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Hello, Welcome to bear offline. I'm at Zetron. Since twenty twenty, Elon Musk has seeded his charitable foundation in innovatively called the Musk Foundation, with billions of dollars of test the stock, which has neted him a multi billion dollar tax break. Yet a massive New York Times investigation by reporters Ryan Mack and Dave vid Farenthald has found that the Musk Foundation has failed to donate the minimum amount of money
required by law to get that tax break. The investigation found that Musk had not hired any staff for the foundation and that its board was made up of Musk and two volunteers, one of whom The Times reports works an average of six minutes a week on a charitable operation with billions of dollars of dry powder, and Musk's donations regularly benefited causes related to his own interests, like a school insert, a SpaceX compound, and a UN program
to help countries find internet for rural schools, where two of them became Starlink customers. And Starlink is, of course, Musk's wireless internet company. And while Elon Musk initially promised to help and I quote fund fixing the water in any house in Flint, Michigan that has water contamination above FDA levels. He would only end up donating about a million dollars to local schools, installing water filters and buying laptops for students. While this is unquestionably a good thing,
he failed to do much more than that. All he did was send the tes Lagoon down there to offer and I'm not kidding rides around the parking lot in his car. Since the middle of twenty nineteen, The Times reports that Musk has done little more for Flint than that. According to The Times, in twenty twenty one, the Musk Foundation fell forty one million dollars short of the minimum required donation, and in twenty twenty two missed it by
an astonishing two hundred and thirty four million dollars. That year, Musk's foundation only gave away the two point twenty five percent of the five percent it was required to from its seven billion dollars in assets. Today, I'm joined by New York Times investigative report to David Tarenthald, who won a Pulitzer Price for his work at The Washington Post investigating our big Web President Donald J. Trump and his dodgy charitable deals. David, thank you so much for joining me.
Hey, it's great to be here.
So, on a very basic level, what makes this Elon Musk charity story so remarkable? What's so different about it?
Well, there's two things that really stand out about the Musk Foundation. One is how big it is. So the Musk Foundation is more than five billion dollars in assets, mostly Tesla stock. That makes it one of the twenty largest foundations in the United States. But the second thing is how small it is in its actions. It's big in its resources and small in its actions. So the Musk Foundation has repeatedly failed to give away just the
bare minimum it's required to by law. And it also when it does give its money away, the money doesn't go very far. By that, I mean often mister Musk uses the money in his foundation to help himself or to help his businesses.
So can you give me example of some of the ways he's using it to help himself.
Well, one of the biggest ones was in twenty twenty one. There's a guy named Jared Isaacman who's a billionaire in Pennsylvania. He charters a rocket from SpaceX to go up into space, and as a way of sort of celebrating or ennobling what he's doing, he says, you know, I'm going to raise two hundred million dollars with this spaceflight for Saint Jude's Children's Research Hospital. He goes up into space, he comes back down and he hasn't raised two hundred million dollars.
They're still short, and so Elon Musk then jumps in to save his customer from failing on this charitable pledge and says, I'll give fifty million dollars. Eventually gives fifty five million dollars, not from his own pocket but from the Musk Foundation. A few weeks later, the same billionaire says, you know what, I'm going to order three more flights from SpaceX. So he goes from being a good SpaceX customer to a really good SpaceX customer, and part of
that process was the Musk Foundation. Another example was the Musk Foundation had never given any money to Cameron County, Texas. That's an area of the very very southern tip of
Texas where Musk has the SpaceX launch site. He never had never given any money down there until March twenty twenty one SpaceX rocket explodes there and rains metal down all over this area, an area, by the way, where he needs lots of regulatory approvals, goodwill, all kinds of help from the people who were the politicians down there. About an hour after the rocket explodes, the Musk Foundation
starts giving to schools to downtown beautification. And the third example I'll bring up are these two schools that mister Musk has started and supported with the Musk Foundation. On paper, these are supposed to be, like every charity, to serve the public. Right, that's the point of the charity. It's not your it's not to serve you. It's not a even if it's got your name on it, it doesn't serve your interest. It serves the public. So there's a school
called ad Astra mister Musk started. There's another school called the Foundation. That's its legal name, the foundation that mister Muskus give it a bunch of money to from the Musk Foundation. So we went to look, Okay, where are these schools, who are they serving how are they serving the public? The answer is that one of them is behind the locked gates of a SpaceX compound in Boca Chica, Texas. You can only get in if you were a SpaceX employee.
