Tesla Under Scrutiny for Glass House Project
The Wall Street Journal has reported that two government agencies are currently investigating Tesla’s secretive glass house project, known as “Project 42.” In July, concerns were raised about CEO Elon Musk potentially using company funds for the project, prompting an investigation by the automaker’s board. The US Attorney’s Office for the Southern District of New York has now requested details on the project’s expenses and any personal benefits Musk may have received. Additionally, the Securities and Exchange Commission (SEC) has initiated a civil probe and is seeking the same information.
Plans for Project 42 included the construction of a glass structure that appeared to be a living room with bedrooms, bathrooms, and a kitchen, near Tesla’s facilities in Austin, Texas. A few concepts envisioned it as a “twisted hexagon” or glass cube similar to Apple’s 5th Avenue store. The Journal previously reported that the board launched the investigation after workers raised concerns about special glass ordered for the project, which they believe cost the company millions of dollars. It is unclear whether the investigation has been completed and whether the company’s special glass order has been pushed through.
As the release notes, the SEC requires transactions over $120,000 when a director has a material interest in them. Any personal benefits paid to directors in excess of $10,000 must also be disclosed to investors. However, authorities have only just begun to investigate the initiative, and these investigations may not lead to formal charges.
In addition to investigations into Project 42, Tesla is also reportedly facing inquiries from federal prosecutors about the mileage of its vehicles. The company is being questioned after Reuters reported last month that its electric cars often fail to meet their range ratings and that the company created a team specifically to cancel service appointments related to mileage complaints.
