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Elon Musk’s SolarCity Sucked Into Federal Corruption Probe

May 15, 2016
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By Paul Homewood

 

h/t Oldbrew

 

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http://dailycaller.com/2016/05/13/elon-musks-solarcity-sucked-into-federal-corruption-probe/#ixzz48kAa3uuw

 

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.

 

http://dailycaller.com/2016/05/13/elon-musks-solarcity-sucked-into-federal-corruption-probe/#ixzz48kAa3uuw

10 Comments leave one →
  1. May 15, 2016 10:58 pm

    really great snake oil salesmen are part and parcel of the landscape and history of america

  2. May 16, 2016 1:03 am

    Tip of the iceberg. Much other stuff also coming out. This was merely the biggest deal in that program. See previous posts elsewhere on SolarCity problems. They are toast.

  3. May 16, 2016 3:19 am

    It’s time to end Gov. subsidies in general, if you want to attract businesses offer competitive tax rates and reasonable reg. based on actual science. This type of deal is a magnet for corruption and how can you be equal under the Law when only a select few will be offered “special” deals and access.

    • Tim Hammond permalink
      May 16, 2016 9:20 am

      Corporation tax is ludicrous anyway. Investors only care about after-tax returns, thus the tax must be paid by somebody other than the investor – provided you have properly competitive markets, where returns on investment are the lowest commensurate with continued investment.

      Corporate taxes are paid by staff and/or customers, in lower wages and/or higher prices.

      The simple proof is to look at regulated industries where prices are based on returns to investors. Lower tax and prices are lowered.

      The other way to think about is that tax is a refund on prices we have all willingly paid. Which is pretty bonkers too.

  4. May 16, 2016 8:06 am

    ‘Hype surrounding Tesla’s success has translated into significant overvaluation of the stock.’

    Who knew?
    http://www.marketwired.com/press-release/-2108010.htm

    And how do NY taxpayers feel about subsidising this crock?

  5. Bloke down the pub permalink
    May 16, 2016 1:00 pm

    I’ll be mighty peeved if I don’t get my trip to Mars because Elon has had to bail out a bunch of greens.

  6. Bitter& Twisted permalink
    May 16, 2016 1:21 pm

    it’s all starting to unravel.
    Such a pity it has taken so long and cost so much.
    I also suspect that most of those who have trousered loot will get away with it, thanks to “friends in high places”.
    in fact many of these friends in high places, will have been first in line to get their palms greased.

  7. John F. Hultquist permalink
    May 16, 2016 4:42 pm

    I’ve read this script – seen this movie – before. More than once.

    Many years ago a small group of well-off folks borrowed money and started a small winery. When the dregs hit the fan, the owner-of-record was a poor nurse’s “Aid” and her unemployed husband. Via her job at the hospital she knew the nurse-spouse of one of the instigators. After bankruptcy and sale of assets the couple got to keep the picture book of the winery’s rise and fall.

    In the current case, the principals have profited and run. This bit:
    SolarCity must pay the state upward of $41.2 million a year.

    … is laughable. Makes me think of the cartoon “Peanuts” where Lucy holds the football for Charlie Brown. Link

  8. May 17, 2016 11:24 am

    “Oh, what a tangled web we weave…..when first we practice to deceive.” Walter Scott, Marmion

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