Texas AG-elect Nathan Johnson puts potential SpaceX - Tesla tie-up on notice

Johnson's take on a SpaceX - Tesla deal

Nathan Johnson said a merger of this size would demand a hard look, calling it an event that "warrants tremendous scrutiny." He made the comments in a Bloomberg interview in Dallas, less than two weeks after Democrats won control in a state long run by Republicans. He would not discuss specifics of any potential deal, which Bloomberg reported would be the largest on record if it happens and would bundle Tesla's cars and batteries with SpaceX's rockets and satellites.

At press time, SpaceX and Tesla had not provided comments in response to inquiries. Johnson added that neither he nor his transition team has spoken to Elon Musk, and said, "if Elon wants to talk, we can talk."

Musk's clout in Texas politics

Musk - often labeled the world's richest person - has placed a large share of his operations in Texas. The article notes he sought a friendlier regulatory climate under Republican leadership and poured hundreds of millions of dollars into backing the GOP in Texas and nationwide during the midterms. Johnson said, "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," and added, "I have no qualms about examining his relationships to the state." He also warned, "I don't want anybody to have such control of the public sector that they can bend public power to their private gain." Texas Democrats, including Johnson, Governor-elect Gina Hinojosa and US Senator-elect James Talarico, have pledged to counterbalance his influence.

Shifting the AG office's focus

Johnson will be sworn in come January and says he will return the office to "nuts and bolts" work such as consumer protection and antitrust. He wants to steer clear of the culture-war priorities associated with outgoing Attorney General Ken Paxton, who lost to Talarico in the state's US Senate race. Paxton became a GOP favorite by pushing a conservative agenda as attorney general and, over the Biden administration, filing more than one hundred cases targeting the federal government.

Johnson stated he would prefer not to allocate office resources toward suing the Trump administration, though he acknowledged he might do so if circumstances warrant. "My goal is not to sue them all the time," he said.

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Cases to watch and why investors care

While planning a break with Paxton's priorities, Johnson called the current attorney general a "national leader" in antitrust and consumer protection, and said he plans to retain several attorneys in those specialties. One live case is the antitrust challenge alleging BlackRock Inc. and State Street Corp. coordinated to cut coal output. Johnson said he has not decided whether to press forward, noting, "I intend to be very disciplined in examining that case."

The bottom line: if SpaceX and Tesla move toward a record merger, expect Texas to be an active referee.

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