In the lead up to the April 1 election for the Wisconsin state Supreme Court, a little-known private equity executive by the name of Antonio Gracias joined Tesla billionaire Elon Musk on stage as the latter launched into a tirade clearly inspired by the white supremacist Great Replacement Theory — the discredited canard that the Biden administration was letting in millions of “illegals” to engage in mass voter fraud.
On the dais, Gracias described how his foray into Social Security had revealed something already widely known to immigration policymakers: that the Biden administration had substantially expanded the Temporary Protected Status program, allowing millions of immigrants to enter and work in the country legally. These noncitizens were given Social Security numbers, as is completely standard — in fact, the process was automated during Trump’s first term — but Gracias and Musk, the world’s richest man, treated it like a scandal.
“We started at the top of the system mapping the whole system of Social Security to understand where the fraud was — this is what jumped out at us,” Gracias said. “When we saw these numbers, we asked ‘What is this?’ In ‘21, you see 270,000 people, it goes all the way to 2.1 million in ‘24. These are noncitizens that are getting Social Security numbers. … This literally blew us away. We went there to find fraud, and we found this by accident.” Noting that his parents and siblings, like Musk, are immigrants, Gracias added, “I’m pro-legal immigration — this is about America and the future of America.”
The crowd of conservatives gasped as the billionaires made it sound as if they and their team at Trump’s so-called Department of Government Efficiency had finally found proof of the waste, fraud, and abuse in the Social Security Administration that Musk has repeatedly talked about — examples that might help justify the massive upheaval that DOGE has created within the agency that manages America’s core retirement program.
Under their watch, DOGE has moved to fire thousands of SSA workers, shutter dozens of field offices, and implement sweeping changes that are expected to make it more difficult for Social Security recipients to get their payments on time, if at all. The administration has reportedly declared millions of people dead within the Social Security program, making live people fight for their payments, and has started deliberately marking some immigrants as deceased. (A White House spokesperson says SSA’s “death data” is “being reviewed by three separate teams,” and that the immigrants targeted were either “on the terrorist watch list” or have “FBI criminal records.”) Meanwhile, Social Security beneficiaries may have to wait until November to receive the higher payments they were promised in a law passed last year.
Despite all of Musk and Gracias’ rhetoric about rooting out waste, fraud, and abuse in Social Security, scant attention has been paid to how the pair has become phenomenally wealthy with support from Americans’ retirement funds.
It’s well-known that Musk’s space company, SpaceX, has long cashed in on federal contracts — a trend turbocharged by Trump’s administration. Gracias, for his part, has relied on significant investments from public retirement systems to fund his firm’s deals. In the past decade, Gracias’ private equity firm, Valor Equity Partners, has received at least $1.7 billion in investment commitments from state and local pension funds — which manage the retirement savings of unionized teachers, firefighters, social workers, bus drivers, and cops — according to a Rolling Stone review of public documents.
Much of this money has come from Democratic states and locales. For its most recent fund, Valor received $800 million in investment commitments from a range of state and local pension funds. Investors include the California Public Employees’ Retirement System; the California State Teachers’ Retirement System; the Illinois Municipal Retirement Fund; the New York State Teachers’ Retirement System; a range of New York City pension funds; the Philadelphia Board of Pensions and Retirement; and the Hartford Municipal Employees Retirement Fund in Connecticut.
Valor disclosed in a press release last August that this same fund has invested in Musk’s SpaceX and his artificial intelligence company xAI. Musk recently used xAI to purchase his social media platform X (formerly Twitter) at a valuation of $33 billion, a 25-percent haircut from the $44 billion he spent to buy Twitter. (The platform’s ad revenues have cratered under Musk’s stewardship.)
With a typical management fee of two percent, Gracias’ firm stands to accumulate tens of millions of dollars annually from the public funds no matter how its investments perform. While Gracias complains about 1.3 million immigrants being on Medicaid — numbers that have not been independently verified by Rolling Stone, but would mean these immigrants are getting access to preventive care and saving hospitals money on emergency room expenses — Gracias himself is accruing large profits from the management fees that his firm charges government retirement systems.
Valor and DOGE did not respond to Rolling Stone’s requests for comment.
