Months before Antonio Gracias took a leading role in the “department of government efficiency’s” dismantling of the federal government, he was at Burning Man.
In the dusty Nevada desert, Gracias, a billionaire private equity investor and one of Elon Musk’s closest friends, attended Nova Heaven, a sunrise rave tribute to victims of the Hamas-led 7 October terrorist attack, and found himself dancing next to Rick Doblin – the US’s most prominent advocate for psychedelic drugs.
As hundreds of burners shuffled their sandy feet to psytrance music, Gracias started up a conversation. He had a piece of business advice.
Doblin, 71 with an avuncular smile and tranquil, confident demeanor, is the founder of the Multidisciplinary Association for Psychedelic Studies (Maps), and has spent decades trying to legalize drugs such as MDMA, commonly known as ecstasy, for use in the treatment of trauma.
Once mostly viewed as a party drug, medical researchers and advocates have seen promising results when using MDMA as a therapy aid. Gracias is a believer. He gave Maps $1m in 2020 and poured another $16m into funding psychedelics research at Harvard in 2023. Although his usual billionaire-casual attire would look more at home on Shark Tank than at a rave, he is part of a growing movement among Silicon Valley’s right wing that has become enamored with the potential – both therapeutic and commercial – of consciousness-altering drugs.
Earlier that year, the pharmaceutical arm of Maps, a for-profit public benefit corporation called Lykos Therapeutics, had raised $100m as it awaited a Food and Drug Administration (FDA) decision on whether to allow MDMA for psychotherapy treatment of PTSD. Approval could turn Lykos into a multibillion-dollar pharma enterprise with exclusive US rights to sell the drug for therapeutic use for a period of six years.
A few weeks before Burning Man, however, the FDA rejected the application over concerns about inadequate trial data. Doblin announced that he was exiting Lykos’s board, and the company laid off 75% of its staff. The business was in turmoil.
On the playa – according to Doblin’s recounting of events – Gracias told him that the FDA’s rejection wasn’t his fault and blamed the company’s other leaders for the failure. Let Lykos go bust and start again with a clean slate, Gracias advised, before the two men parted ways in the desert.
Weeks after their dancefloor meeting, Doblin reached out to Gracias with a proposition. The investors and board of Lykos were not going to let the company go bankrupt. Would Gracias consider launching a takeover bid and seize operational control?
As they corresponded about a potential plan, Doblin put Gracias in contact with the British hedge fund billionaire Christopher Hohn. By January, just before Gracias joined the “department of government efficiency” (Doge), Gracias and Hohn were working on a takeover of Lykos.
At the end of May, Lykos confirmed in a brief statement on its website that foundations owned by Gracias and Hohn had led a $50m Series B funding round that recapitalized the business. The sparse post included few details of the deal, and years of previous news releases from Lykos no longer appeared on the company’s website. In the following weeks, Lykos appointed a new CEO, new chief medical officer and remade the board of directors. Gracias and Hohn are now in control of the most prominent MDMA therapy company in the US. Gracias, Doblin said, is taking a hands-on role in its operations.
“It was the magic of Burning Man,” Doblin said. “I was sort of looking for a white knight that would come in and would be more focused on healing and on public benefit.”
Gracias’s new leadership of Lykos comes at a pivotal moment for psychedelics treatment in the US. Top Trump administration health officials, like the US secretary for health and human services, Robert F Kennedy Jr, have said they are open to accelerating the use of psychedelic therapy while wealthy tech backers have moved to solidify control over the industry.
But the takeover also highlights the ethical questions posed by Doge, even as its prominent leader, Elon Musk, has left the government. Doge staffers like Gracias have received unprecedented access to US agencies, including their processes and staff. There have been few guardrails on their work, or the ways they leverage that access in their non-governmental lives. Just a few months ago, it was hard to imagine that an active government employee at an agency embedded across the government would assume control over a pharmaceutical company seeking FDA approval.
“Maps and Gracias are going to try to seize the moment that we’re in,” said Ifetayo Harvey, a former Maps employee and executive director of the People of Color Psychedelic Collective. “I think the aim is to get MDMA-assisted psychotherapy approved by the FDA by any means necessary.”
The Guardian reached out to Gracias via Lykos and his private equity firm with an interview request, a request for comment and a detailed list of questions. Neither Lykos nor the firm responded.
