Democracy, not Lotology; Elon Musk’s Election Giveaway is a Gamble the Law Can’t Afford

Written by Arshiya Pant, Edited by Shrey Raju

The American legal system has long attempted to navigate the contentious issues of campaign finance. From the first-ever federal limitations on campaign finance set forth by the 1907 Tillman Act to the creation of the Federal Election Commission to oversee individual, corporate, and political groups’ contributions, the flow of money in an electoral democracy has always been a precarious issue demanding legal attention. [1] Despite guardrails, many individuals, organizations, and corporations in American history have challenged campaign finance and corruption laws written to preserve electoral and political integrity. Cases involving potential violations typically see similar issues: enormous donations, lack of transparency, non-compliance with reporting regulations, and more. However, this election cycle, tech billionaire Elon Musk has challenged election and campaign finance laws in a truly unprecedented way. By instituting a $1 million prize giveaway for registered voters who sign the entrepreneur’s America Political Action Committee (PAC) petition, Musk has jolted several private and public parties into legal action against him. 

Musk’s holistic involvement in campaign financing is worth noting before dissecting the lottery-styled giveaway that found him in this latest legal controversy. Since his endorsement of President-elect Donald Trump, Musk has donated more than $118 million to his own America PAC according to findings by the FEC. [2] PACs function privately to raise money for election-related influence and historically have been criticized for exerting unfair influence. The PAC took a special interest in battleground swing states, operating on funds to canvas and digitally market Trump’s campaign to voters. America PAC collected data from registered voters, which merited legal scrutiny according to Philadelphia District Attorney Larry Krasner, who filed the first suit against Musk [3]. The organization began circulating a petition that asked signatories to affirm their support for the First and Second Amendments, promising $47 to those who successfully recruit a registered swing-state voter to sign. Eventually, Musk pledged $1 million in giveaways to one “random” signatory each day through November 5. [4]

Paying people to vote or register to vote is federally prohibited. [5] Technically, Musk and America PAC’s $47 prize is not in violation of this law because the payment is not for signatories who vote or register, but rather is reserved for referrers. Additionally, Musk emphasized the monetary prize rewards of signing a petition, not the act of voting or registering itself. [6] Nonetheless, it is important to note that being a registered voter is a requirement to sign the petition. One could argue that referrers themselves would likely have signed the petition—the Venn diagram between referrers and signatories would essentially become a circle of the same names. Combined with the fact that some may register to vote to earn qualification for Musk’s financial incentive, some legal experts believe the $47 prize could violate the same underlying principles of political and electoral integrity that federal voter laws aim to protect. [7]

Even if one were to hold no qualms with the $47 reward, an immensely grayer area emerged upon Musk’s announcement of America PAC’s $1 million giveaway to a signatory. The Department of Justice (DOJ) Criminal Division’s Public Integrity Section warned Musk about the legal precariousness of the giveaway. [8] Although the DOJ has remained largely private about specific details of the warning, the Public Integrity Section states that its primary concerns are “federal crimes affecting government integrity, including bribery of public officials, election crimes, and other related offenses,” suggesting that the giveaway could be tried for violating federal election laws banning voter inducement. [9]

Although the $1 million giveaway has posed questions about potential election law violations, other kinds of legal scrutiny have also been raised. Philadelphia District Attorney Larry Krasner was the first to take legal action against Musk, labeling the giveaway as an “unlawful lottery” that violated both Pennsylvania’s nuisance and consumer protection laws. [10] Krasner’s argument that the giveaway functioned as an illegal lottery accused Musk of violating Pennsylvania statute which codifies that the Commonwealth’s lotteries must be state-regulated with both transparent and specific guidelines. [11] 

The complaint specifically uses Musk’s description of the giveaway as “random” to prove the purpose of setting a prize was functionally the same as gaming a lottery. In arguing against violations of common nuisance lottery laws, Musk’s attorneys revealed voter giveaways were not randomized, but instead hand-chosen as “spokespeople” for the message of the petition. America PAC’s treasurer even testified in court that he would not have used the word “chance” in describing the selection process. [12] While this may have helped Musk’s case that the giveaway was not a lottery per se, it did not help allegations of deception. 

