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DOJ opens probe of Elon Musk over his perks at Tesla

By Jake Beardslee · September 20, 2023

In brief…

  • The Department of Justice is investigating whether Tesla has improperly provided personal benefits to CEO Elon Musk since 2017.
  • The criminal probe is also examining whether Tesla used company funds to build a proposed glass house for Musk near its Austin factory.
  • The investigation began after employees questioned millions of dollars spent on glass panels and their planned use.
  • The SEC is also probing the glass house as companies must disclose executive perks over $10,000.
Federal agencies are investigating Tesla for potentially illegal perks provided to CEO Elon Musk.  Ministério Das Comunicações/Wikimedia

The U.S. Department of Justice has opened a criminal investigation into personal benefits that electric vehicle maker Tesla may have improperly provided to its CEO, Elon Musk, starting in 2017.

The federal probe is examining whether Tesla used company money to build a glass house near its new factory in Austin, Texas, as a private residence for Musk.

The U.S. Attorney’s Office for the Southern District of New York has requested information regarding transactions between Tesla and entities tied to Musk as part of the investigation. The request indicates prosecutors are going beyond just examining the secret “Project 42” glass house and are pursuing potential criminal charges related to other perks Musk may have received from Tesla, according to a report in the Wall Street Journal.

Securities and Exchange Commission regulations require public companies to disclose perks and personal benefits provided to executives if the total value exceeds $10,000.

Musk has previously stated no glass house has been built, is under construction, or has been planned. Musk’s recent biography by Walter Isaacson does mention plans for a glass house, but said Musk “put off building it.”

According to Isaacson, Musk envisioned the house would look like “something fell out of space, like a structure from another galaxy landed in the lake.”

The glass house investigation began internally after employees raised concerns about Tesla’s purchase of millions of dollars worth of large-format glass panels and how they would be used. Tesla CFO Zack Kirkhorn, who stepped down in August, was among those questioning the glass panels.

The SEC is also investigating the secret Project 42 house. Both agencies want to know if Tesla properly disclosed any perks Musk received, as Tesla has said it does not provide perks or personal benefits to executives.