Nevada State Treasurer Demands Audit Of Faraday Future AND Tesla

2 weeks ago by Eric Loveday 36

Tesla Gigafactory Progress From January

Nevada State Treasurer Dan Schwartz is calling up the Governor’s Office of Economic Development (GOED) to conduct an audit of both Tesla and Faraday Future.

As This Is Reno reports, Schwartz is seeking “more information on the projects GOED funds which have received substantial tax credits and financial assistance from Nevada taxpayers, including Faraday Future and Tesla. Since 2014, the powers granted to GOED have continued to grow.”

Faraday Future’s North Las Vegas site modelling

Schwartz is insisting that the audit be completed by August 1, 2017. He adds:

“The … audit should examine all documents, confidential or not, which were used by GOED in vetting the projects under (state laws) and the documentation which was provided to GOED which ultimately led to the approval of all projects of these statutes.”

“The audit will look into job creation data, amount of money invested in the state by everyone involved with the projects, the process that GOED used to qualify the project, and the rationale for what related documentation is deemed ‘confidential. It is my hope that this audit provides greater transparency for these large scale projects.”

It’s not clear why Tesla is being thrown into this (we are pretty sure the Gigafactory is a real project at this point), though the automaker did receive the largest amount of transferable tax credits ever earned by one company in Nevada. However, Schwartz’ feelings toward Faraday Future are quite obvious. Schwartz refers to Faraday as a “ponzi scheme.”

GOED Executive Director Steve Hill says that he will comply with the audit request. Hill stated:

“We have spoken with the Administrator of the Division of Internal Audits and have expressed our commitment to fully cooperate with any audit the Division determines appropriate.”

Source: This Is Reno

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39 responses to "Nevada State Treasurer Demands Audit Of Faraday Future AND Tesla"

  1. Bonaire says:

    A financial guy in a leadership position doing fiduciary actions is a good thing. This is rare today.

    1. ijonjack says:

      THIS GUY IS EITHER AN “IDIOT” OR GETTING $$$$ PAID OFF BY SPECIAL INTEREST GROUPS. The State only gives Tax Breaks As The Companies spend monies to bring forth Projects as promised .THE STATE IS 0UT ZER0 DOLLARS IN ANY CASE.

    2. mx says:

      Why you DON’T Do Business in a Repub State.

      Political Attacks on Business.

      1. realistic says:

        With the project being expertly sponsored and driven through the legislature by a Republican Governor…

    3. Gasbag says:

      How much public money is this ignorant attention seeking clown trying to waste on this wild goose chase? Is he trying to distract from his own mis-deeds?

      Does ignoramus not know that Tesla is audited every quarter for compliance and that the results are publicly available via Scribd? How much more transparent can it be?

    4. Nix says:

      If this is just about fiscal responsibility, why is he just auditing these two, and not every single company that has been granted tax breaks by the state?

      This has nothing to do with fiscal responsibility. This is political grandstanding.

      1. Pushmi-Pullyu says:

        Hmmm, don’t agree at all. Is there any other project for which the State is spending millions to build a highway extension, and more money for what surely will be a robust electrical supply using high tension electrical lines? And what about the water supply; will the State be providing that, or will Tesla drill its own wells on-site?

        I have great admiration for the way Dan Schwartz is standing up to his own boss, the Nevada governor, in demanding an audit of Faraday Future, despite the Governor obstinately and foolishly continuing to promote a project which is at least an embarrassing failure, if not an outright scam.

        If Dan also has to do an audit of Gigafactory 1 for political reasons, to avoid the appearance of favoritism, then so be it. I doubt Tesla has anything to hide, so what’s the worry here?

        1. Pushmi-Pullyu says:

          A couple of citations:

          “Nevada state treasurer ratchets up criticism of governor over Faraday”

          http://www.reviewjournal.com/news/politics-and-government/nevada/nevada-state-treasurer-ratchets-criticism-governor-over-faraday

          “Governor fires back at Treasurer over Faraday Future”

          http://news3lv.com/news/local/faraday-folo

          1. Ron M says:

            That article didn’t mention Tesla at all.

