Elon Musk Zeroes In on the I.R.S.

The fire hose of Elon Musk news continues: We’ve got more on the controversy over the access to sensitive I.R.S. data that Musk’s cost-cutting team is seeking and the resignation of a senior official at the Social Security Administration over a similar issue.

And in case you missed it, there were two revealing long reads about the Murdoch family’s internal battles: one in The Times Magazine based on more than 3,000 pages of secret court transcripts, and another in The Atlantic that included intimate details directly from James Murdoch. Finally, here’s a great watch from over the weekend: Adam Sandler’s tribute on “Saturday Night Live” to Lorne Michaels, whom we profiled last year, during the show’s 50th anniversary special.

Who gets access?

Elon Musk’s cost-cutting team is continuing to burrow deeper into the federal bureaucracy in search of what the tech mogul says are trillions in potential cost cuts.

But the organization’s latest accomplishments, including the potential gaining of access to sensitive I.R.S. and Social Security Administration data, have raised yet more concerns about how much power Musk is amassing — and what the consequences could be.

The latest: The I.R.S. is preparing to give Gavin Kliger, a young software engineer working with the so-called Department of Government Efficiency, access to sensitive taxpayer information as a senior adviser to the I.R.S.’s acting commissioner. The I.R.S. is still working out the terms of his assignment, but as of Sunday evening, he hadn’t yet gained access to the data.

Separately, the top official of the Social Security Administration, Michelle King, resigned after Musk’s team sought access to an internal database that contains personal information about Americans.

Critics worried such moves would give the Musk operation extraordinary oversight. Lily Batchelder, a Treasury Department official in the Biden administration, wrote on X that she couldn’t recall political appointees having access to the I.R.S. database.

A big concern is whether that might lead to the potential punishment of political opponents, as well as potential leaks of private citizens’ data. Batchelder wrote that such a move could violate federal law that prohibits the executive branch from interfering with taxpayer audits, while the Democratic senators Ron Wyden of Oregon and Elizabeth Warren of Massachusetts demanded more information about the access granted.

The issue of access to I.R.S. data has come up in recent years, with a Musk angle: The billionaire’s returns for 2014 to 2018 were leaked to ProPublica by an I.R.S. consultant.

The White House remains on Musk’s side. “Waste, fraud and abuse have been deeply entrenched in our broken system for far too long,” Harrison Fields, a White House spokesman, said in a statement. “It takes direct access to the system to identify and fix it.”

But it remains unclear why the cost-cutting initiative needs access to this information. (White House officials wouldn’t give The Wall Street Journal a reason.) Critics have worried that Musk’s team is operating off of faulty assumptions and online misinformation.

In related news: The White House hasn’t said who’s in charge of the cost-cutting team, other than that it isn’t technically Musk. And the advocacy group Common Cause said The Washington Post scrapped an ad it bought urging Trump to fire Musk.

HERE’S WHAT’S HAPPENING

New York’s governor casts doubts on Mayor Eric Adams’s future after another exodus. Gov. Kathy Hochul is expected to convene a meeting on Tuesday to discuss “the path forward,” after four top New York City officials said they would resign following the Justice Department’s move to drop a case into the mayor in apparent exchange for help with deportations. Hochul has the authority to remove Adams, though it’s unclear how the Trump administration would respond should she do so.

OpenAI is reportedly weighing measures to maintain control. The ChatGPT creator may adopt corporate governance measures including special voting rights for the board of its nonprofit arm, The Financial Times reports. Such provisions would most likely contain the say of powerful investors in OpenAI including Microsoft and SoftBank, and deter hostile bids such as the one made by Elon Musk, should OpenAI succeed in converting into a for-profit company.

Chip manufacturers are said to consider deals that could break up Intel. TSMC and Broadcom are deliberating bids for pieces of the embattled processor giant, according to The Wall Street Journal, though no proposal has been submitted to Intel yet. The idea is to remake Intel as a specialist in designing or manufacturing chips, but not both.

Tesla reportedly faces a major obstacle to its self-driving ambitions. Musk’s electric vehicle maker is bracing for a delay in getting a permit from China to run its “full self-driving” technology there, after promising investors it would get approval in the second quarter, The Financial Times reports. The potential delay comes as President Trump vows to increase his trade war against Beijing, aggravating already strained economic relations.

President Javier Milei of Argentina faces impeachment calls over his crypto ties. Opposition leaders and others cried foul over Milei’s endorsement on Friday of $LIBRA, a little-known cryptocurrency that quickly lost almost all of its value. Milei deleted his original post and called for an investigation, but opponents said the scandal had put his ability to lead into question.