And the other one the foundation, it's bought a school a property to turn into a Montessori school that happens to be two minutes away from a huge subdivision mister Musk is building for his own employees outside Basstrop, Texas.
So and which employees for SPICEX for.
Well, he's got a whole complex there that includes SpaceX, but it's mainly boring company employees.
Right.
Both these places are rural areas. He's trying to bring these highly talented, sought after people to a pretty rural area of Texas. You can imagine one of the questions people would ask is, well, where are my kids going to go to school? Right? And so these two charities are helping Musk recruit by building schools to serve his employees.
So, taking a step back on a very basic level, how does it actually work? So has he he's put this stock in escrow?
ISU, what happened was in twenty twenty one, he's facing this giant tax bill. Is he he exercised a bunch of Tesla stock options and he says he owed eleven billion dollars in taxes. He takes five billion dollars of Tesla stock. Now, this is that's not what he paid for the stock. That's what it's appreciated too. He donates it to charity. And now the tax law allows you to take a deduction based on the appreciated value of
the stock. So the deduction to him could have been worth as much as two billion dollars off of his tax bill. Right, he gives that stock to the Musk Foundation. Now it's confusing because it's got his he's in charge of the Musk Foundation. It's got his name on it. But again, the Musk Foundation is by law, a separate entity with its own strictly charitable goals. Even though it sounds like something that he's you know, that's like another sort of pocket of his wallet. It's a separate thing.
So once the money go, once the shares go into the to the Musk Foundation. Now he's given himself a responsibility, he's given himself a job, and that is the IRIS requires foundations to give away five percent of their assets every year. You can imagine why. It's to keep people from just dumping money into their foundation, getting a tax break and never actually helping the world. You have to send five percent of your money out the door to
the real world every year, and he hasn't. He has didn't in twenty twenty one, he didn't in twenty twenty two. In fact, by the end of twenty twenty two, he was two hundred and thirty four million dollars behind the minimum for what this foundation was supposed to have given away.
Right, but as far as the stalt goes, does it sit separate to musk is in a separate holding?
It is legally the property of this foundation now, which means he's still in control of it, but it belongs to the foundation.
Does it have any liquid funds in there?
There's some I think they've sold a few sids. There's a small amount of liquid cash. I think mostly what he does is it sells stock in order to make donations.
When it does so, how does the tax break actually work? How much does he get off of his tax bill as a result of this?
So this is complicated. But what we were told was that in that year they expected that the five billion. So he gives five billion dollars worth of Tesla stock to his charity. The folks we talked to said that they thought the actual break from that, the actual production in his taxes would be thirty seven percent of five
billion dollars, which is about two billion dollars. So there's a lot of other math involved in involving his income and other things, but that was the guess, was two billion dollars off his taxes?
And who gave you this estimate? Just to a cliar.
We talked to a couple of professors of tax law.
Right, So what he gets out of this is just a tax break, but he's not donating enough money, right, actually giving away what he's meant to.
Yeah, it's confusing to think about him and his foundation has separate entities. But in this case, he gives his foundation the five billion dollar. Enough. If he'd taken this five billion dollars worth of Tesla stock and given it to Saint Jude's or UNICEF or some other charity that he didn't control, that would have been the end of the story for him. He's given all the money, he's given these shares away. He takes the tax break, UNICEF
or whoever's then uses the shares for whatever. Right, So now he's like taking off his hat as donor and putting on the hat as the guy who runs the Musk Foundation, and now he has this responsibility, is the head of the Musk Foundation, to start giving this newfound money away. And that's when the five percent minimum matters to him. He has to give five percent of the foundation's assets away to other charities out to actually do good in the world every year.
