Texas AG Candidate Nathan Johnson Puts SpaceX Grant Deal in the Crosshairs
A Texas Democratic candidate for attorney general is signaling that, if elected, he will open an investigation into Elon Musk’s SpaceX over a state grant arrangement that delivered $110 million in taxpayer funds to the world’s richest person — a deal he says “sure looks like” corruption.
Nathan Johnson, a state senator who won the Democratic primary runoff for attorney general in May, told the Dallas News on Friday that the award of 99% of available rural broadband grant funds to a single company led by a billionaire ally of Donald Trump demands far greater legislative scrutiny than it has received to date.
“I am not declaring that corruption was at work in this instance. I am saying that it sure looks like it,” Johnson said. “Public confidence in the bidding process has been undermined.”
The Anatomy of the Starlink Grant Controversy
At the center of the dispute is a grant program administered by the Texas broadband development office (BDO) under the state comptroller, designed to expand fast internet access to customers in remote areas. SpaceX’s Starlink satellite program — which dominates the low-Earth-orbit internet satellite industry — was awarded the overwhelming share of the funds after the comptroller’s office revised the grant rules in a way that favored low-Earth-orbit satellite providers over ground-based fiber broadband operators.
The grants were signed off by Republican Governor Greg Abbott. Records show Musk has made prior monetary donations to Abbott, among many other recipients, though there is no suggestion those donations are linked to the broadband awards.
During a June hearing of the state senate’s business and commerce committee, Johnson pressed BDO officials on how the rule changes came about. BDO director Bryant Clayton told lawmakers the revisions followed a request from the governor’s office to compare Texas’s proposed structure with those of neighboring states.
“The office of the governor asked us to look at how our proposed structure compared to other states,” Clayton said, according to KUT News. “Generally … we were out of step with other nearby states.”
Eight companies offering ground-based fiber broadband subsequently complained in a letter that they appeared to have been cut out of the revised grant application process. Republican Senator Charles Schwertner, who chairs the committee, appeared to validate those concerns at the hearing.
“I’ll just say it bluntly. Favoritism and transparency are real big concerns that have been brought to my office,” Schwertner said.
Johnson’s Anti-Corruption Platform
Johnson’s primary campaign was built around a promise to overhaul the Texas attorney general’s office, currently held by Ken Paxton — the scandal-plagued hardline Republican recently nominated by his party to run for the U.S. Senate in November’s midterms. Johnson has said he would work closely with the state comptroller to audit how government contracts are awarded across Texas.
His pledge to investigate the Starlink grants effectively places a potential probe into Musk and SpaceX on the November ballot, as NBC News noted. SpaceX is headquartered in Starbase, Texas, making any state-level inquiry a directly local matter as well as a national flashpoint.
“The AG is supposed to ensure that government serves the public good over private interests, not the other way around,” Johnson wrote on X in June, linking to a speech attacking his Republican opponent in November, Mayes Middleton, who has declared himself a Trump loyalist.
Abbott’s Defense: Cost and Speed
Abbott has defended the grants on practical grounds, arguing that low-Earth-orbit satellite service is the most viable option for the most remote areas of Texas, where traditional fiber is expensive and slow to deploy.
“Governor Abbott supports getting high-speed internet to rural Texans as quickly and cost-effectively as possible,” press secretary Andrew Mahaleris said in a statement. “Low Earth orbit satellite service is essential for the most remote areas where traditional fiber is too expensive and slow to build. The Broadband Development Office in the Office of the Comptroller made the decision to adjust the grant disbursement schedule to better align with other states and allow providers to access capital earlier, helping deliver service to rural communities faster.”
SpaceX did not respond to a request for comment from the Dallas News, and the company had not responded to a separate inquiry as of publication.
The Bottom Line
The numbers alone make this a story worth tracking. A single company, led by the world’s wealthiest individual, captured 99% of a state broadband grant pool totaling $110 million. Rule changes that tilted the competitive landscape toward that company’s technology were implemented after the governor’s office asked the BDO to revisit its framework. Eight fiber providers say they were effectively sidelined. A Republican committee chair has publicly acknowledged concerns about favoritism and transparency.
Whether that constitutes corruption is a question Johnson is careful not to answer definitively — but it is one he is explicitly promising to investigate if Texas voters give him the authority to do so. The outcome in November will determine whether the state’s top law enforcement office turns its attention toward Starbase, or whether the current grant structure remains untouched.