A 54-year-old University of Chicago Law School alum who has been associated with Musk since the PayPal days, Gracias has played a key role in helping prop up Musk’s embattled yet sprawling business empire. He’s a longtime investor in Musk’s companies, a significant Tesla shareholder, and former Tesla board member.
Gracias’ longstanding friendship and business dealings with Musk have been lucrative for both men. Musk is worth an estimated $386 billion, in large part due to his Tesla holdings. Gracias has a net worth of $2.2 billion, much of it tied to his holdings of Tesla stock. Gracias lent Musk $1 million early in Musk’s ownership of Tesla, and his firm has invested in nearly every Musk company, including SpaceX.
The Trump administration has been good to them. SpaceX, which has received billions of dollars from government contracts, has raked in billions more under the Trump administration. Agencies across the federal government are increasingly using Starlink, SpaceX’s satellite internet business.
SpaceX and defense contractor Anduril, another company that Gracias’ firm has invested in, are the frontrunners to build Trump’s proposed “Golden Dome” missile shield, a proposal that experts estimate will cost hundreds of billions of dollars. In late April, the Wall Street Journal reported on Gracias’ lucrative side hustle — selling stakes in Musk’s private companies like SpaceX.
A White House spokesperson says, “As for concerns regarding conflicts of interest between Elon Musk and DOGE, President Trump has stated he will not allow conflicts, and Elon himself has committed to recusing himself from potential conflicts.”
As Trump and Musk have run roughshod over the law to pursue drastic cuts of the federal government through DOGE, they have been supported by an eclectic cast of characters. While 19-year olds or those with openly racist proclivities or nicknames like “Big Balls” get the bulk of media attention, arguably nobody has been more important to implementing DOGE’s slash-and-burn agenda than Gracias.
With his entry into the heights of Washington policymaking, Gracias, like Musk, has brought an overall mentality to the Trump administration with well-defined origins in private equity.
Core to the history of private equity is a conception that government is a vehicle for private profit, and that the point of business is to extract as much cash as possible from targets, no matter the impact. Private equity started in earnest thanks to a rule change by Jimmy Carter in 1979 that allowed private equity to fundraise from private sector pension funds. (Public pension cash began to flow shortly thereafter.) But with the critical benefits of millions of Americans at issue, along with basic principles like the rule of law and a government that functions, the stakes couldn’t be higher.
“It does seem like Musk and DOGE are applying private equity tactics to the government,” says Brendan Ballou, a former attorney at the Department of Justice who wrote the 2023 book Plunder: Private Equity’s Plan to Pillage America. As an example, Ballou notes, “They’re exploring sale leasebacks to sell underlying government property and lease it back to itself,” a hallmark of the private equity model. “They’re pursuing the same type of cost-cutting techniques that private equity firms pursue when they take over a company, which end up costing you vastly more money in the long run. Slashing the IRS might save you money for one year, but it’s devastating in the future. It’s almost comical how similar it is to the takeover of a company by a private equity firm, what they are doing to the government.”
As Gracias is primed to reap a windfall from the Golden (no, not Teapot) Dome, the DOGE-led Social Security cuts he has helped to oversee could send the program cratering down the road to privatization — another classic hobbyhorse of a Wall Street eager to profit from the nearly $3 trillion in the Social Security Trust Fund that is currently invested in U.S. Treasuries. (BlackRock, whose CEO Larry Fink recently resuscitated the long-discredited idea of investing part of Social Security in Wall Street-controlled private accounts, did Musk a massive favor last year when the financial firm voted its investors’ proxies in favor of Musk’s record-setting $46 billion Tesla pay package.)
Gracias began working with the Social Security Administration in early February. By the end of the month, the SSA had announced its intentions to cut 7,000 positions out of the agency’s 57,000-person workforce. Dozens of Social Security offices are expected to close, while DOGE pushes major technological changes that could make more people need to visit those offices.
A White House spokesperson says SSA has only lost 2,000 workers so far, with most departing voluntarily, and adds that “the agency has not permanently closed or announced the permanent closure of any local field office.”
