Tesla is under federal investigation over company resources being used to build Elon Musk a house

Tesla is now under federal investigation by the DOJ over potentially using company resources to build a mansion for Elon Musk.

This story first emerged last year.

It was reported that Tesla was conducting an internal investigation about misappropriating company resources.

More specifically, Bloomberg reported that Omead Afshar, director of Elon Musk’s office, was about to be fired over an order for a “special glass” for a “secret project.”

The problem is that the special project was rumored to be a house for the CEO and a public company can’t use its resources for a private project.

More recently, the Wall Street Journal released another report alleging that it was known at ‘Project 42’ at Tesla, and the goal was indeed to build a “mansion” for Musk in Austin.

Now, several publications are reporting that the new WSJ report has triggered several investigations, including from Federal investigators from New York and the SEC.

Even if Musk intended to pay for the company resources, Tesla needed to at least disclose the transactions.

As per SEC regulations, publicly traded companies have to disclose transactions above $120,000 with related parties such as directors and executives. The “special glass” was reportedly worth a lot more than $120,000.

Electrek’s Take

This is a weird situation. Elon is the richest man on Earth. He certainly doesn’t need Tesla to build him a house.

I definitely can see him using company resources, like staff like Afshar to order stuff, but it would be a massive oversight not to have this approved through proper channels first.

If true, it could be a sign that the CEO is becoming disconnected from reality and thinks he is above the rules. It’s not like there were no other signs of that lately.