The U.S. Department of Justice (DOJ) has launched a criminal investigation into Tesla regarding personal benefits received by its CEO, Elon Musk, since 2017. This probe also extends to the use of company funds to construct a planned glass house known as “Project 42.” The investigation, led by the U.S. Attorney’s Office for the Southern District of New York, is seeking information on transactions between Tesla and entities connected to Musk, suggesting potential criminal charges are being pursued.
Key Takeaway
The U.S. Department of Justice has launched a criminal investigation into Tesla to examine potential personal benefits received by CEO Elon Musk and the use of company funds to build a proposed glass house. The investigation, which extends beyond the glass house project, suggests that the authorities are considering possible criminal charges. The Securities and Exchange Commission is also involved in investigating the secret glass house project. Regulations require public companies like Tesla to disclose perks and personal benefits provided to top executives if the total value exceeds
0,000.
Extended Federal Scrutiny
The Securities and Exchange Commission (SEC) is already investigating Project 42, which was allegedly planned near Tesla’s Austin-area factory. The aim of the investigation is to determine whether Tesla adequately disclosed the perks provided to Musk. While Tesla had previously claimed that it did not offer personal benefits to top executives, federal authorities are now seeking to verify this statement.
Elon Musk’s Response
Musk has denied claims about the glass house and stated that it has not been built, is not under construction, nor is it part of any future plans. In Walter Isaacson’s recently published biography on Musk, mention of a glass house is made, but it notes that Musk has deferred its construction. Reports from the book reveal Musk’s vision of creating a unique structure that resembles something from another galaxy landing in a lake.
The DOJ investigation originated internally after Tesla employees expressed concerns about the purpose of the large-format glass panels the company had ordered. Among those who raised alarms was Zack Kirkhorn, Tesla’s former CFO, who stepped down in August.
Regulatory Requirements for Disclosure
It is worth noting that Tesla is not the only company facing scrutiny from the SEC and DOJ regarding executive perks. SEC regulations dictate that public companies must disclose personal benefits, including housing reimbursement, private security, or private airplane use, provided to top executives if the total value exceeds $10,000.