Europe on the sidelines

Senior American and Russian officials have gathered in Riyadh, Saudi Arabia, on Tuesday for a high-stakes meeting. Atop the agenda: ending the fighting in Ukraine, Europe’s deadliest war in generations.

Not there are representatives from Europe or Ukraine, and that absence is raising questions about cracks in the Western alliance.

The latest: The State Department is playing down the talks as exploratory. But Russia has cast the meeting as an opportunity to break Moscow’s isolation and rebuild business ties with the West.

Kirill Dmitriev, the head of Russia’s sovereign wealth fund who is in Riyadh, invited American oil giants to return to the country. He dangled “access to Russian natural resources,” perhaps trying to appeal to President Trump’s fondness for “liquid gold.”

Investors are watching closely. European defense stocks soared on Monday, as Trump’s threats to reduce American military support to the continent and to NATO raised the prospect of increased military spending. That helped push the Pan-European Stoxx 600 to a record; the Stoxx Europe Total Market Aerospace & Defense index is up 19 percent this year.

More may be in store: “I think there’s a little bit more to go here,” Sharon Bell, an equity strategist at Goldman Sachs, told Bloomberg Television about the rally.

The surge belies a pervading sense of gloom in Europe. Even before being shut out of the Ukraine negotiations, Europe was feeling increasingly sidelined. Vice President JD Vance stunned attendees at the Munich Security Conference last week by taking aim at European allies. (He said little about Trump’s vision for the Ukraine talks.)

In WhatsApp message groups, in email chains and in opinion articles, experts and commentators have raised questions about the future of U.S.-European relations. Their big fear is President Vladimir Putin of Russia gaining the upper hand in Ukraine talks — especially if Trump looks to secure a windfall of mineral resources — putting Europe at risk.

Europe was already bracing for a bruising Trump trade war. Tariffs are seen as keeping the region in a low-growth rut. They could also drive a wedge between E.U. members, including if America plays favorites with ideological allies, Alessandro Penati, an economist and the president and founder of Quaestio Capital Management, told DealBook.

“I think the strategy of Trump is just to break up Europe,” Penati said, adding, “he has already been very successful in doing that.”

Delaware lawmakers take on the courts

Delaware has long been corporate America’s capital. But growing frustration among companies over recent judicial decisions has led to threats to leave, endangering crucial business incorporation revenue for the First State.

Now Delaware lawmakers have delivered their response to that threat — and it has drawn a range of responses from the business world and observers, DealBook’s Lauren Hirsch reports.

What’s happening: A group of Delaware state senators proposed a bill that would reshape how much leeway managers of companies with controlling shareholders have to run their businesses. It would effectively override years of case law by the Delaware Court of Chancery, including divisive ones like last year’s decision rejecting a big compensation package for Elon Musk at Tesla.

Normally, select members of the Delaware bar draft changes to the corporate code that lawmakers approve. But legislators — who didn’t appear to consult with those practitioners, at least publicly — said on Monday that they had moved quickly to address “specific concerns that lawmakers have received since late January’s flurry of reincorporation.”

They added that the legislation would be open to review, comment and recommendation.

The bill would relax the standards for scrutinizing deals with controlling shareholders. It proposes narrowly defining who is a controlling shareholder and loosening requirements for deals involving such an investor. (If the measure is retroactive, it could help Musk in his compensation fight, according to Jonathan Macey, a professor at Yale Law School.)

The legislation would also limit the kinds of internal communications that shareholders could request in a lawsuit. Formal documents including board meeting minutes would be allowed; emails and other internal communications most likely wouldn’t be.

It could put a damper on shareholder litigation. While that may stem companies’ rush to reincorporate elsewhere, it would probably limit the number of lawsuits brought in Delaware courts.

“While shareholder litigation has its excesses, it’s not great for normal shareholders when controlled boards are required to do less and get more protection from scrutiny,” Brian Quinn, a professor at Boston College Law School, told DealBook. “It’s a step backwards for public shareholders and a major concession in favor of controlling shareholders”

It raises questions about corporate America’s power. Did Delaware lawmakers override case law in favor of business interests? Or did they try to correct for overactive courts?

In one camp: “This is corporate managers just straight up saying: ‘I don’t need your law and I won’t be bound by it,’” Ann Lipton of Tulane University Law School, who blogged about the move, told DealBook.
In the other: “I think this is going back to traditional respect in Delaware for shareholder primacy,” Macey said.