Texas’ Next AG Vows ‘Tremendous Scrutiny’ of Tesla-SpaceX Deal

Texas Attorney General-elect Nathan Johnson vowed to take a close look at any potential merger between Elon Musk’s Space Exploration Technologies Corp. and Tesla Inc., warning of the perils of corporate concentration as the state’s two most valuable companies weigh a tie-up.

“Any merger of companies of that consequence warrants tremendous scrutiny,” Johnson said in an interview at Bloomberg’s Dallas office on Thursday, nine days after he and his fellow Democrats swept to power in a state Republicans have controlled since the 1990s.

Musk, the world’s richest person, has concentrated much of his empire in Texas, where he sought a more business-friendly regulatory environment under the state’s Republican leadership. He also spent hundreds of millions of dollars to support the GOP in Texas and across the US in the midterm elections. Texas Democrats including Johnson, Governor-elect Gina Hinojosa and US Senator-elect James Talarico have vowed to put a check on his power.

“I think he’s received a great deal of deference due to his alignment with the Republican Party and the tons of money he spent for the Republican Party,” Johnson said. “I have no qualms about examining his relationships to the state.”

Johnson declined to discuss the specifics of any SpaceX-Tesla combination, which would be the biggest-ever deal. Merger talks are progressing, Bloomberg reported this week, and the resulting entity would house electric vehicles, energy storage batteries, rockets and satellites.

“I don’t want anybody to have such control of the public sector that they can bend public power to their private gain,” Johnson said of Musk. “I think his empire is at great risk of crossing that line.”

SpaceX and Tesla didn’t immediately respond to requests for comment.

Johnson said he and his transition team haven’t been in touch with Musk, adding that “if Elon wants to talk, we can talk.”

The next Texas attorney general will take office in January, and he has promised a return to a focus on the “nuts and bolts” in areas such as consumer protection and antitrust litigation. Most importantly, Johnson said, he plans to move the office away from the culture-war issues championed by Ken Paxton, the outgoing attorney general.

Paxton, who was trounced by Talarico in the state’s US Senate race, became a GOP hero by pursuing a conservative agenda as attorney general, filing more than a hundred lawsuits against the federal government during the Biden administration.

Johnson said he would rather devote his office’s resources to other pursuits besides suing the Trump administration. But he added that he won’t shrink from a fight if he thinks it’s necessary.

“My goal is not to sue them all the time,” Johnson said. “I don’t really think anybody should be bragging about how many times they sue the president. But I do have a job to do, and if the president is causing us harm, I’m going to sue him.”

While he’s planning a shift from Paxton’s priorities, Johnson praised the current attorney general as a “national leader” in antitrust and consumer protection cases. He said he plans to retain several lawyers who specialized in those areas under Paxton.

One antitrust case that Paxton has prioritized is a legal challenge accusing BlackRock Inc. and State Street Corp. of colluding to reduce coal output. Johnson said he has yet to make any determinations about whether to continue pursuing the case.

“I’m in a position now of not just shooting my mouth off — I’m in a position of power,” he said. “I intend to be very disciplined in examining that case.”