Krasner responded to the fact that prize recipients were actually chosen ahead of time by arguing that further supported the argument that the entire giveaway was a “glorifies political marketing” effort presented through a “grift.” This reasoning was also relevant to Krasner’s argument about unfair trade practices and consumer protection violations justifying a request for an injunction. [13] The Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL) prohibits fraudulent or otherwise deceptive tactics that could cause a “likelihood of confusion or of misunderstanding.” [14] America PAC’s use of nondisclosure agreements about how the money was received, a lack of publicly communicated limits on the usage of signatories’ data, and misleading statements surrounding the selection process contributed to confusion according to plaintiffs.

According to precedent from both the Pennsylvania Supreme Court in Ash v. Continental Insurance Company and the Court of Common Pleas in Commonwealth v. Chesapeake Energy Corp., the UTPCPL is meant to be “liberally construed,” giving some the impression that Krasner’s case could have gone through. [15,16] Despite this, Judge Angelo Foglietta denied the injunction request. Yet, Krasner maintains he could continue to consider criminal charges despite the failure of the civil lawsuit. [17]

Legal battles in other states continue on. An Arizona voter has filed a class-action lawsuit in the Austin Division of the Western District of Texas, seeking damages because Musk and America PAC knowingly deceived the public by implying all signatories had equal chances of winning through the supposedly “random” selection process. [18] In the Western District of Michigan, Attorney Robert Alvarez alleged fraud due to the predetermination of prize recipients as well. However, Alvarez also specifically stressed deceptions about America PAC’s preferences of prize recipients’ political leanings, claiming the deception affected voters like him who supported the Harris-Walz campaign but wished to affirm their support of the First and Second Amendments. [19]

Although Krasner’s request for an injunction was blocked in Pennsylvania, the legal and political worlds have yet to see how Michigan and Arizona plaintiffs’ complaints will fare in court. Recent legal history has proved troubling for public integrity and anti-corruption laws, with recent Supreme Court decisions such as Snyder v. United States allowing politicians to accept post-facto gratuities. [20] Narrow constructions of laws that penalize deception, lack of transparency, and a slew of other corrupt practices, have lessened the American electorate’s ability to hold uber-powerful donors and politicians accountable. The sheer number of different reasons to look into the PAC’s actions should concern legal institutions themselves. Actions this legally dubious (at best) are inherently contradictory to principles of political integrity entrenched in the legal and constitutional institutions of America.

The opinions and views expressed in this publication are the opinions of the designated authors and do not reflect the opinions or views of the Penn Undergraduate Law Journal, our staff, or our clients.

