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Elon Musk and America PAC agreed to settle class-action lawsuits alleging fraud in a $1 million daily giveaway. The plaintiffs claimed winners were predetermined, not randomly selected.
Elon Musk and his political action committee, America PAC, have agreed to settle two proposed class-action lawsuits. The suits accused the group of defrauding voters in key battleground states ahead of the 2024 US presidential election. The plaintiffs alleged that Musk misled registered voters with a promised lottery-style $1 million daily giveaway to gather signatures for a petition supporting "free speech and the right to bear arms."
The lawsuits, filed by residents of Arizona, claimed that Musk and America PAC induced voters in seven swing states—Pennsylvania, Georgia, Nevada, Arizona, Michigan, Wisconsin, and North Carolina—to sign the petition by pitching a daily $1 million prize awarded to randomly selected participants. Plaintiffs argued the scheme was deceptive because winners were not randomly drawn from the pool of signatories.
Joy Havrick, an Arizona resident, alleged in a complaint that she was treated as a "marketing prop." "Had Plaintiff been aware that the lottery was not random, or that she did not have a fair chance to win the prize, or that her selection hinged on her perceived favorability to Defendants as a marketing prop, she would not have signed or supported the America PAC petition and would not have provided her PII [Personal Identifying Information] to Defendants," the complaint stated.
Musk and America PAC denied all allegations of wrongdoing. In their defense, representatives argued that recipients were vetted and chosen to serve as paid spokespeople for America PAC, with the $1 million designated as compensation rather than a random lottery win. A Pennsylvania judge previously allowed the payouts to continue after attorneys for the PAC successfully argued that it was not a lottery because winners were selected "based on their suitability" to serve as spokespeople.
The settlement was announced on Thursday, with parties notifying the federal court in Austin, Texas, that they had struck settlements subject to final court approval. A one-page filing read, "The Parties have reached a Settlement and respectfully request that the Court vacate all deadlines and stay further proceedings for a period of thirty (30) days to allow the Parties to finalize and execute the settlement agreement and file a Motion for Preliminary Approval."
Details of the settlement, including the amount Musk will pay, were not immediately disclosed. Court filings did not reveal financial or non-financial terms, and attorneys for the parties declined to comment or did not respond to requests for details. Attorney Mark Bankston, who represents Havrick, stated he is "unable to comment at this time."
According to a report by the Austin American-Statesman, 18 people received the $1 million payout during the run-up to Election Day in 2024. Musk established America PAC to back Donald Trump’s successful 2024 White House bid, deploying well over $200 million to support Trump via America PAC and another affiliated committee. The US Department of Justice had previously warned America PAC that the sweepstakes could violate federal law, which carries potential penalties including fines of up to $10,000 and prison sentences of up to five years.
The settlement resolves legal challenges to a high-profile political spending strategy that drew scrutiny from election law scholars and the Department of Justice. It highlights the legal risks associated with incentivizing voter registration and petition signing through large cash prizes, even when framed as compensation for spokesperson roles.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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