Skip to comments.Carney: Green stimulus profiteer [Elon Musk] comes under IRS scrutiny
Posted on 10/15/2012 5:19:37 AM PDT by Cincinatus' Wife
Vice President Biden snickered during last week's debate at the suggestion there was waste, inefficiency or cronyism in the 2009 stimulus bill.
If he can stop cackling for long enough, Biden, the self-proclaimed "stimulus sheriff" should sit down with the IRS officials and the federal inspector general who are investigating a solar company owned by leading Obama donor and subsidy recipient Elon Musk.
Musk, as he cashes in on his solar investment by taking his company SolarCity public this month, had to make an awkward admission in his financial filings with the Securities and Exchange Commission.
The Internal Revenue Service is auditing SolarCity, the SEC filings reveal, and at the same time the Treasury Department's inspector general is investigating the company. The question at hand: Did President Obama's Treasury Department inappropriately give stimulus money to Musk's company.
Obama's stimulus transformed a long-standing tax credit for renewable energy investment into a direct grant from Treasury, worth 30 percent of a company's investment in a renewable project. Musk's company has applied for approximately $325 million in these stimulus grants, according to the SEC filing.
Treasury found that SolarCity repeatedly overstated the value of its investments, the SEC filings indicate. In those cases, Treasury awarded smaller grants than SolarCity had tried to claim. Now the department's IG and the IRS are doing a broader audit of the projects for which SolarCity and other large solar companies got stimulus cash. Investigators want to know if the companies regularly overstated the value of their investments and thus got overly generous taxpayer grants.
While no government body has accused SolarCity of wrongdoing, the company disclosed: "[I]f at the conclusion of the investigation the Inspector General concludes that misrepresentations were made, the Department of Justice could decide to bring a civil action to recover amounts it believes were improperly paid to us."
The Obama administration's possible mismanagement of the grant program is one issue here. Musk's intimate ties to politics are another.
Musk is the paradigmatic political entrepreneur, launching businesses that seek to capitalize on government favors and lobbying clout rather than provide goods or services that consumers demand.
Musk is CEO of and the biggest investor in Tesla Motors, an electric car company that depends on stimulus money and other subsidies. He also founded Space Exploration Technologies, or SpaceX, whose primary customer is the federal government.
Musk has personally given more than $100,000 to Obama's re-election campaign, including two gifts of more than $30,000 each to the Obama Victory Fund, which divides the money between the maximum allowable donations to the Democratic National Committee and the maximum to the Obama campaign. (Musk has also given generously to Republicans.)
Keep those max gifts in mind when Obama says he rejects donations from lobbyists. Musk is not a registered lobbyist, but he lobbies. Hard. In early 2010, auto industry news site Autoblog described his lobbying on Tesla's behalf: "Musk flew to Washington D.C. at least a dozen times since early 2009 to help make the case to the Department of Energy for nearly half a billion dollars in low interest loans as part of the Advanced Technology Vehicle Manufacturing program."
Tesla got that $465 million loan from Obama's DOE in order to produce the Model S, an all-electric plug-in car, which will also benefit from other stimulus goodies. This summer, Tesla began delivering the taxpayer-subsidized cars at $50,000 a pop.
Musk touts SpaceX as the cutting edge of free-enterprise space exploration, but so far the company's revenue seems to come mostly from Uncle Sam. My Washington Examiner colleague Richard Pollock reported that NASA has given $824 million to SpaceX through a special program known as the Space Act Agreements, which circumvents much of the oversight in other federal spending. Most notably, SpaceX just delivered freight to the International Space Station.
Musk's Obama ties go beyond his maximum donations.
One of Tesla's major investors is the Westly Group, founded by Steve Westly, who also sat on Tesla's board of directors. Westly is a top-tier Obama bundler, having raised more than $1.5 million for Obama over his two elections, according to the New York Times.
Obama put Westly on an energy policy advisory board, which was charged with giving recommendations on modifying federal subsidies to buyers of electric cars.
Musk has also recruited some of K Street's best-connected Democratic lobbyists. In the weeks after Obama's election in 2008, SolarCity and Tesla both hired McBee Strategic, the lobbying firm at the center of the green-energy subsidy universe. SolarCity and Tesla also retain the Podesta Group, founded by Obama confidant and transition director John Podesta.
Joe Biden might find this all funny, but taxpayers, if they knew, wouldn't likely be entertained.
This detracts from the progress of our missile technology that is shared with our military, it inhibits our national defense, and it damages our national identity....."
-——The Internal Revenue Service is auditing SolarCity——
The common term for such a procedure is faux audit
It consists primarily of two or three letters and a press release.
Looks like somebody ‘forgot’ to contribute to the reelection campaign.
And, the Journal adds, despite its celebrity cachet, Tesla still faces daunting competition from other auto makers who are also developing alternative-fuel vehicles.
Shares of Tesla closed trading down 2.1 percent on Friday at $27,65, with shares trading below their 50 -day moving average and well below the $32.54 close of September 17.
Tesla Motors Inc TSLA.O Chief Executive Elon Musk, on October 4, dismissed fears the electric carmaker was in financial trouble and said it was making an advance payment on the federal loan used to make its Model S sedan.
Tesla,in late September cut its full-year revenue forecast due to a slower-than-expected rollout of the Model S and said it was raising another $150 million through a share offering."
