Many observers of New York State politics are well familiar with US Attorney Preet Bharara’s investigation into Governor Andrew Cuomo’s handling of the Buffalo Billion project. But few are aware of Cuomo’s cozy relationship with billionaire Elon Musk, head of SolarCity, the company that will benefit from the state investment.
Yesterday, on May 25, 2016, New York State’s Public Authority Control Board quietly approved $485 million in state funds for construction of the SolarCity project in Buffalo. The vote by the Board was originally scheduled for last week but was postponed when reporters asked whether the vote would go forward given the ongoing Federal probe.
At the time, Cuomo insisted that the delay in the vote was “just a scheduling issue. Yesterday he said that wanted people to “have total confidence and trust in the integrity of this government” and welcomed the scrutiny by Federal agents.
The $485 million in taxpayer money will fund the remaining work on the SolarCity project, including $50 million in cost overruns for work at the construction site.
Cuomo’s close ties to SolarCity’s Elon Musk extend at least back to 2013. Cuomo did Musk a favor, then by successfully working with the state Legislature enact legislation that helped another Musk company, Telsa Motors.
Musk repaid the favor when Cuomo was running for reelection in 2014. Cuomo, who had lost the Buffalo region in 2010, was in trouble. The Buffalo Billion economic development program was faltering. One of its key companies, Silevo, a solar manufacturer, was faltering. Musk bought out the company and SolarCity assumed its place in the development scheme.
The move spared Cuomo from a high profile disaster-in-the-making. Cuomo won the Buffalo area in the election and retained the governorship.
Suddenly, instead of a $225 million incentive, taxpayers would be paying three times that much to build a much larger facility for billionaire Musk — 1 million square feet, almost four times the original size. The state would technically own the building. SolarCity would pay annual rent of $1 and no property taxes.
Meanwhile SolarCity was named one of only two companies allowed to participate in Cuomo’s K-Solar Program, which is designed to encourage New York State schools to adapt to solar power sources. In January 2016, Cuomo announced the New York Institute for Special Education in the Bronx will be the site of the state’s first solar schools project. The vendor? SolarCity, of course.
In April 2016, the other K-Solar participant, SunEdison, declared bankruptcy. That leaves SolarCity with a monopoly over the State’s K-program.
Then, on May 23, 2016—two days before the State’s approval of the $485 million for Musk— another state agency granted SolarCity the right to bring solar energy to as many as 65 Long Island school districts. The Long Island newspaper Newsday did connect the deal with the imminent approval of another $485 million for SolarCity across the state in Buffalo.
SolarCity has acknowledged that Federal agents have been in contact with the company and says it is cooperating with the investigation.
Is it any wonder that the Feds are taking a look?