Elon Musk and Tesla are suspected of using company funds to plan a giant glass house for Musk in Austin, Texas, according to a new report.
The US Justice Department and the Securities and Exchange Commission are both investigating the electric car company and its owner, the Wall Street Journal reported.
Federal prosecutors in Manhattan have asked for information about the project, including how much Tesla spent and what it really was, sources told the Journal. Feds also want to know about other benefits Musk received. Public companies such as Tesla are required to disclose any benefits paid to senior executives that are worth more than US$10,000.
A Tesla programme known only as “Project 42” was internally investigated by the company earlier this year, according to the Journal. The secret project was reportedly an all-glass house for Musk in Austin near Tesla’s headquarters.
Employees became confused about why the company was spending millions of dollars on specialised glass, prompting an investigation from Tesla lawyers and board members, the Journal reported. It’s unclear if Tesla ever received the glass or how that investigation ended.
Musk, 52, and Tesla have been in regulators’ crosshairs for years. The mercurial multibillionaire has openly feuded with the SEC, accusing the agency of unfairly targeting him.
In 2018, Musk reached a US$20mil settlement with the feds after he lied about having the funding to take Tesla private, which had caused the company’s stock to spike. He later complained about the terms of the settlement, but a judge rejected his request to throw it out.
The SEC has pursued several cases recently involving CEOs receiving unreported benefits, according to the Journal. One of those cases involved the global Hilton hotel chain. – New York Daily News/Tribune News Service