Cuomo’s Billion Dollar ‘boondoggle’ With Elon Musk

ALBANY, New York — Andrew Cuomo’s campaign trail promise to protect New York City from Donald Trump omits one important detail: He not only has a long history with the president, but has dealt closely with Elon Musk too.

As governor, Cuomo greenlit $959 million in state subsidies that benefited a solar panel company controlled by Musk’s family and which was later bought by Tesla, which Musk owns. The spending fell far short of its economic development promises and was directly tied to one of the most sweeping corruption scandals to ever rock a New York governor’s office.

“Big promises that were made, many jobs that were to come that have not materialized and that have only gone to the benefit of Elon Musk. They have benefited from a property tax abatement that allows for him to spend very little money on very valuable property to produce very little jobs,” said state Sen. Zellnor Myrie, one of Cuomo’s Democratic primary opponents. “New Yorkers need to be reminded of the sweetheart deal that was given to Elon Musk by Andrew Cuomo.”

Assemblymember Pat Burke, a Democrat who represents South Buffalo where the solar plant was built, put it more succinctly, calling the episode “a boondoggle.”

Cuomo spokesman Rich Azzopardi disagreed and claimed success, saying, “This particular project turned a radioactive brownfield into a plant that has employed thousands of people."

Over the next four years, mayors across the country will likely be preoccupied with how Trump’s funding cuts impact municipal budgets. If elected New York City mayor, Cuomo will have to contend with Musk’s federal austerity plan as he negotiates a $115 billion municipal budget. And while New York City voters might not closely follow construction projects 450 miles away, Cuomo’s ties to Musk are just another example of how his relationships with the current White House occupants will offer an attack line to opponents seeking to portray him as too simpatico with Trump and a sucker for Musk.

State Sen. Jessica Ramos, another Democrat running for mayor, challenged Cuomo’s success in securing jobs as part of the deal.

“Tesla is a company that came into New York to invest but has actually engaged in some of the more exploitative practices that hurt workers,” Ramos said.

The project originated as part of the “Buffalo Billion,” Cuomo’s 2012 plan to jumpstart the upstate city’s stagnant economy through a series of investments in high-tech businesses. That included $225 million to help construct a green energy manufacturing plant that would make solar panels by companies such as Silevo. That company was quickly bought by SolarCity — which was chaired by Musk, run by his cousin and purchased by Tesla in 2016.

Cuomo highlighted the Musk family’s involvement as a sign that companies with global potential were choosing Western New York. “That isn’t a South Buffalo accent,” he said at a 2014 event, joined by Musk’s South African cousin.

Cuomo promised that the model of corporate welfare he applied to the plant could be successful anywhere in the state.

“You ain’t seen nothing yet,” Cuomo said at the event. “I’m going to take this formula to Rochester and Syracuse and Utica and Albany and all those other cities that have been suffering for too long, and we’re going to replicate the miracle that you did here in Buffalo, and the turnaround of Buffalo is actually going to generate the turnaround of Upstate New York.”

Musk’s involvement also came with promises. His company wanted an even bigger factory, which would create a projected 5,000 jobs in New York and a $5 billion economic boost. The Cuomo administration soon quadrupled the state’s commitment to nearly $1 billion to make it happen.

For several years, Musk made regular pronouncements that solar panel production was on the verge of finally getting started.

“We expect to ramp solar roof production considerably in 2018,” he wrote in a shareholder letter in November 2017.

“We also expect to ramp that up next year at Gigafactory 2 in Buffalo,” Musk said in August 2018.

“We’re ramping up as fast as we possibly can, starting in the next few weeks,” Musk said in October 2019.

Cuomo continued to hold out hope that things would work out. “Tesla is good news — all this is good news," he said in 2019.

He remained a fan of the company: At the start of that year, the governor said he had reached out to Tesla to provide its “outside the box” thinking to add sensors to New York City’s subway cars so they would run more frequently.

“You have a car where you can drive down the Long Island Expressway, you don’t have to touch the steering wheel, you don’t have to touch the brake, because the car can sense all these variables,” Cuomo said during a tangentially-related conference call with reporters. “If that’s possible, why isn’t it possible on a subway car? That’s my question to Mr. Musk and Tesla. They sent people down, and they said you’re right.”