      2. wavelet says:

        Re-read the statement carefully:
        “more information on the projects GOED funds which have received substantial tax credits and financial assistance from Nevada taxpayers, INCLUDING Faraday Future and Tesla” (my emphasis).
        It’s not just those two, it’s any project which got substantial credits. I expect those two got mentioned by name because they were very public and/or large (and it’s possible he isn’t concerned about Tesla, but didn’t want to single out just one company by name).

  2. Four Electrics says:

    Sounds like someone is running for higher office.

    In fairness, though, the Gigafactory can be both a real project and net-unprofitable for the state. A quick look through satellite imagery of the area reveals many other buildings of comparable size, and I doubt their owners received the same sweetheart deal.

    1. przemo_li says:

      LOL.

      That thing they build out there is on the record to be second biggest building in the world. Not just Nevada, not mere USA, but whole world.

      I’m sure that owners of those 100 other buildings just 10 inches shorter are humming with envy for Tesla negotiation skills 😛

      1. ijonjack says:

        I “Understand” that once completed it will be the Biggest on the planet..

      2. mx says:

        Those other buildings are there BECAUSE of Tesla.
        Yeah, they’re not crying for an audit, they’re thanking Tesla for the Profit.

    2. Gasbag says:

      Before phase II started they were of comparable footprint but not comparable size. Those are warehouses which employ fewer than 200 people each. Their footprints are about what their square footage is. GF1 is three levels high and already employs more than all surrounding buildings. Moreover the publicly available audits prove TSLA is in full compliance with the agreements.

      Nevada unemployment was over 40% higher when they signed the agreement for GF1. Good job Nevada.

    3. Get Real says:

      Lmfao, another Tesla article, another fact-free FUD conman comment by 4E!

      4E’s shorts must be getting tight as Tesla gets close to Model 3 production.

    4. Nix says:

      Why do you ASSume that other properties also didn’t get any number of Nevada tax incentives? Do you mistakenly believe that Nevada is giving tax incentives to just these two companies?

      Or are you just saying that Elon Musk is a better negotiator than other surrounding companies, so you are crying and whining about Tesla’s business prowess?

    5. Pushmi-Pullyu says:

      “Four Electrics” caused FUD to appear on my screen:

      “A quick look through satellite imagery of the area reveals many other buildings of comparable size…”

      A quick reflection on the amount of anti-Tesla B.S. you post reveals that you’re adding to the pile. No need to waste time looking at Google satellite images.

      But go ahead, 4E, prove me wrong: Post a link to a Google image of just one of these mythical buildings in the area!

    6. Ron M says:

      Four Electric l looked for the Tesla Gigafactory in satellite maps where is it relation to the Tahoe Reno Industrial Park I found that but only seen Walmart Distribution Center and a James Hardic Product Center .
      Appreciate it thanks

  3. ffbj says:

    Tesla is going through another round of funding as a number here, predicted. To the tune $1.5 billion.

    I think lumping Tesla together with FF is NV way of showing they don’t play favorites.
    Also to focus on the agreement concerning hiring of local Nevadans, which labor is disputing.

    1. Anon says:

      This is old news. Tesla has already passed this inspection and was awarded the tax credits from Nevada for meeting the terms of their agreement. 🙂

    2. Nix says:

      Tesla crushed the local hiring requirements, with 90% of employees being Nevada residents (according to the last official audit).

    3. Brian says:

      $1.15B, not 1.5

  4. MikeG says:

    Agreed. Nothing to get your panties in a twist over the audit of Tesla. FF, well that’s another matter.

  5. DangerHV says:

    My concern is not with the results of these audits or the terms. Tesla seems to be playing by the rules, anyway. My concern is if this is simply a ‘coincidence’ that these audits are both aimed at EV companies. Are there no other deals made that are being scrutinized in other industries?

    1. Pushmi-Pullyu says:

      I’m guessing this is a result of the high-profile dispute between the Nevada Governor and the Nevada State Treasurer over Faraday Failure Future.

