Enron to Bernie Madoff, at the end of every great American financial
scandal, the totality of the perpetrators’ greed seems to be matched
only by the public’s incredulity at how such a thing could be allowed
thanks to Elon Musk, there’s a good chance we may all be asking this
question again soon.
Senate Finance Committee and the House Ways and Means Committeehave
launched a probeinto tax incentives paid to
solar companies, according to theWall
Street Journal. The committee probes, led by their respective
Republican chairmen, Rep. Kevin Brady of Texas and Sen. Orrin Hatch of
Utah, have found an appropriate and disturbing target to begin this
a solar installation company set to be purchased by Tesla Motors Inc.,
is one of the seven companies named in the initial investigation.
grossly subsidized, Musk’s SolarCity has become an albatross of waste,
fraud, and abuse of taxpayer dollars. As legitimate earnings and cash
become even scarcer for SolarCity, its entanglement in the Tesla
empire suggests that a drastic reckoning is not only imminent but
emboldening Musk to become more outlandish and reckless.SolarCity
has been doubling down on the failed model of taxpayer support.
SolarCity is run by Musk’s cousins, Lyndon and Peter Rive. During his
chairmanship at SolarCity, Musk’s family enterprise has taken inbillions
of taxpayer dollars in subsidiesfrom both the
federal and local governments. But the subsidies and sweetheart deals
were not enough, as losses and missed projections continued to mount.
rather than endure the embarrassment of collapse and further damage to
the public image of Musk and Tesla, the cousins conspired to have
Tesla simply purchase SolarCity this year. The conditions of the deal
screamed foul play.
say nothing of what sense it might make for an automaker to purchase a
solar installation company, Tesla stockholders were being forced to
absorb a failing, cash-burning company and pay top dollar to do so.
cost-cutting and corporate restructuring should have been the
priority for a company swimming in debt and burning through available
cash, SolarCity, in fact, has been doubling down on the failed model
of taxpayer support. The desperate thirst for handouts has manifested
itself in some of the murkiest political waters imaginable.
to Musk’s cozy relationship with New York Gov. Andrew Cuomo, a
Democrat, the state has granted at least $750 million of its
taxpayers’ money to SolarCity, building the company a factory and
charging it only $1 per year in rent.
would be hard to imagine such an operation would not be lucrative for
its shareholders. Andyet,
somehow, SolarCity has never made a profit.
How Extensive Is
not just in New York. In this year’s race for Arizona Corporation
Commission, the state’s public utilities overseers, only one outside
group funneled cash into the contest. SolarCity
has never been able to survive without serious help from government
subsidies and grants.
of the $3 million donated by that group, Energy Choice for America,came
from SolarCity. The beneficiaries are candidates who have
signaled their willingness to be part of the “green machine” that
greases the skids for lucrative government subsidies.
through taxpayer dollars, buying elections, and expanding a network of
crony capitalism has become so inherent to the SolarCity model that $3
million to a public commissioner’s race, brazen though it may be, is
only a drop in the bucket for Musk and SolarCity.
2013 alone, SolarCity received $127.4 million in federal grants. The
following year, in which it received only $342,000 from the same
stimulus package, total revenue was just $176 million and the company
posted a net loss of $375 million.
an expansion of operations and claims to be the leader in the
industry, SolarCity has never been able to survive without serious
help from government subsidies and grants. The failure to responsibly
turn taxpayer dollars into a profitable renewable energy provider has
led to SolarCity’s collapse into the welcoming arms of Tesla.
with Tesla, SolarCity, in fact, will be right at home, compounding a
disastrous shell game that Elon Musk is playing with government
is almost half of Musk’s supposed net worth – taken from the pockets
of American citizens and put into companies that can survive only by
cannibalizing each other, spending without end, and promising that
success is always just beyond the horizon and yet never arrives.
American people are being taken on a ride by SolarCity, Tesla, and
Musk. The ride is fueled by a cult of personality in Musk. And it
costs billions of taxpayer dollars as he promises us not only the moon
but to harness the power of the sun and send us all to Mars.
the cases of Enron and Bernie Madoff, in the end, the cheated victims
wished to have woken up sooner to the hubris that enabled such a
downfall – or at least that regulators had pulled their heads out of
the sand before the full impact of the collapse was realized.
seen this story before and we know how it ends.
congressional investigations underway are not only necessary but a
signal that more must be done, and soon. We may not be able to help
Elon Musk stop himself from failing again, but we certainly shouldn’t
be the ones to pay for it.
past time for the American people to stand up to Musk and demand that
our legislators and other elected officials bring him back to earth
before spending one more dollar of our money. He’s wasted enough of it
admit it, Elon Musk can make me feel the Bern.
with Bernie on the billionaires. Some of them are ruining the
country. It’s not those who use their own noggins to come up with
ways to make money, whether by starting companies or investing
ones who bug me are the ones who are rich off my tax dollars.
a ton of moneyon his own – and continues
to. He founded X.com, an online payment company, with profits he
made off the sale of Zip2, the first online version of the Yellow
Pages. X.com eventually merged with Confinity and became PayPal.