And he isn't doing this enough.
No, he missed it in twenty twenty one by forty one million dollars, and then in twenty twenty two he missed it by two hundred and thirty four million.
And so what's meant to happen to a regular person? Well, actually, one one quick question. Does he get this tax break every year for holding it? Or is it just the one off? He got a one off?
You know, he gets it based on what he's donated to the foundation in that year.
Okay, and how much is in there right now? Just a week clip, because I know there's a lot of numbers going on.
Yeah, No, it depends on It's depended so much on the rise and fall of Tesla stock. But the last time we got a snapshot was at the end of twenty twenty two, and it was a little bit more than five billion at that point.
So what is meant to happen to him and who is meant to exact justice here?
Well, there's two primary regulators of nonprofits. One is the IRS, the Internal Revenue Service. They're the ones who Okay, so we said at the end of twenty twenty two, he was this foundation was two hundred and thirty four million dollars behind. He has a one year grace period twenty twenty three to give that money away in addition to
the five percent again for twenty twenty three. If he doesn't give a doesn't give the money away after that one year grace period, the foundation faces a thirty percent penalty tax, and if it still doesn't pay then then it faces one hundred percent penalty tax. So it would basically the IRS would confiscate all the money that they were supposed to give A but they did not, So that's what would happen. That's the IRS. The problem with that for me as a reporter is that the IRS
all of that enforcement is private hidden. We can't see it unless somebody sues in tax court or federal court to stop it. So if it happened at the end of twenty twenty three, we don't know about it. The other regulator in most states is the estate attorney general. They also can regulate people who bilate tax laws. I mean, one example that just ended was the New York Attorney General and the National Rifle Association. She had the right to regulate and sue the NRA because it was a
New York nonprofit. The Musk Foundation is a Texas nonprofit. So the authority lands with Ken Paxton, an Attorney General of Texas. Not to say it won't happen, but he's a very political actor and a very political actor who's very friendly to Musk.
Wasn't he also threatening media matters when Musk suit them as well? He seems very much in his pocket. So let's go back to this ad Astra school. What exactly happened there, because it's very bizarre. There is a school inside SpaceX.
Yes, so it began as a school basically for Musk's children. He started it back in California when he and SpaceX were both there.
And it's a nonprofit.
Right, it's a nonprofit. So again from the beginning, it faced this requirement to serve the public and not the private good of its leader. The first class fourteen students, five of whom were Musk's owned children. Later it moves from his house to the SpaceX campus in Hawthorne, California, so it's within the gates of SpaceX. There. We talked to the guy who was the headmaster. He said about half the students were related to SpaceX employees, and Musk's
owned children also went there for a long time. Then in twenty twenty, Musk starts to shift his own residency, his own company center of Gravity, to Texas. So then the Astro school picks up from California, moves to Texas, and from what we can tell, this sort of small amount of openness they had, you know, the fifty percent of students they had who were not employees of SpaceX. They seem to have changed their model where now they're
behind this security gate. I went down there. If you could picture, if you've ever seen pictures of where the SpaceX rocket launch site is in South Texas, it's a very remote area close to the Gulf of Mexico. There's nothing around there, there's no people, there's no other schools, and as you drive down there, there's a little fence on the side of the highway and you see you could see behind it, there's a building, there's some basketball courts. You can see what looks like a school, but there's
no sign for a school. There's nothing that tells you there's a school there. Certainly nothing tells you there's a school there that you might go to if you're a member of the public. The only signs say, you know, keep out, no trespassing, and there's a security guard who you know if you stop for ten seconds, sieted come over and ask what you're doing.
So, do you know how one sends one's kids?
