Elon Musk’s SolarCity Sucked Into Federal Corruption Probe
By Paul Homewood
Why is that when we smell the scent of greenery, the stench of corruption is never far behind?
From the Daily Caller:
SolarCity, one of the largest installers of rooftop solar panels in the U.S., has been subpoenaed by the Department of Justice as part of an ongoing corruption probe into New York Democratic Gov. Andrew Cuomo’s administration.
“The U.S. attorney’s office did request information from us to aid in the investigation and we will cooperate fully,” the company told Newsday in a statement, stressing it “is not the subject or focus of the investigation, as we were not involved in the vendor selection or contracting process.”
Federal prosecutors want SolarCity’s records regarding Cuomo’s so-called Buffalo Billion plan, which has New York taxpayers paying $750 million to finance a one million-square-foot “gigafactory” for SolarCity near the city of Buffalo.
Once complete, SolarCity will rent out the gigafactory for $2 a year for the first ten years on the condition the company hit “full production levels six months after construction ends, employ 1,460 in Buffalo and 500 at the plant for five years,” according to Newsday.
SolarCity also “agreed to employ 5,000 in the state by the 10th anniversary of the plant and spend around $5 billion in the state during that time,” Newsday reports, adding if the company fails “to meet employment milestones, SolarCity must pay the state upward of $41.2 million a year.”
Cuomo announced his plan to pay $750 million for a gigafactory in 2014 as part of a program giving businesses moving into New York state 10 years of tax freedom. Now, the Cuomo administration is under a federal investigation for improperly handing out state contracts to people who may have defrauded state officials.
In 2015, questions began to circulate over the transparency surrounding the Buffalo Billion project. One of Cuomo’s biggest campaign donors was given state construction contracts for two of the three facilities being built in Buffalo. The state had also taken a year to produce records on the contracts.
U.S. attorney Preet Bharara began a corruption investigation in the midst of such news, focusing on some of Cuomo’s closest political allies and their ties to the Buffalo Billion. Investigators subpoenaed Cuomo’s office in March after demanding records from several companies, including the one that’s a major Cuomo donor.
“When bids are rigged, your people suffer. When cronyism reigns, your people suffer,” Bharara said in February. “When transparency takes a backseat to backroom deals, your people suffer. They suffer in loss of faith. They suffer in higher taxes. They suffer in loss of services. They suffer in opportunities squandered.”
But even more pressing than the corruption probe is SolarCity’s financial health as a company. SolarCity’s shares plummeted 27 percent Tuesday after the company posted larger-than-expected fourth quarter losses.
The company’s stocks have lost more than 50 percent of their value this year and company chairman Elon Musk has had to transfer $255 million from his space contracting company to help buoy SolarCity’s finances.