By Sadie Gurman and Jacob Gershman

Elon Musk's cash giveaways to swing-state residents is generating plenty of buzz -- and a warning from the Justice Department.

The department sent a letter to Musk's America PAC cautioning him that giving cash payments to registered voters who sign a petition might violate federal law, people familiar with the matter said.

The billionaire has been raining millions of dollars on the battleground electorate through his pro-Trump group. Musk's PAC is offering registered voters in Pennsylvania and six other key states a chance to win $1 million by signing a petition pledging support for the rights to free speech and firearms.

"The goal of the $1M/day prize is to maximize awareness of our petition to support The Constitution," Musk posted on his X social-media platform Sunday.

The Justice Department's letter said the PAC's payments could violate federal law against knowingly or willfully paying people to register to vote in election contests with federal candidates. The same law also criminalizes paying people to vote.

A spokesman for the America PAC declined to comment, but earlier this week, the America PAC said it was confident that its cash awards were lawful.

"The PAC is confident in the legality of this initiative and the predictable media meltdown is only helping America PAC's efforts to support President Trump," an America PAC representative said earlier this week.

Three registered voters in Pennsylvania and one in North Carolina have already won seven-figure prizes. The PAC has said it plans to do daily lotteries through Election Day. The offer is extended to both newly registered voters and those who were already on the rolls. Musk unveiled the contest after staging another cash giveaway that for a limited time doled out $100 to any verified Pennsylvania registered voter signing the petition.

The Justice Department's letter puts Musk on notice that the government thinks the cash giveaways are unlawful and wants them to stop.

Richard Hasen, an election law scholar at UCLA, thinks Musk is offering a financial incentive to register to vote that isn't permitted. "I think it's illegal whether it's $100 or a chance to win a $1 million," he said. Musk's awareness of the federal registration-buying prohibition is also a factor, he said.

Bradley Smith, a former FEC chairman, disagrees. He said the financial incentives are too indirect to be illegal. "If his real goal is to just give people an incentive to register, it seems to be a remarkably inefficient way to do it," said Smith.

Write to Sadie Gurman at sadie.gurman@wsj.com and Jacob Gershman at jacob.gershman@wsj.com

(END) Dow Jones Newswires

October 23, 2024 18:34 ET (22:34 GMT)

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