[1] Schultz, D., & Vile, J.R. (2005). The Encyclopedia of Civil Liberties in America (1st ed.). Routledge. https://doi.org/10.4324/9781315699868 
[2] FEC. America PAC Report of Receipts and Disbursements , docquery.fec.gov/pdf/929/202410159698270929/202410159698270929.pdf. 
[3] Dale, Maryclaire. “Judge Denies Philadelphia Da Larry Krasner’s Request to Block Elon Musk’s Giveaway.” 6abc Philadelphia, 4 Nov. 2024, 6abc.com/post/lawsuit-elon-musk-1m-giveaway-returns-philadelphia-court/15507410/. 
[4] Catalini, Mike. “Musk Offers Voters $1 Million a Day to Sign PAC Petition Backing the Constitution. Is That Legal?” AP News, October 21, 2024. https://apnews.com/article/musk-1-million-giveaway-trump-voters-petition-b4e48acbfe04fde735e60b1911ad0197.
[5] “From Title 52-Voting And Elections.” § 52 USC 10307: Prohibited acts. https://uscode.house.gov/view.xhtml?req=%28title%3A52+section%3A10307+edition%3Aprelim%29.
[6] “Elon Musk on X.” X (formerly Twitter). https://x.com/elonmusk/status/1848147035607998575. 
[7] Blake, Aaron. “Does Elon Musk’s $1 Million Voter Giveaway Violate the Law?” The Washington Post. https://www.washingtonpost.com/politics/2024/10/21/elon-musk-petition-1-million-giveaway-election-law/. 
[8] Perez, Evan, Hannah Rabinowitz, and Marshall Cohen. “Justice Department Warns Elon Musk That His $1 Million Giveaway to Registered Voters May Be Illegal | CNN Politics.” CNN, October 23, 2024. https://www.cnn.com/2024/10/23/politics/elon-musk-justice-department-letter/index.html. 
[9] “Public Integrity Section (PIN).” Criminal Division | Public Integrity Section (PIN) | United States Department of Justice, July 24, 2024. https://www.justice.gov/criminal/criminal-pin.
[10] Court of Common Pleas of Philadelphia County. Complaint against America PAC, Musk. https://www.washingtonpost.com/documents/8a5e00b3-6871-456f-b787-736298a5c2d7.pdf?itid=lk_inline_manual_6. 
[11] Feirick, Jeff. “Pennsylvania Nuisance Law.” Penn State Law. June 2000. https://pennstatelaw.psu.edu/_file/aglaw/Pennsylvania_Nuisance_Law.pdf. 
[12] Dale, Maryclaire. “Judge Denies Philadelphia Da Larry Krasner’s Request to Block Elon Musk’s Giveaway.” 6abc Philadelphia, 4 Nov. 2024, 6abc.com/post/lawsuit-elon-musk-1m-giveaway-returns-philadelphia-court/15507410/. 
[13] Court of Common Pleas of Philadelphia County. Complaint against America PAC, Musk. https://www.washingtonpost.com/documents/8a5e00b3-6871-456f-b787-736298a5c2d7.pdf?itid=lk_inline_manual_6. 
[14] “Unfair Trade Practices and Consumer Protection Law.” PA Attorney General. Accessed November 12, 2024. https://www.attorneygeneral.gov/wp-content/uploads/2018/02/Unfair_Trade_Practices_Consumer_Protection_Law.pdf. 
[15] “Ash v. Continental Insurance Company.” Case Law | Find Law. Accessed November 12, 2024. https://caselaw.findlaw.com/court/pa-supreme-court/1653835.html/. 
[16] “Commonwealth of Pennsyvlania v. Chesapeake Energy Corp, No. 2015IR0069 (CT.. Comm. Pleas, Bradford Cty, 2015).” National Association of Attorneys General, October 9, 2020. https://www.naag.org/multistate-case/commonwealth-of-pennsyvlania-v-chesapeake-energy-corp-no-2015ir0069-ct-comm-pleas-bradford-cty-2015/. 
[17] Holden, Joe, Adam Fox, and Brad Nau. “Elon Musk’s $1 Million Voter Sweepstakes May Continue, Pennsylvania Judge Rules.” CBS News. Accessed November 11, 2024. https://www.cbsnews.com/philadelphia/news/elon-musk-lawsuit-larry-krasner-philadelphia-hearing/. 
[18] The National News Desk. “Arizona Voter Sues Elon Musk over $1M-a-Day Giveaway.” CBS Austin. Accessed November 11, 2024. https://cbsaustin.com/news/nation-world/arizona-voter-sues-elon-musk-over-1m-a-day-giveaway-save-america-pac-larry-kranser-philadelphia-da-lawsuit. 
[19] Egan, Paul. “Michigan Lawyer Sues Elon Musk, Alleging $1m Giveaway Plan Was Fraudulent.” Detroit Free Press, November 6, 2024. https://www.freep.com/story/news/politics/elections/2024/11/06/michigan-lawsuit-elon-musk-giveaway-prize/76080254007/. 
[20] Snyder v. United States. https://www.supremecourt.gov/opinions/23pdf/23-108_8n5a.pdf.