Elon MuskEnlarge Photo
Tesla Model S SedanEnlarge Photo
According to FAA records, the private jet of Tesla CEO and PayPal co-founder Elon Musk has made at least 12 trips to Washington, D.C. since the first of 2009. That in itself isn't a problem; many executives with Musk's resources own private aircraft. The problem is that (a) the operating cost of five of those flights have been covered by Tesla Motors, and (b) it appears that those trips -- and possible others -- were used to make Tesla's case for the $465 million low-interest loan it received from the Department of Energy.
A couple of years ago, this might've been a non-story, but anyone who remembers the contentious congressional hearings involving the CEOs of Chrysler, Ford, and General Motors in the fall of 2008 can easily see the problem. At the time, all three -- Robert Nardelli, Alan Mulally, and Rick Wagoner -- had taken private jets to get to Capitol Hill. When someone brought this to the attention of elected officials, legislators promptly hopped on the righteous zeal bandwagon. Like parents exercising power just because they have it (and also like parents, stalling for time because they don't have easy answers to tough problems), the legislators sent the CEOs back to Detroit, telling them to come back when they'd learned some humility. The three drove back to D.C. in hybrids (but not before GM asked the FAA to stop tracking flights of the company's private jet).
Around the same time, Elon Musk was in Washington speaking to another group of government officials: the folks at the DOE. But although Musk's situation was slightly different from that of his Detroit colleagues, his objective was markedly similar: securing a low-interest loan from the feds. Roughly seven months later, at the beginning of June 2009, Tesla Motors began paying the operating expenses on Musk's jet. Just days after that, on June 15, Musk made yet another trip to the DOE, and within a week, his $475 million loan request was approved. Since Tesla Motors started paying for the jet, the company has funded at least four more trips to D.C.
Now, in Musk's defense, the FAA records don't indicate whether the CEO was on each of those flights. Also, the jet is owned by Musk, not Tesla, so in theory, he can use it as he pleases. And furthermore, Musk was seeking funds from a loan program administered by a government bureau, not making an unsolicited appeal for cash to the U.S. Congress. Unlike the Big Three, he wasn't threatening bankruptcy, he was just responding to an RFP.
On the other hand, Tesla has clearly been paying for the operating expenses of the jet -- expenses that totaled $175,000 in the last six months of 2009 (almost enough to buy two Tesla Roadsters). Given the public thrashing that Nardelli, Mulally, and Wagonner received for similar reasons, and given the timing of Tesla's ask, for Musk not to foresee a problem appears shortsighted at best.