22 August 2018

Tesla employee blows whistle on alleged spying, drugs and non-disclosure

Employee alleges Elon Musk had surveillance equipment installed, and says Tesla also did not disclose drugs and theft cases to investors.

An employee fired from Tesla Inc’s Nevada battery factory has filed a whistleblower complaint with the US Securities and Exchange Commission (SEC), accusing the company of spying on employees and failing to act after learning that a Mexican cartel may be dealing drugs inside the plant.

Spying claim

Karl Hansen, a former member of Tesla’s internal investigations team, filed a tips, complaints and referrals form to the SEC about the Gigafactory, his attorney Stuart Meissner explained in a news release. Mr Hansen alleged that Tesla, at the direction of ceo Elon Musk, installed surveillance equipment at the Gigafactory outside Reno, Nevada to eavesdrop on the personal cellphones of employees while at work, according to Meissner. He also claims Tesla did not disclose to investors that thieves stole $37 million in copper and other raw materials during the first half of 2018, and failed to disclose that it received written notice from the US drug enforcement administration about a Tesla employee possibly engaged in selling cocaine and crystal methamphetamine from the Nevada factory on behalf of a Mexican drug cartel. Mr Hansen claims he was subject to retaliation and fired on July 16 after raising the issues internally.

Second whistleblowing claim

Tesla said it took the allegations that Hansen brought to the electric car maker seriously and investigated, but stated ‘some of his claims are outright false. Others could not be corroborated.’ The SEC has not commented. Mr Hansen is the second Tesla employee to file a whistleblower complaint with the SEC. Martin Tripp, another former Gigafactory worker represented by Mr Meissner, told the SEC that Tesla inflated the number of Model 3s being produced each week, that it used punctured batteries in its vehicles, and that it reused scrapped parts in vehicles ‘without regard to safety.’ Tesla denies those claims. Whistleblowers can receive 10 percent to 30 percent of penalties the SEC collects.