There?
Is it a private school?
Like it is private? It does not have a website, which it used to in California, but it does not now in Texas. We asked Musk and the people who run the other people who are the directors of that school? Yeah, how you get in? Who chooses it? What's the criteria? Can you go if you're not a SpaceX employee? And we did not get answers to any of those questions.
Does it seem to flown any nonprofit guidelines you've seen or is it just classic craven capitalism?
It is a nonprofit that it remains legally a nonprofit. The IRS is given a tax exem status, so if you donate money to it, you can get a tax break for it. But you know, that's the question here is, you know, if this is really a nonprofit, it's truly serving the public and not the private benefit of mister Musk or the private benefit of SpaceX. You know, where's the evidence of that? And that's what we asked them for and didn't get a response.
So in this other school, the foundation, what is that? This feels? See this is the thing with things like this. When people talk about conspiracy theories and the rich doing weird things, they always point to made up stuff versus this. So this other secret school that Musk gave what one hundred million dollars do what if you found there?
Yeah, that was really surprising. So the Musk Foundation, despite the fact that it's very big, doesn't give very many really large donations. And then the exception, one of the exceptions, was this thing called the Foundation and they first the Musk Foundation gave it money in twenty twenty two. You can pull the IRS documents for the foundation to see what it is and what they told the IRS they were going to do when they got tax exempt status and you can see that it's very very closely tied
to Elon Musk. So he's not on the board of directors, but the head of it is his money manager. The two other directors are his accountants. So there are people who are very close to him. And if you look at the what they told the irs they were going to do, and this got some attention at the time last year, it sounds grand. We're going to start a school, We're going to start a secondary school, We're going to
start a university in Austin, Texas. And a lot of people cover that at the time and said, ooh, you knows, mister Musk is he's starting sort of a competitor or the University of Austin is you know, what would an Elon Musk university be like? Is this where he's going to combat you know, the forces of wokeness or you know the other things he talks about a lot. And so my question was just you know, where is this school?
Does it exist? Does it has it done anything? Because it doesn't have a web presence, it doesn't have you know, there's no evidence. You know, if you if you or I said, you know, I want to go to the University of Elon Musk or you know, whatever this is going to be. There's there's no way to find information about it, and so it took a lot of sleuth thing. But here's what we found. The foundation, the entity that the startup charity that is run by Musk's associates. It
has a shell company. The shell company last year bought a former horse farm in Bastrop, Texas a forty acre horse farm. Okay, so maybe that's the college, maybe that's the University of Elon Musk. When you go look at that property, you can see that it actually matches well. You can see two things about it. One is that it's right around the corner from this company town essentially that Musk wants to build for his employees outside Bastrop.
Bastrop is is an extra of a Austin, But where he's building is kind of in the middle of nowhere. There's no schools or development. But he's put a boring company installation, a giant SpaceX warehouse, he's got a there's like a live music venue and a store, and he's putting in one hundred and ten home subdivision. He's going to call it Snailbrook, just sort of like an inside joke. I guess in the world of the boring Company, Oh yeah, I guess, the boring company moves as fast as a snail.
So this is Snailbrook. So but the one thing that he's trying to convince people to move from Austin San Francisco, where you know, wherever people who have choices about what they're going to live, he's going to say, move to this rural part of central Texas. And the thing that that subdivision did not have was a school. And so the foundation, again nominally independent, not supposed to be serving mister Musk's interest, is just supposed to be doing its
own charitable thing. The place they've selected for their first campus is right around the corner from this place where Elon Musk's company needs a school. And if you look, you can find job listings on the internet for another ad Astra school that's being opened, and if you compare it, it's the same place. So they're going to open another
ad Astra school in this building. And that's what really struck me was the huge contrast between what these folks told the irs they were going to be university for Austin, Texas and all they've done so far, which is it looks like build a monassory school for Elon Musk's employees.
