(Architectural Digest) - Could Elon Musk, the world’s richest person, be reneging on the promise he made in a 2020 tweet to “own no house”? Reports from the Wall Street Journal say that’s a possibility—and the Tesla CEO could be facing some legal woes as a result.
The United States Attorney for the Southern District of New York and the Securities and Exchange Commission are separately investigating Tesla’s funding for a top secret “Project 42.” According to insiders at the multi-billionaire’s electric vehicle company, the project entailed a glass-walled building near the company’s headquarters just outside Austin, Texas.
Described internally as a house for Musk, one rendering showed a striking glass building resembling Manhattan’s Fifth Avenue Apple store complete with bedrooms, bathrooms, and a kitchen. Another iteration showed a twisted hexagon on waterfront land with the Tesla factory in the background. Yet another interpretation of the building, the plans for which apparently morphed many times, showed a waterfall feature as part of the landscaping and a vehicle that looked a lot like Tesla’s yet-to-be-launched Cybertruck approaching the structure. Amongst people close to the project, a museum was even rumored to be part of the plans.
A purchase of millions of dollars worth of the large-format glass panels used on building façades caught the attention of some employees and sparked an internal investigation by Tesla lawyers and board members into whether or not company funds were misused for the purchase as well as Musk’s level of involvement in the dealings. Per SEC regulations, public companies must disclose transactions over $120,000 in which a related party—Musk, in this case—has a material interest. In addition, investors must be informed about CEO benefits or perks surpassing $10,000 in value.
Some insiders say canceling the order and using the glass for other purposes had been considered, but the WSJ could not confirm delivery of the glass, the project’s status, or the findings of the company’s internal investigation. The SDNY and SEC are both in early stages of investigating the total amount Tesla has spent on the project, its purpose, and Musk’s personal benefits at the company.
In 2018, Musk and Tesla each paid $20 million in penalties to settle a different SEC fraud lawsuit regarding a tweet from Musk that claimed funding was in place to take the company private, misleading investors, per the SEC’s claims.
Currently, Musk rents a house owned by his space exploration company SpaceX in Boca Chica, Texas. The $50,000 prefab tiny house measures in at just about 400 square feet and is made by a housing startup called Boxable. “My primary home is literally a ~$50k house in Boca Chica / Starbase that I rent from SpaceX. It’s kinda awesome though,” Musk tweeted back in 2021.
Musk moved Tesla headquarters from California to Texas a few years ago because of the latter state’s no-corporate-tax policy and its lax laws around corporate regulations. Earlier this year, it was reported that entities connected to the tech tycoon and his associated companies have bought up as much as 6,000 acres of land outside of Austin to build a town to be called Snailbrook. The town, which will reportedly be built near Musk’s tunneling company and SpaceX, will accommodate employees working at both facilities.
By Michelle Duncan and Katie Schultz
September 1, 2023