Of drugs and Doge
In late July, a group of workers from the Service Employees International Union, the largest healthcare union in the US, marched down West Washington Boulevard in Chicago. They gathered outside the Valor Equity Partners investment firm, where Gracias is founder and CEO, to protest about his work with Doge, and what they see as its attacks on social security. At the front of the march, two demonstrators carried a banner with a message painted in bold white letters: “Antonio Gracias we will not forget your cruelty.”
While Gracias was gaining control of Lykos, he had also been engaged in another power play, as a member of Doge, which shortly after Donald Trump’s inauguration had begun gutting federal agencies and seizing control over government databases.
Gracias arrived at Doge as a longtime friend and business associate of Musk, with a relationship going back more than two decades. He was an early investor in Tesla through Valor Equity Partners, and was on the board of the automaker from 2007 until 2021. He still serves on the board of SpaceX, Musk’s rocket company, and is an investor in Neuralink, Musk’s brain chip venture. Valor has reportedly been in talks with lenders to raise $12bn for Musk’s xAI artificial intelligence firm. During Musk’s takeover and gutting of Twitter in 2022, Gracias acted as a mix of enforcer and proxy who tersely communicated Musk’s dictates to staff, according to the book Character Limit. Last year, he also contributed $1m to Musk’s America Pac effort to re-elect Donald Trump.
Gracias and Musk’s ties go beyond business. The two men have gone on multiple personal and family vacations together, including a trip to the magician David Copperfield’s Bahamanian island, according to a deposition Gracias gave in a 2023 court case. They have spent Christmas and other holidays together, and Gracias was a groomsman at the wedding of Musk’s brother Kimbal.
Gracias and Musk have also taken illegal drugs together, witnesses told the Wall Street Journal. Multiple news outlets have reported that Musk has himself used MDMA and psilocybin mushrooms, as well as recreationally used ketamine. Musk has stated that he has used prescription ketamine to treat depression, and has vehemently denied reports of drug use impairing his abilities.
As one of Musk’s most prominent staffers at Doge, Gracias began working at the Social Security Administration and led a taskforce that involved accessing immigration data at the Department of Homeland Security. He appeared on stage alongside Musk in March to present misleading claims about immigrants and public benefits, and then in April on the All-In podcast promoted the conspiracy theory that Democrats were attempting to “import voters”, a favorite theory of Musk’s.
Gracias claimed during his media appearances to be rooting out corruption at the SSA and specifically touted his efforts to uncover proof of immigrants illegally voting en masse. Yet the cases Gracias cited were hardly indicative of widespread malicious voter fraud, experts told NPR, such as a recently immigrated Ukrainian mother and daughter who told investigators they simply didn’t know they couldn’t vote.
Gracias remained with Doge even after Musk’s very public break-up with Trump, with Politico reporting that he regularly visited the White House to meet with top officials such as the deputy chief of staff, Stephen Miller.
Double-dipping with Doge
Gracias’s time in government ended in July, after his presence at Doge caught the attention of the AFL-CIO, the nation’s largest federation of unions. An AFL-CIO report in June raised questions about Gracias’s fiduciary responsibilities as CEO of Valor as the private equity firm manages retirement plans for public employees such as teachers and municipal workers.
“We noted Antonio Gracias appeared to be moonlighting for Doge when he’s supposed to be running Valor for the benefit of those pension plans,” said Brandon Rees, deputy director of corporations and capital markets for the AFL-CIO.
The report cited flight records, which the Guardian has viewed, that showed Valor’s private jet made 23 flights from the Washington DC region between January and April – suggesting Gracias was spending a large amount of time at Doge. In late July, the American Federation of Teachers sent a letter to nine public pension funds asking them to review the union’s investments with Valor, worth about $1.8bn.
One week later, Gracias announced in a lengthy statement on X that he had already resigned from Doge on 4 July and denied claims he had abandoned his responsibilities.
“I hope this is a moment where our compassion can be stronger than our anger,” he wrote.
Valor Equity Partners did not respond to requests for comment on this article and a detailed set of questions.
The pension fund controversy highlighted the ethical gray areas that Doge created, as some of its top staffers chose to pull double duty between public and private work. While Doge claimed to function with transparency, it has made public only a partial explanation of how its staffers accessed and used government data, as well as how their work may have informed their own future business endeavors. Doge’s broad mandate to reshape federal agencies allowed it to operate akin to a parallel government with little oversight or disclosure about its activities, ethics watchdogs and labor groups allege, and created larger concerns about what might constitute conflicts of interest for its staffers.