“President Trump established the Department of Government Efficiency to modernize government operations and eliminate waste, fraud and abuse,” the spokesperson continues. “At the Social Security Administration, the DOGE team has delivered — upgrading technology systems, implementing anti-fraud tools, improving the accuracy of death records, and stopping illegal aliens from collecting benefits. President Trump remains committed to always protecting Social Security.”
Additionally, Gracias has reportedly led a DOGE task force working with the Department of Homeland Security and the Department of Health and Human Services to integrate sensitive personal data from Social Security, with the apparent goal of aiding Trump’s deportation dragnet.
Speaking about DOGE’s efforts in the Social Security Administration, former SSA Commissioner Martin O’Malley said in March, “Most of the actions necessary to create a total system collapse of the Social Security Administration have been taken.” In late April, the Trump SSA pledged that they would seek to convert large swaths of SSA employees to “Schedule F,” which would effectively eliminate longstanding civil service protections and serve to speed up firings at the agency.
DOGE appears to have been able to circumvent a federal judge’s March ruling barring its access to SSA data with Trump appointing one of DOGE’s own as chief information officer of the Social Security Administration. That role is currently being held by Scott Coulter, who used to work for private equity giant Blackstone and Lone Pine Capital, a hedge fund, and has worked as a DOGE apparatchik.
All of this is out of the private equity playbook, says Samir Sonti, a professor at the Murphy Institute at the City University of New York.
“Private equity has profited immensely in recent decades off of asset stripping — using public resources to plunder businesses and communities, leaving behind carcasses of enterprises in many cases,” he says. “Fundamentally, private equity is really about devastating the public good for private gain. DOGE is executing something very similar at the federal level. But they’re gutting not just a specific enterprise or community but the entire federal government, to advance a longer-term desire among corporate interests in this country to free themselves from any public or social oversight. In many ways, what we’re seeing with DOGE is the private equity asset stripping model [taken] to its logical conclusion.”
Private equity firms in the U.S. — anchored by big names Blackstone, Apollo, Carlyle, and KKR — manage over $3.1 trillion in assets, and control outright major firms like Medline, the largest medical supply firm in the U.S., and Allied Universal, the world’s largest private security firm. Companies owned outright by private equity firms employ over 12 million people in the U.S., according to research by the Private Equity Stakeholder Project.
Employees of private equity firms spent $236 million on campaign contributions in the 2024 election.
The American Investment Council, a lobbying group for private equity, has estimated that about half of private equity’s capital that is invested in America comes from U.S. public pension funds.
Private equity is distinguished by its lack of regulation, limited transparency, high fees, and vulnerability to misconduct. A leaked 2020 report from the FBI found that private equity firms, along with their closely related siblings in asset management, hedge funds, are widely used to conduct illicit money laundering operations.
“Public pension funds are one of the biggest sources of capital for private equity firms,” says Oscar Valdés Viera, who analyzes private equity at Americans for Financial Reform. “Workers indirectly fund private equity’s predatory practices through their pension funds. The private equity billionaires benefit from tax loopholes and giveaways that the rest of us do not get,” he says, pointing out the carried interest tax deduction, which allows private equity managers to get much of their income taxed at the lower long-term capital gains tax rate than the ordinary income tax rate. “They charge a lot of fees, like management fees, professional fees, director and officer fees, accounting fees, transfer agent fees, and most of these fees are coming directly from pension funds and similar investors,” he says. “It’s just insane the amount of fees that they charge from these pension funds.”
Reflecting the broad secrecy of his industry, much of what Gracias is doing at DOGE remains closed off to the public eye. On April 21, the American Civil Liberties Union sued the Social Security Administration for failing to respond to Freedom of Information Act requests related to its handling of the personal data of millions of Americans, stating: “The American people have an urgent need to know if their private financial, medical, and personal records are being illegally accessed, analyzed, or weaponized by Trump’s unaccountable team of unvetted outsiders.”
Brett Christophers, a professor at Sweden’s Uppsala University who has studied asset management, tells Rolling Stone that the actions of DOGE clearly resemble foundational principles of the private equity industry.
“When private equity investors go into operating companies, the most consistent theme across all their investments is cost cutting as a way in theory to maximize their investment and make companies lean and more valuable to other potential investors,” he says. “It sounds like what’s going on with DOGE is that Musk and the people working with him are trying to treat the government in the same way.”
