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corporate accountability
Delaware Just Caved to Billionaire Bullying By Overhauling Its Corporate Law
As Musk is trying to gut the agencies that enforce federal regulations, state corporate law is poised to become even more important. Delaware should have held firm.
Mar 27, 2025
While Elon Musk attacks federal agencies’ ability to protect us from the worst excesses of corporate power, a little known Musk initiative sailed through the Delaware legislature this week. Delaware’s corporate law drew Musk’s ire when its well-regarded Court of Chancery sided with Tesla shareholders and tossed out his $56 billion pay package. Musk packed up his Tesla toys and moved the company’s incorporation to Texas, but his lawyers still pushed Delaware lawmakers to twist the state’s laws to suit his oligarchic interests and give him more power over our lives.
The Delaware House passed Senate Bill 21 (SB 21) on March 25, after the Delaware Senate passed it on March 13. Governor Matt Meyer, who played a central role in the bill’s passage, promptly signed it into law.
Most companies operate under Delaware’s corporate law, with about two-thirds of S&P 500 companies incorporated in the state, and most corporate lawsuits occur in Delaware’s special Court of Chancery. And as corporate interests have eroded many federal tools of corporate accountability—like federal financial, environmental, and worker safety regulations—Delaware corporate law has become one of the last mechanisms of corporate accountability, especially for shareholder lawsuits. Now, as Musk is trying to gut the agencies that enforce federal regulations, state corporate law is poised to become even more important.
Insulating the self-serving decisions of corporate insiders from challenge and gutting the federal agencies and protections that hold corporate power accountable are two sides of the same coin.
Regular shareholders like working peoples’ pensions can bring lawsuits challenging corporate misconduct. But corporate law gives directors and officers broad latitude to make decisions free from liability—even if they are very costly to the corporation and its stakeholders. Courts, however, look more closely at decisions by corporate insiders—including controlling shareholders like Musk, Mark Zuckerberg, and private equity firms that often retain significant stakes in companies after they take them public—when there are conflicts of interest.
The case challenging Musk’s $56 billion Tesla pay package was one of those instances. Upset that a Delaware judge ruled against him in that case, Musk disparaged her and Delaware courts, reincorporated Tesla and SpaceX in Texas, and called on others to do the same.
Corporate insiders convinced Delaware legislators that they were in a hostage situation: Either overhaul their state’s corporate law to give more power to Zuckerberg, private equity firms, and other corporate insiders to everyone else’s detriment by passing SB 21 immediately, or face a mass exodus of corporations and a corresponding slashing of their state budget. Delaware Rep. Madinah Wilson-Anton said, “Our budget is being held hostage and we’re supposed to just listen to the demands, but we have not been told who they’re coming from.”
However, since SB 21 would make it much harder for regular shareholders to hold insiders accountable for their self-serving actions in Delaware courts, many organizations representing regular shareholders have spoken out against the bill, saying its passage would make Delaware less attractive as a state of incorporation. Rep. Wilson-Anton noted: “When we continue to pass bills that are catering to a very small minority of companies that have lost in court and are upset they lost in court, it creates an environment where other companies say, ‘You know what, we’re just gonna stay in our home state because Delaware is just a state where the highest bidder gets to write the law.’” Meanwhile, a recent poll found that only 16% of Delaware voters believe that SB 21 should have passed as is and 63% are less likely to vote for legislators who back SB 21.
Rewriting Delaware corporate law at the behest of Musk and other corporate insiders makes no sense. Insulating the self-serving decisions of corporate insiders from challenge and gutting the federal agencies and protections that hold corporate power accountable are two sides of the same coin. Heads Big Tech oligarchs win, tails the rest of us lose. As the former head of the Office of Information and Regulatory Affairs K. Sabeel Rahman said, “a world without government isn’t a world where we’re not being governed. It’s just we’re being governed in a super undemocratic way.”
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'Profoundly Dangerous': Trump Moves to Seize Control of Independent Agencies
"Americans should understand exactly what this is: A giant gift to the corporate class and a Trumpian power grab."
Feb 19, 2025
U.S. President Donald Trump on Tuesday signed an executive order aimed at bringing the nation's independent agencies—including the Federal Trade Commission and Securities and Exchange Commission—under his control, a sweeping power grab that's expected to spark a legal fight with enormous stakes for the country.
The new executive order, titled "Ensuring Accountability for All Agencies," laments that previous administrations "have allowed so-called 'independent regulatory agencies' to operate with minimal presidential supervision" and states that, going forward, "the president and the attorney general, subject to the president's supervision and control, shall provide authoritative interpretations of law for the executive branch."
The order goes on to require that "all executive departments and agencies"—including those granted some independence from the presidency by Congress—"shall submit for review all proposed and final significant regulatory actions to the Office of Information and Regulatory Affairs (OIRA) within the Executive Office of the President before publication in the Federal Register."