“With the lack of transparency, it leaves us really grasping at what it even means to be Doge,” said Faith Williams, a policy director at the Project On Government Oversight, a non-profit watchdog group. “We have seen so many, if not outright conflicts of interest then potential for conflicts of interest, and if not outright corruption, potential for corruption.”
That hazy dynamic raises questions about Gracias’s new leadership of Lykos, according to ethics experts, and what it might mean for a former Doge member to now be seeking regulatory approval. Although Gracias worked primarily with the SSA, Doge’s staffers have also been embedded in the FDA and fired employees reviewing clinical trials for Musk’s Neuralink.
Government ethics rules generally prohibit federal employees from representing private enterprises to agencies while working in government. There are also rules limiting how former employees can represent private interests even after they have left the government, in an effort to prevent workers from trying to seek favor for a future regulatory decision.
“You can’t be greasing the wheels and then say, ‘OK, now I’m going to quit and go pursue that approval,’” said Cynthia Brown, senior ethics counsel at the non-profit watchdog group Citizens for Responsibility and Ethics in Washington.
Doblin denied that Gracias’s role at Doge posed any conflict of interest, saying that the billionaire did not work with the FDA. Lykos did not respond to questions related to Gracias’s work at Doge.
Ecstatic expectations – dashed
Before the FDA rejected Lykos’s application, the psychedelics world had been riding high, anticipating that MDMA would soon be approved and behind it a slew of other treatments. Venture capitalists, politicians and wellness-minded celebrities had descended on the industry with a fervor, attending events like Maps’ annual psychedelics conference in Denver, Colorado, in droves. Recent years featured speakers including future hall of famer quarterback Aaron Rodgers, former Texas governor Rick Perry and former senator Kyrsten Sinema.
The 2024 application was the zenith of Doblin’s four-decade campaign to legalize MDMA for therapy purposes, part of his goal to reach “net zero trauma by 2070”. He founded Maps in 1986 on the premise that psychedelic drugs, which the US has long designated as illegal schedule 1 substances with a high potential for abuse, could have beneficial therapeutic uses and had been unfairly vilified, much like cannabis. The idea has gained significant scientific support, with preliminary evidence from studies showing that MDMA therapy can reduce PTSD symptoms.
Doblin has also suggested more grandiose and outre uses for MDMA therapy, such as conflict resolution between Israelis and Palestinians. Maps has meanwhile trained therapists in a wide range of countries, including conflict zones such as Ukraine, on how to conduct therapy with the drug.
As Doblin sought out funding and support for Maps and Lykos over the past decade, former employees say he began looking to broader circles of investors. They included advocates for military veterans interested in treating PTSD, big names in corporate finance and, controversially, the Republican donor Rebekah Mercer.
One method was to court investors with invitations to parties where drugs were being used, according to Harvey, the former Maps employee.
“Definitely part of their fundraising strategy is ‘Meet rich people at Burning Man, do psychedelics with them and get Maps money,’” Harvey, who was Doblin’s executive assistant in 2015, said.
Maps denied that it used drugs to as a means of drumming up investment.
“MAPS conducts all fundraising activities with the highest integrity and maintains strict ethical boundaries in all donor relationships and fundraising activities. MAPS does not supply controlled substances at any events or gatherings, nor do we use substances as a fundraising tool or strategy,” Maps said in a statement.
Doblin also told Business Insider last year that giving drugs to donors was “not common”.
Psilocybin Valley
Gracias’s takeover of Lykos adds to a constellation of venture capitalists and tech world elite who have invested heavily into psychedelics. Another major player alongside Lykos is Atai Life Sciences, which is testing a synthetic version of a drug secreted by a species of toad, and is backed by Peter Thiel’s VC firm.
While the juxtaposition of investors known for companies like Palantir or initiatives like Doge may seem incongruous with the wellness world’s pronouncements about psychedelics, it is actually a culmination of a symbiotic relationship that stretches back to at least the 1970s.
“There’s been decades and decades of overlap between Silicon Valley and psychedelics,” said Brad Burge, founder of psychedelics PR firm Integration Communications and a former Maps marketing director. “It’s just new in this epoch to be seeing this level of funding from highly public people.”
