Republicans lose US midterms; Musk's firms and DOGE role face congressional scrutiny

Donald Trump's Republican Party has suffered a heavy defeat in the US midterm elections. The Democrats have established their dominance over both houses of Congress. The biggest blow has fallen on Elon Musk, the world's richest person and an industrialist. He had poured heavily into the elections for Republican candidates, but his difficulties have now multiplied manifold. His companies, government contracts and administrative role will be examined by Congress.

According to figures filed with the Federal Election Commission (FEC), Musk spent a record amount on the 2026 midterms. He gave more than $445 million, or over Rs 4,000 crore, to Republican candidates, political organisations and Super PACs. He was the largest individual donor in this election. He campaigned strongly for Republican candidates on X, the social media platform he owns, and made an open appeal to more than 240 million followers to vote for the Republican Party. Musk had spent more than $200 million in Texas, but his preferred candidate was defeated there too.

In Trump's second administration, Musk was given charge of DOGE (Department of Government Efficiency). The department's main aims were to cut government spending and reduce unnecessary staff. Musk led the department for four months, and many major and controversial decisions were taken during that time. With the Democratic Party now in control of Congress, there will be a thorough inquiry into whether Musk used this government position for the benefit of his own companies. He is viewed with suspicion because, during his time leading DOGE, his companies received government contracts worth at least $6.3 billion and later a further $10 billion.

Richard Painter, a former White House ethics lawyer in the George W. Bush administration, said Musk was a part-time special government employee while working at DOGE. Under federal law, such employees are barred from interfering in government decisions linked to their own personal financial interests. Companies such as SpaceX and Tesla receive major contracts from NASA and the Department of Defense. If Musk misused administrative powers to win contracts for his companies, it could amount to a serious breach of law. Questions are also being raised in Congress about the use of Starlink in Ukraine and Musk's alleged contact with Russian President Vladimir Putin.

The developments had a direct effect on the stock market. As soon as the results were announced, Tesla shares fell about 3 per cent and SpaceX shares about 4 per cent. Concern has spread among investors. The Democratic Party is expected to keep a close watch on government contracts, subsidies and legal approvals. This could deal a heavy blow to Musk's global business empire.