Nevada’s treasury secretary announced Friday a move to audit the government program responsible for giving Tesla millions of dollars in tax credits to offset the cost of the company’s massive gigafactory.
Dan Schwartz, who has served as the state’s treasurer since January, 2015, said it will audit the Nevada Governor’s Office of Economic Development (GOED) program, which led the negotiations of the taxpayer-backed package for Tesla’s Gigafactory 1 in northern Nevada. One of the company’s primary competitors, Faraday, also received backing for its factory in northern Las Vegas.
The audit will acquire “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,” Schwartz told reporters.
GOED faced seething criticism last December when it was revealed through public records requests that tax credits earned by Tesla in 2016 were sold to the MGM Grand in Las Vegas for $20 million. The credits were transferable, meaning Tesla could sell them to a third party for money.
It is the largest amount of transferable tax credits ever raked in by one company in Nevada, according to GOED’s Executive Director Steve Hill. He said Tesla can sell the credits, so long as the company receives equal or lesser value from the transaction.
Schwartz is not so easily swayed.
“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,” he said.
The audit is unlikely to slow down Tesla’s actions in Nevada. The company began mass producing lithium ion batteries at its $5 billion factory in January.
Elon Musk, who chairs the company, will initially produce battery cells for Tesla’s Powerwall 2 and Powerpack 2 products. The cells will be used to power Tesla’s electricity storage products and its Model 3.
It is expected to employ more than 6,500 workers and create between 20,000 and 30,000 additional jobs in the surrounding regions, according to the company. Tesla received $1.4 billion in taxpayer support from Nevada in 2014 to build the factory.
Schwarz intends on determining whether Tesla’s projections are for real or merely a “Potemkin Village” meant to place a pretty face on taxpayer-bleeding boondoggle.
“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,’” he said. “It is my hope that this audit provides greater transparency for these large-scale projects.”
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