Gracias is not even the only member of Doge with ties to the psychedelics industry. Before joining the agency, Alexandra Beynon worked as head of engineering for her husband’s at-home ketamine therapy company Mindbloom. Dylan Beynon, who founded the company, posted on X that he had previously met with Gracias to talk about an investment with Mindbloom, although no partnership materialized.
Nor is Gracias the only member of Musk’s orbit to have donated to Maps. The former Tesla and SpaceX board member Steve Jurvetson, who the Wall Street Journal reported attended parties and consumed drugs with Musk, has also donated $2.6m to Maps through a non-profit he founded with his wife. In 2012, the non-profit organization that Musk founded with his brother Kimbal also directly donated $10,000 to Maps. The money went to funding the Temple Of Whollyness at Burning Man, a complex wooden art sculpture that tech money helped build before it was ceremoniously burned down.
A bump from Trump
Gracias’s takeover of Lykos comes at a fortuitous time for the psychedelics industry, with the Trump administration and Republican lawmakers embracing alternative drugs as part of the “Make America Healthy Again” movement. Although the Biden administration was also open to the use of psychedelics therapy, experts say, some top Trump health officials have gone further, calling for accelerating and re-evaluating the FDA review process.
“This line of therapeutics has tremendous advantage if given in a clinical setting, and we are working very hard to make sure that that happens within 12 months,” Kennedy said during a House committee meeting in late June, adding that the FDA commissioner, Marty Makary, agreed that psychedelics were a promising treatment.
Trump’s pick for surgeon general, Casey Means, has praised using psilocybin mushrooms for therapy as one of the most meaningful experiences of her life, much like Steve Jobs. Her brother Calley Means, one of Kennedy’s top advisers, meanwhile told Politico in June that the Republican party had become the “party of psychedelics research”.
The new administration’s outlook is potentially good news for Lykos, which is still recovering after the FDA ruled that the clinical trials it published in 2021 and 2023 suffered from bias issues and did not meet standards. One concern from those reviewing the studies was the difficulty of a double-blind test, since it was obvious to participants who got MDMA and who did not.
The FDA’s ruling required Lykos conduct another phase 3 clinical trial, probably a years-long endeavor that could cost millions. The company sought to contest the findings, while some advocates, including Doblin, blamed the anti-corporate psychedelics group Psymposia, accusing it of influencing the FDA against approval. Psymposia denied the allegations that it affected the decision.
“The FDA rejected Lykos for flawed science, not because of Psymposia, and the public still deserves better than pseudoscientific therapy,” Psymposia said in a statement. “Gracias’ willingness to back a company rejected for safety failures while pushing disinformation at Doge suggests a consistent disregard for facts in pursuit of profit.”
Other researchers took a middle ground, believing that, while MDMA therapy showed promise, it wasn’t ready for prime time.
“It’s very possible that MDMA is a safe and effective treatment under the right conditions,” said Mason Marks, lead of the Project on Psychedelics Law and Regulation at Harvard Law School’s Petrie-Flom Center. “But I don’t think that was demonstrated adequately by the data, and there were a lot of question marks.”
While Trump health officials project optimism, there is also wariness within the psychedelics industry that the new administration’s support for psychedelics therapy could risk politicizing the drugs or lead to a loosened scientific review of their safety and efficacy. Such a result could end up setting back the industry in the long run, some advocates argue.
“If it’s politicized in that way, then what happens in the future when we have a differently politicized administration?” said Burge. “Are they going to be able to roll that back and cite that there wasn’t sufficient evidence, and that psychedelic therapies were only approved because this particular administration felt like doing so?”
There’s little that would prevent the FDA under Kennedy and its new commissioner Makary from reversing the agency’s ruling against Lykos, Marks said. The FDA is not bound by its previous decision and has the power to request a less stringent follow-up trial, throw out its decision altogether or authorize a substance for emergency use. In June, the FDA also announced a “Commissioner’s National Priority Voucher” program that would allow qualifying drug developers to shorten the agency’s review time from 10 to 12 months to one to two months.
“I can’t really speak on the negotiations with the FDA,” Doblin said. “I hope that instead of a phase 3 study that the FDA may determine, I believe, that the data we gathered was valid.”
Any rollback of the ruling, even a partial one, could carry extraordinary benefits for Lykos and Gracias.