The company declined to participate, but the governor hoped to change their mind.

“Tesla doesn’t do subways,” Cuomo said. “I understand that this is not a normal subway vendor, I understand that you’ve never done this before. So what? Let’s try something new.”

His administration agreed to several amendments to ease the requirements on the solar panel project. The original deal included a stipulation that the company create 1,460 high-tech manufacturing jobs. In updated agreements, that was changed to “manufacturing jobs,” then eventually just “jobs.”

Tesla hit its mandated workforce total at the end of December 2021, just days before a deadline the state had agreed to delay. But most of those jobs weren’t in the high-paying fields of solar technology originally promised — and many appear to be entry-level work focused on self-driving cars.

An audit released by state Comptroller Tom DiNapoli in 2020 found that while the benchmark for economic development spending is $30 in economic benefits for every $1 spent, the project in Buffalo produced 54 cents per $1 of taxpayer spending.

The Cuomo administration “lacked any review of the inherent risks” related to the project, the audit concluded, noting that no one in the administration seemed concerned Tesla “had limited experience” in the high-volume manufacturing of solar panels. The “lack of due diligence raises concerns that, prior to awarding hundreds of millions of dollars, no real scrutiny of these projects is done.”

Tesla has recently stepped up its hiring, though the jobs at the plant still aren’t focused on solar. Numbers obtained by the Buffalo News earlier this week show there are now just over 2,000 employees.

“They met their job goals prior to the pandemic and recent reporting said they were currently exceeding their obligations,” Azzopardi said, adding that rivals "can waste their time trying to distort the facts, but we have more respect for New Yorkers and know they aren't stupid — you can quote me shrugging.”

Tesla did not return a request for comment. The company did not meet its jobs goal prior to the pandemic. Instead, the Cuomo administration agreed to delay a May 2021 deadline when the company said Covid made it too difficult to fulfill its commitment.

Burke, the South Buffalo legislator, said he knows only one person who works at the plant Cuomo and Musk ushered into existence, adding “I know a lot of people in my community.”

He contends the state was misguided in placing its faith in Musk-related businesses and that any continued dealings would be even more misguided, given the tech titan’s fading mystique.

“Continuing to be in business with a company that’s valuation is mostly speculative and is mostly based on some future hope that Musk is bringing — it’s all tied to Musk as this visionary,” Burke said. “People aren't seeing him that way anymore.”

Despite SolarCity’s unfilled expectations, the broken economic promises were eventually overshadowed by corruption issues. A series of sweeping state and federal indictments in 2016 hit 10 individuals with connections to the Cuomo administration — including longtime top aide Joe Percoco — with a series of bid-rigging charges. Those charges included allegations that some of the defendants steered the construction contract for the factory to a developer who also happened to be a top Cuomo donor. Tesla was not accused of any wrongdoing.

The indictments resulted in several convictions. Some have been overturned by the Supreme Court because they didn’t meet the standards needed to convict on corruption charges. But the scandal hasn’t been completely resolved — the Biden-era Department of Justice indicated there were plans to retry the defendants under a new framework for corruption cases.

It’s possible those efforts will soon end. Department of Justice Chief of Staff Chad Mizelle cited the charges as evidence that “the DOJ has lost its way” while defending its attempts to drop the case against New York City Mayor Eric Adams.

All of it leaves open three possible scenarios: The DOJ will decide to continue to pursue new charges, it will announce it’s dropping them, or the matter will be relegated to limbo. If either of the first two scenarios play out in the next few months, that would virtually guarantee the Cuomo era pay-to-play case will reclaim headlines during his mayoral primary sprint — an opportunity his opponents would surely pounce on.

“When we talk about integrity in government and leadership, I think we should examine the breadth of Andrew Cuomo’s record,” Myrie said. “This is a central piece of his record — something that he himself put forward as part of his leadership plan, spending millions of taxpayer dollars and putting it into Elon Musk’s pocket.”