OIRA is part of the Office of Management and Budget, which is run by Project 2025 architect and far-right extremist Russell Vought.
In a fact sheet released alongside the order, the White House specifically names the FTC, the SEC, and the Federal Communications Commission (FCC) as agencies it claims have "exercised enormous power over the American people without presidential oversight."
The new order exempts from its far-reaching mandates the "monetary policy functions of the Federal Reserve."
"Not incidentally, both the FTC and SEC have ongoing investigations or enforcement actions against companies owned by Elon Musk."
Robert Weissman, co-president of Public Citizen, said in a statement that the executive order marks an "illegal" attempt to "shield corporations from accountability and centralize more power with Trump and his minions."
"This is a profoundly dangerous idea for the nation's health, safety, environment, and economy—and for our democracy," he added. "Congress made independent agencies independent of the White House for good reason."
Weissman noted that the independence of agencies such as the FTC and SEC is "designed to enable them to perform these duties without undue political pressure from giant corporations, the super-rich and the super-connected."
"Trump's EO would dissolve that independence and put the agencies under Trump's thumb, ensuring they turn a blind eye to wrongdoing by favored corporations and leave consumers and investors out to dry," Weissman continued. "Not incidentally, both the FTC and SEC have ongoing investigations or enforcement actions against companies owned by Elon Musk. Americans should understand exactly what this is: A giant gift to the corporate class and a Trumpian power grab."
The Washington Postreported that Trump's order sets the stage for "a potential Supreme Court fight that could give him significantly more power over those agencies' decisions, budgets, and leadership." Trump has already trampled decades of legal precedent by firing protected officials without cause, including the former chair of the National Labor Relations Board (NLRB).
"Courts have blocked or limited the reach of some of Trump's executive actions, but legal observers expect that the conservative-dominated Supreme Court may be open to broadening presidential power in at least some of the cases," the Post observed. "The justices are already considering a case regarding the scope of Trump's power over independent agencies, and Tuesday's executive order seems sure to prompt additional legal challenges."
Deborah Pearlstein, a constitutional scholar at Princeton University, told the newspaper that the White House is "deliberately teeing up a major question of constitutional law that will go to the Supreme Court for review."
The Supreme Court is currently controlled by a right-wing supermajority that includes three Trump-appointed justices.
Prior to Trump's order, the U.S. Justice Department—headed by Attorney General Pam Bondi—indicated that it would no longer defend the independence of the NLRB, FTC, and other agencies and would ask the Supreme Court to reverse precedent that has shielded independent agency leaders from termination without cause.
Reutersreported that "about two dozen companies, including Amazon and Elon Musk's SpaceX, have filed lawsuits since last year claiming the president should have the power to fire NLRB members at will."
"Several companies sued by the FTC have filed similar challenges against that agency," the outlet added. "They include Meta Platforms, Walmart, and Cigna's Express Scripts."
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SEC Pauses Climate Disclosure Rules Under Attack by Republican AGs
"Investors need reliable, comparable information about risks that registered companies face and how they are managing those risks," argued Democratic attorneys general who support the paused policy.
Apr 05, 2024
The U.S. Securities and Exchange Commission announced on Thursday that it would pause the implementation of climate disclosure rules for U.S. companies while it awaits the rulings on legal challenges related to those rules.
"The commission has determined to exercise its discretion to stay the final rules pending the completion of judicial review of the consolidated 8th Circuit petitions," the agency said in its order. "The commission will continue vigorously defending the final rules' validity in court and looks forward to expeditious resolution of the litigation."
Alongside @MassAGO, I’m leading a 19-AG coalition seeking to intervene in lawsuits against @SECGov’s rule requiring public companies to disclose comprehensive and comparable information about climate-related risks to investors.
— AG Brian Schwalb (@DCAttorneyGen) April 4, 2024
The rules are meant to force companies to make public any climate risks to their businesses. They have been challenged by attorneys generals from nine different states that are controlled by Republicans.
Meanwhile, 19 Democratic attorneys general are defending the policy, which they said in a Wednesday court filing "provides the states, their residents, and other investors with information about climate-related risks that is critical to making informed investment decisions."
"Investors need reliable, comparable information about risks that registered companies face and how they are managing those risks," the Democrats argued. "Climate-related impacts are undeniably one such category of risk."
Even if the rules were implemented, the SEC has been accused of "watering them down," because they don't include the greenhouse gas emissions related to companies' supply chains.
"Climate-related risks are financial risks, and investors have a right to know the full scope of a public company's emissions profile. This SEC decision will let big corporations off the hook in the United States, allowing them to avoid disclosure of emissions from throughout their supply chains," Sen. Ed Markey (D-Mass.) said when the rules were finalized last month
California has already passed legislation that requires large companies to disclose how much their supply chains are contributing to greenhouse gas emissions.
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