To be sure, Tesla/X/SpaceX CEO Elon Musk was nowhere near as rich in 2017 as he is now, but you would think he would have had enough money to buy a house.
But why would you personally buy a house when you can have the company you founded buy it for you — secretly and tax-free?
The Wall Street Journal published a blockbuster report on what Tesla called a top-secret plan: “Project 42” — a project that was nothing more than Tesla building a home for Elon Musk.
It was no regular home, however. It was specially built with a ton of glass outer walls — a special type of glass that is astronomically expensive.
So much of the precious glass came to the company’s factory that workers started to wonder what it was all for.
There is nothing wrong with the company paying for Musk’s house, so long as it’s reported as income that is approved by the board of directors.
After all, Tesla is a publicly traded company, and Elon has no right to secretly use company funds to build the house, avoiding a ton in taxes in the process and hiding it from shareholders.
Indeed, it’s a crime not to report it as income or inform shareholders.
According to the Wall Street Journal report:
“Federal prosecutors are scrutinizing personal benefits Tesla may have provided Elon Musk since 2017—longer than previously known—as part of a criminal investigation examining issues including a proposed house for the chief executive…”
“The new information indicates that federal prosecutors have a broader interest in the actions of Musk and Tesla than was previously known and that they are pursuing potential criminal charges. The Wall Street Journal reported last month that the Justice Department is investigating Tesla’s use of company resources on a secret project that was described internally as a house for Musk.” (Emphasis added.)
Breathe that in for a moment. It is almost as difficult to conceive of one of the world’s richest people spending time in prison as it is an ex-president. Of course, Musk is only under investigation.
But the absolutely tight security surrounding the “secret” house around Tesla sure seems to indicate that Musk did not want this known — not known by the workers, and probably not known by the Board.
And that means it wasn’t disclosed to the shareholders. That, along with the taxes avoided, is where the criminal implications come in.
There are allegations of other perks Musk “took” from Tesla:
Report continues below tweet:
This isn't just about the glass house in Texas anymore – federal prosecutors are looking at perks Tesla has paid Elon Musk going back years – and they've referenced a grand jury w/ @rfelliott @EmilyGlazer https://t.co/jsWDJvQZ2P
— Kirsten Grind (@KirstenGrind) September 19, 2023
As if that was not enough. Federal prosecutors in the Southern District of New York have also sought information about a separate issue: the driving range of Tesla’s electric vehicles. (New York prosecutors are looking into it because that is where the company stock is traded).
There are accusations that Tesla knowingly and significantly lied about the range of the batteries of the car.
Depending on who made that decision and how the mileage would be reported, that could turn out to be either a personal case against Elon, a conspiracy among several executives, or a criminal case against Tesla itself.
As we saw in the Trump Organization case, companies can be charged, and penalties range from fines all the way to dissolution — the death penalty for a business.
And this is just Tesla — the vast majority of Musk’s wealth is Tesla stock, which nose-dived throughout 2022. Imagine the trouble Musk might have with Twitter, SpaceX, and Neuralink.
He has done almost criminally stupid things with Twitter. What might be going on behind the scenes?
Regardless, Elon is going to go through some things…some more things.
This column is based on original reporting by Rebecca Elliott, Emily Glazer, and Kristen Grind of the Wall Street Journal.
I can be reached at jasonmiciak@gmail.com and on Twitter @JasonMiciak.
Editor’s note: This is an opinion column that solely reflects the opinions of the author.
