via a safe landing capsule but onboard a Starship, which can never reach the reliability needed for human space flight. (To find out more, read my article here).

Meanwhile, the pitches by the likes of Blue Origin were based on proven technology and processes, as their models more closely resembled the landers from the Apollo missions. Sure, their pitch was more expensive than SpaceX’s, but their figures were actually based on reality, not SpaceX’s speculative unreal option.

Since then, SpaceX’s repeated Starship failures have shown that they can’t deliver the HLS on time and that Starship will be wildly too expensive and incapable for any kind of practical use (again, read more here). This shows the blatant failure of Kathy Leuders. If budget constraints are tight, don’t go for the “cheap” speculative option, as it is highly risky. You can only accept these kinds of risks if there is ample budget to be lost. This is a fundamental notion of procurement. So, why did Leuders make such an obviously bad decision?

Well, in 2023, Leuders quit NASA and took a cosy job managing Starship development for SpaceX. Not only that, but as SpaceX gives equity to its higher employees, this likely means Leuders gained a serious stake in SpaceX.

So, Leuders gave SpaceX a giant $2.89 billion government contract, and then after just enough time to not be totally suspicious, quit, joined SpaceX, and gained equity in the company. Boy, that sure looks like corruption, especially considering Leuders has been close to Elon for years. Who’s to say Musk didn’t offer her a job and equity in SpaceX if she gave them the contract in private? We sure don’t, as this jumping ship has never been investigated.

Yet, somehow, it gets worse! Leuders’ position at NASA was replaced by Ken Bowersox in 2023. He worked for SpaceX from 2006 to 2011 and, again, likely has serious equity in SpaceX, as that is how SpaceX paid most of its higher employees back then.

This means the person currently deciding how many funds NASA should give to SpaceX, or if NASA should audit or investigate SpaceX’s use of those funds, likely has a massive vested interest in SpaceX. This is optimistically a conflict of interest and potentially corruption.

COTS / CRS

And these shady inside funding practices go way back.