$14.3 billionand he’s into space travel,
solar panels and electric cars. His partners in these cutting-edge —
but not-yet-profitable — industries are the taxpayers. None of these
businesses profit, and none would exist without massive government
which makes electric cars,struck
a deal with Nevadain 2014 to build a
battery factory in Reno. The state gave Tesla $1.3 billion in
special incentives, including an exemption from paying property
taxes for 20 years and $195 million in transferable tax credits
Tesla could sell for cash. That’s 15 times the size of any previous
package of incentives offered by Nevada and one of the largest
giveaways in American history.
factory and the 6,000 jobs will “change the trajectory of this
state, perhaps forever.” But was he bidding against himself? Where
else would Musk have built it? Reno is easily accessible by rail and
highway to Fremont, and Nevada has the only active lithium mines in
the United States.
for those tax credits, laws in 10 states require car companies
operating in those states to sell a certain number of “zero
emissions” vehicles. Since only electric cars qualify as “zero
emissions” vehicles, and these companies don’t, in general, make
electric cars, they buy these tax credits from Musk. So far, Musk
has made $517 million in profit at taxpayer expense.
addition, Tesla gets a 30 percent federal tax credit, which can
applied to any tax liability the company may incur. Thanks to tax
credits and carry-forward losses, the company already hasn’t paid
any federal income tax since 2008. In 2014, it paid $2.5 million in
corporate taxes — $178,000 to the states, $2.35 million to foreign
governments and a big fat zippy to Uncle Sam.
Tesla will be connected to the grid, it can sellany
excess renewable powerin its battery
facility to the Nevada electric utility for 50 percent higher than
wholesale. In fact, not only can Tesla sell excess electricity at a
premium, it buys it at discounts of 10 percent to 30 percent
pursuant to its agreement with Nevada. Taxpayers pick up the cost of
that discount by having $1.84 added to their annual electricity
all, according to a 2015story
in the Los Angeles Times, Musk has raked in $4.3 billion in
government money. SolarCity, the solar panel firm that operates out
of office space abandoned by Solyndra, the poster child for crony
capitalism in the Obama era,got
$300 millionin federal grants and tax
incentives. SpaceX, the space travel firm, received $5.5 billion in
Steyer, another Californian who has learned to work the levers
of power to his benefit but not ours.
fashions himself the new Al Gore. He assails the Koch brothers as
purveyors of evil for profit. But he has become America’s largest
political donor – he gave $75 million to supposed green candidates
in the non-presidential 2014 election and plans to give more this
year. He gives so much money, in fact, that, according to the Wall
would rather lose control of the U.S.Senate
than cross him. And he’s used that influence to do a number of
things that benefited his bottom line.
pushed through a measure to force California to use half renewable
energy by 2050 – a boon for his green energy companies.
supports President Obama and his move to crack down on consumer
lending, but he engages in similar practices throughKilowatt
Financial, LLC,a company that finances
solar panels at predatory rates. Even Democrats in Congress are
asking how this differs from the practices that led to the subprime
made much of his $1.6 billion in estimated net worth from the sale
of fossil fuels but now finds them irredeemably evil. He fought the
Keystone XL pipeline, which would have carried tar sands from
Alberta in western Canada to oil refineries on the Gulf Coast. But
he so happened toown
stockin a firm with a pipeline from the tar
sands to the Pacific coast.
haughtily promised his Farallon venture capital group would divest
in fossil fuels – but kept those outside North America. Those he not
only kept but sought to grow. He’s had a long and prosperous
relationship with Russian energy firms facilitated by his friends in
the Obama administration.
up to his neck in the scandal that led to the resignation of Oregon
Gov. John Kitzhaber, making payments to the governor’s fiancee,
Cylvia Hayes, a green energy advocate. And, despite his admonitions
that others cut energy use to save the planet, he owns six huge
homes and travels the globe constantly in Trumpian luxury.
is right that these guys are growing rich by making government’s
priorities their priorities rather than ours. He’s right games are
being played that average people can’t take part in. He’s right that
corporate cronyism is a huge problem in this country.
his enemies in this — the folks most guilty — are closer than he