Live from the HuffPost Obama Pre-Inaugural Ball - blogging excerpts
Monday January 19, 2009
10:00 elon musk: the future is green
10:01 elon musk: oh my god, sharon stone is here!
10:55 Matt Petersen: What a rush to be here tonight at the HuffPo party and be party of this amazing event. Hats off to Arianna and her inimitable, irrepressible, and unmatched vision and passion. And to Elon Musk!, and all the other sponsors...
10:56 Matt Petersen: Global Green USA is in the house...and need all of you to push for the green parts of the stimulus package...to pursue economic revitalization and environmental restoration...they’re one in the same.
10:57 Matt Petersen: I’m going to the swearing in - standing tickets...looking forward to every cold moment for it is a small price to pay for the struggles of so many for so long that have brought us to this place in history...
10:58 Matt Petersen: It reminds us that history is not preordained...it is how we face each crisis...each opportunity...that defines history”
Now cronyism has a job title?
Is this taught at Harvard?
Thanks for zeroing in on that.
“...........Musk demonstrates a fundamental quandary about privatized space flight. Private space advocates and libertarians tout Musk as the next step in space exploration, free from NASAs budgets and bureaucrats. But there is one problem only the price tag has changed (for now). The people paying the bills remain the same. Sure, it costs less. But what of the much touted principle of private space flight. If a small budget is the only payout, then there are possibly ways to achieve the same ends in a revolutionized NASA.
This isnt private space flight. This is government money spent on spaceflight in different places.
Musk and SpaceX dont stand for the principle of privatized space flight, because SpaceX certainly isnt. So once the philosophical goal of private spaceflight isnt in play, and all we are talking about are dollars spent, then a whole range of issues are on the table. As the Examiner is determined to root out, what role does political coziness play in Musk obtaining enormous sums of taxpayer money to pursue his failed green projects and his yet to be fully successful SpaceX project? Should the taxpayers be funding Musks solar and electric car projects?
Either way, Musk now seems to epitomize what has gone wrong with the Obama administrations crony capitalism. Should Romney win the White House, SpaceX shouldnt escape the same scrutiny that Tesla Motors and SolarCity deserve.”
The supposedly “broke” California state government loves Tesla Motors
California Grants Tesla $10 Million To Build The Model X Electric SUV
California regulators on Wednesday approved a $10 million grant to Tesla Motors to help manufacture its next electric car, the Model X sport utility vehicle.
And we know that California has a deep stash of extra taxpayer millions to toss to “environmental” causes. I guess they will continue to reward their friends until someone pulls the plug (it’s all borrowed money now).
Musk is just another rent-seeking parasite peddling “monorails”. He’s slicked up with cool, trek-y technology but with the camoflage removed he’s revealed to be one more Obama connected arm attached to the hand on your wallet.
A LOT of OUR money has flowed to these people:
“............Gore entered the investment world full time by co-founding Generation Investment Management [GIM], a London-based investment firm. He was the type of high-profile partner sought by Goldman Sachs executive David Blood, who had headed Goldmans $325 billion asset management division and was looking to start a new firm. The pair launched GIM in 2004 to back companies focused on sustainability, including clean energy, water scarcity and poverty....
....Gore also found himself to be a sought-after star among elite Silicon Valley investors. In late 2007, he became a senior investment partner at one of the worlds most successful venture capital firms, Kleiner Perkins. He was combining forces with longtime friend John Doerr in a joint mission to spur clean tech.........
As Obama was preparing to take office, it was clear his public agenda supporting clean energy aligned with Gores personal agenda. Obama held a highly publicized meeting with Gore at transition headquarters in Chicago to talk about energy policy. Later, Obama closely echoed several of Gores talking points and his plan for public investment in clean energy. Obama even adopted Gores campaign catchphrase for the effort, Repower America.
This is a matter of urgency and national security, Obama said. We have the opportunity now to create jobs all across this country in all 50 states to repower America, to redesign how we use energy and ..... make us competitive for decades to come even as we save the planet......
Gores investments coincided with the governments largest investment in clean tech. A full 10 percent, estimated at $80 billion to $90 billion, of the 2009 stimulus package was devoted to clean energy.......
....Rep. Fred Upton (R-Mich.), who chairs the Energy and Commerce Committee and is a leading critic of clean tech funding, said Gores portfolio is reflective of a disturbing pattern that those closest to the president have been rewarded with billions of taxpayer dollars .... and benefited from the administrations green bonanza in the rush to spend stimulus cash........”
GIM: Generation Investment Management LLP co-founders: [Al Gore and David Blood [headed Goldmans $325 billion asset management division] LINKS to their advocacy and editorials.
“The $683 million “Climate Solutions Fund” piece of GIM has made direct, minority investments in a number of cleantech firms including SolarCity, Tigo, Ausra, and SMA.” Source Oct. 4, 2012
Obama’s graft makes U.S. Grant’s Tea Pot Dome Scandal look like a penny-ante prank. If we still had authentic history books, this administration would be highlighted as committing the costliest corruption in U.S. history.
Why does a guy worth Billions want the taxpayers to subsidize his various projects?
Inquiring minds want to know.
Same reason we subsidize multi-million dollar corporate farms with the whine about "the struggling family farm", over and over.
It's all about who you know.