      Yeah, probably it’s due to politics, but I doubt Dan Schwartz is singling out “green tech” manufacturers. My guess is he’s throwing in an audit of Gigafactory 1 to avoid the appearance of a bias against FF.

  6. realistic says:

    Schwartz is no political hack schlub. It’s rare to find a guy of his caliber deciding to enter elective office. He has a LOT of varied financial experience and a global education.

    I didn’t even realize who this article was about until I remebered I had to read one of his books for an online class. It costs a damned fortune but if you’re close to a recent or current MBA I recommend you borrow a copy/file:
    The Future of Finance: How Private Equity and Venture Capital Will Shape the Global Economy.

    One of his key points involved the responsibility of large investors to insure that recipients of the investment behaved themselves. Not such a bad thing…

    The point that I see being made is that the GOED is growing staff like a weed with rubber-stamp spending approval and it needs a look. The “planning documents” posted on line by GOED are largely out of date, with the “Living Document Timeline” last updated in 2014.

    Yes, there are surely other projects that need a look, but Schwartz has had the guts to poke at the Guv (from the same party, BTW) about the stadium as well.

    There is nothing wrong with this. Clearly all the anguished onlookers here have never been in a divisional or corporate quarterly project review of any significance. Asking funding recipients to permit access to appropriate documents is a cakewalk.

    1. Pushmi-Pullyu says:

      Yeah, it looks to me like Dan Schwartz is one State official who actually takes seriously the idea of being a public servant, instead of using his position to increase his own power and wealth.

      I think Dan deserves to be praised, not vilified!

      1. realistic says:

        Might I also add that based on my own review I don’t think Tesla would have anything to worry about.

        I cringe to add this but it would be a hell of a public announcement to stoke investors following a positive vote from the Treasurer. Really.

    2. Gasbag says:

      Out of date? Tesla is audited quarterly per the agreement. The results are publicly available via scribd. Someone should inform this guy so he doesn’t embarass himself.

  7. Pushmi-Pullyu says:

    I’m very glad indeed to see Nevada State Treasurer Dan Schwartz keeping a close eye on the State’s deal with Faraday Failure Future, because the Nevada Governor’s office is still promoting this disaster. Mr. Schwartz seems to be the lone champion of fiscal responsibility here.

    Why is Mr. Schwartz also demanding an audit of Tesla? Perhaps it’s merely to avoid charges of favoritism. At any rate, speaking as a Tesla fan, I’m confident that an audit of Tesla’s Gigafactory 1 project will show everything is on the up-and-up.

  8. Vexar says:

    My guess is the State of Nevada is somehow running a deficit. Why waste the resources on a heavy double-audit without motivation? Or, the Treasurer plans on running for an elected position soon and wants the press.

    1. realistic says:

      While I am a fan of Schwartz, one does not succeed in politics without (a) great ambition and (b) the ambush instincts of a mongoose. If Sandoval is vulnerable then you could be right that Schwartz expects he will inevitably find something, somewhere(although I don’t think Tesla should have concerns).

      I can’t imagine the stadium isn’t a richer target.

    2. Ron M says:

      Wouldn’t the Treasurer and Govenor both be Republican.

  9. Brett says:

    Great, audit away. This is going to raise some serious red flags for FF, and Tesla, which is already subject to SEC level audit requirements, will just ship a copy of the working papers to the GOED.

    Pretty sure this action is being done because they’re worried about fraud at FF, but don’t have any documentation to initiate an investigation yet.

  10. Terawatt says:

    Funny how everyone seems to think only the recipients could have reason to fear auditing. The people who granted the credits are at least as much the targets. Did they do so with due diligence? Have they followed up and verified terms are being met?

    This is good. Auditing costs little and can greatly improve the quality of the process. It should be applauded, not assumed to be an attack on the recipients. Obviously if they haven’t kept their promises they could get in trouble, but that’s a good thing too. If on the other hand they got too good a deal it’s the people who gave them that who will be in trouble.

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