The White House's promotion of Tesla's stock is an ethics nightmare — and it's not even working
March 21, 2025
Since the beginning of the year, Tesla's stock has dropped almost 42%, shedding some $500 billion in market value. As Commerce Secretary Howard Lutnick told Fox News viewers, it's the perfect time to buy.
"If you want to learn something on this show tonight, buy Tesla," Lutnick
said on Jesse Watters' show Wednesday
. "It's unbelievable that this guy's stock is this cheap," he added, referring to CEO Elon Musk. "It'll never be this cheap again."
Lutnick's comments were the latest example of members of the Trump administration, including the president himself, using their political standing to promote a specific company — a concerning break with long-standing tradition, ethics experts say.
"It's an ethics issue, and it's an optics issue," said Jordan Libowitz, head of communications for the Citizens for Responsibility and Ethics in Washington. "Whether or not there is some kind of quid quo pro here, people will question it. It will at least raise eyebrows when someone spends hundreds of millions of dollars to elect a president and then that president's administration takes action that appears to be an attempt to boost that person's net worth."
Richard Painter, the former chief ethics lawyer under President George Bush, said government officials have historically steered clear of picking favorites. "The idea of promoting a company, the White House doesn't do that," he said. "The Commerce Secretary is not Jim Cramer."
Spokespeople for the Department of Commerce, the White House, and Tesla didn't immediately respond to requests for comment.
Musk's firing of thousands of government employees in his role as de facto head of the Department of Government Efficiency sparked a protest movement called #TeslaTakedown. Over the last two months, protesters have set fire to Tesla cars and charging stations. Sales have also dropped as buyers boycott the brand.
The administration has rushed to support Musk's company. Last week, President Trump held what was effectively a promotional event on the grounds of the White House,
posing for photographs
in front of Teslas lined up along the South Lawn. Trump agreed to buy a Model S,
writing
in a Truth Social post ahead of the event that his purchase was a "show of confidence and support for Elon Musk, a truly great American." Trump said he would write a check for $80,000, though it's unclear if he ever did.
Ethics experts say it's virtually unprecedented for members of an administration to throw their weight behind a single company. While the government has supported specific industries or bailed out companies in the past, its actions have been couched in the context of protecting American jobs, Libowitz said.
Painter and Kathleen Clark, a professor of law at Washington University, said Lutnick's comments violate a section of the federal code that says government employees may not use their office for their own private gain; that of their friends, relatives, or other affiliates; or to endorse "any product, service, or enterprise."
Lutnick said he would divest his financial holdings within 90 days of joining the government, as is standard practice. It's unclear whether he has done so. According to the most recent security filings, one of Lutnick's holdings, the brokerage firm Cantor Fitzgerald, owns Tesla stock. Also on Wednesday, Cantor Fitzgerald analyst Andres Sheppard
upgraded Tesla
to the equivalent of a "buy" rating after visiting one of its factories.
"When people understand the things he's building, the robots he's building, the technology he's building," Lutnick said on Fox, "people are going to be dreaming of today."
This isn't the first time an administration has touted a specific business. Less than a month into the first Trump administration, the president's close advisor, Kellyanne Conway,
told Fox viewers to support Ivanka Trump's fashion line
. "Go buy Ivanka's stuff, is what I would say," Conway said. At the time, Jason Chaffetz, the Republican chairman of the House Oversight Committee, said the comments were "wrong, wrong, wrong, and there's no excuse for it,"
The New York Times
reported. Chaffetz and the then-top Democratic lawmaker on the committee, Elijah Cummings, wrote a letter to the US Office of Government Ethics, and then-press secretary Sean Spicer said Conway had been "counseled" on the matter.
Others who wanted to curry favor with Trump during his first administration chose to stay at his hotel in Washington DC or play golf at Trump courses. When Joe Biden became president in 2021, he kept his name on the Penn Biden Center at the University of Pennsylvania, which Painter said the university used to raise funds — an arrangement that rankled the ethics lawyer. "The use of the president's name to sell cars, to raise money for a private university, is unacceptable. It never happened before 2016," Painter said. "This Tesla thing is not good."
Nor is it very helpful for the company, at least in the short run. Despite the administration's efforts, Tesla's downward momentum hasn't reversed. Its shares rose 1.3% on Thursday, closing at $236, down from a peak closing price of $479 in mid-December. Its stock price is on pace for its ninth straight weekly decline.
