Is New York secretly auditing tech programs?

Elon Musk.
Elon Musk.
FREEDOMPIC/Shutterstock
Elon Musk.

Is New York secretly auditing tech programs?

Vanity Fair included a mysterious threat in its Tesla takedown.
August 27, 2019

Elon Musk and his SolarCity factory in Buffalo came under fire in a Vanity Fair article on Sunday suggesting that the Tesla CEO has fallen short on promises to create an economy-reviving, job-creating success story for Western New York. And an ominous, ambiguous threat at the end of the article hints that the state has had it up to here.

In the exhaustive piece, Vanity Fair contributing editor Bethany McLean details how New York’s $750 million investment in SolarCity has yet to create the thousands of jobs it promised to bring to the state. In 2014, Tesla got a 10-year lease on the SolarCity facility for $1 a year and three-quarters of a billion dollars in state investments in exchange for a commitment to employ at least 1,460 people in high-tech jobs and another 2,000 in other jobs relating to the sale and installation of the company’s solar panels, as well as to attract another 1,440 support jobs to New York. Additionally, Tesla promised to spend $5 billion in New York in the following 10 years.

In the piece, McLean reports that state officials later “watered down” those requirements so that any job would count toward the high-tech and sale and installation benchmarks, and changed a requirement that 900 jobs be created at the factory within two years to just 500 jobs. In 2016, state Comptroller Thomas DiNapoli addressed a similar issue in a report on the Excelsior Jobs Program, finding that economic development staff often reduced job creation requirements when it appeared companies were falling short of goals. 

Toward the end of the article, McLean made mention of one way the state was attempting to have some oversight. “Officials in New York … appear to be taking belated steps to document what is really happening in Buffalo,” the article read. “Last spring, the state announced that it was auditing all of its high-tech programs, with a focus on Tesla.”

Naturally, that statement piqued our interest. What is this audit? And what kinds of “high-tech programs” are being audited? As it turns out, few seem to know – and those who do aren’t willing to speak to it. Staff members at good-government groups including Reinvent Albany and the Empire Center for Public Policy did not immediately recognize the audit. McLean could not be reached for comment, and Gov. Andrew Cuomo’s office did not respond to requests for comment on Tuesday.

A spokeswoman for DiNapoli’s office did, however, confirm that this audit exists and is in process – but refused to offer more details or explain what “high-tech programs” refers to. “We can confirm that an audit is underway however, it is our general policy not to comment about the specifics of (the audit) while it is in process,” spokeswoman Tania Lopez wrote in an email. 

Though the Vanity Fair article said that this audit was announced last spring, City & State was not able to locate a public announcement. Alex Camarda, senior policy adviser at Reinvent Albany, speculated that it could have something to do with whether or not Tesla was fulfilling its jobs and spending commitments to the state. As the article notes, if Tesla fails to employ 1,460 people in Buffalo by April, the company will be forced to start paying an annual fine of $41.2 million. 

Lopez confirmed that in general, the comptroller’s office regularly audits compliance for companies that have an agreement with the state. Still, it’s not clear that the audit mentioned in Vanity Fair has anything to do with that kind of compliance. For now we’ll have to wait to find out whether Musk – or any other “high-tech” leaders – have anything to worry about from the state.

Annie McDonough
Annie McDonough
is a tech and policy reporter at City & State.
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