So let's talk about the Musk Foundation itself. So by the sounds of it, it's what three people including Elon Musk. Can you just break down the vast corporate structure here? Is this? This bit drove me a little insane.
Yeah, this is really different too. So you know the you remember the company that they keep right and we're talking about the top twenty largest foundations in the United States. That's you know, the Gates Foundation, that's the you know, the George Soros's group, the Walton.
How big of them? How big are those organizations by comparison?
So the most foundation is I mean, the Gates Foundation is a lot bigger. It's in the hundreds of hundreds of billions. But these other groups are it's around the size of other groups like the Walton Family Foundation, things like that. It's in the same ballpark.
And the Walton Families, the Walmart the Walmart.
Yeah, so they and they support charter schools and other things. It's common, although not always, but most of these places have pay roles in the you know, dozens or hundreds of millions of dollars. They have lots of employees figuring out where they should give their money. By contrast, the Musk Foundation, as you said, has no paid employees at all. It's never had paid employees. It has three directors, all of whom are volunteers. There's Elon Musk who says he
works for an hour a week on it. This guy, Jared birch Hall, who is Musk's longtime sort of money manager consiglieri, he also works for an hour a week. And then a woman named Matilda Simon who works for the money manager, and this part was striking. She says she works forer point one hours a week, which is six minutes.
Are they compensated at all?
No, they work for free. So yes, there's no And you know we've asked them, do you have board meetings? You know? What do you you know? How you have this huge responsibility now you have to give out three hundred and fifty million dollars a year. How are you handling that? We know, how much time do you spend on that? We didn't get answers about that.
Did they not answer at all?
They didn't answer it at all?
Okay, but in practice though.
Well, and what we've found was that in some cases when there was something that complicated that needed to be done. I mean, so for instance, I talked about how after the rocket exploded in South Texas, Musk says, I'm going to give thirty million dollars to all these different groups in the area where the rocket exploded. Okay, So now he's made a that's he's taken on sort of a task that either is too complicated for these three volunteers.
He needs somebody to find the school districts in the area, listen to their project ideas, decide how much money each one of them should get. So he deputizes this guy named Igor Kirganov, who, as far as I can tell, was never an employee of the foundation, but he was seeming to act in its stead. So he was He's a professional poker player or a former professional poker player, friend of Musks. So now he's in charge and you
can see him. It was really funny because we got a lot of emails back and forth between him and the school districts that he's giving the Musks Foundations money to. And it's fascinating to see this guy supposedly has you know, hundreds of millions of dollars to give away. But he was extremely detail oriented and like pressing these these schools and the city of Brownsville on the smallest details of the things they were going to use and the smallest
dollar figures. Just to give one example, the city of Brownsville says, Hey, we want to use some of the money that the Musk Foundations giving us to put up Christmas lights for a Christmas We're gonna have a big display in downtown Bronswelle with children. Yeah, and here's the here's the estimate we got from the contractor. You know, this is how much it'll cost to put those lights up. Will you pay for it? And Kirganov says, you know, I want to talk about the color the temperature of
the lights that you've chosen. You've chosen cool white, and I don't believe cool white is appropriate. I think it should be a warmer color. So then they scramble around and find some warmer lights. So it's funny. It was a huge contrast between the sort of general what seemed to be kind of hands off approach that the Foundation normally runs on, and then all of a sudden there was this guy who was extremely hands on in a way that I think people found sort of hard to deal with.
So do you think the reason they're not investing comes down to like mismanagement or is there something else going on here?
You know, it's difficult to tell that. The thing I think you can it's hard to mean to know what his motivations are. The two things I would say is number one, he mister Musk has always said philanthropy is a mistake. You know, he has always said publicly philanthropy is not the way to save the world. My companies do that for me, you know, Tesla, SpaceX, they make a difference in the world is far greater than any philanthropic effort could. He's mocked Bill Gates for believing that
philanthropy is a way to change the world. I mean, that's a fine attitude to have. It's a weird attitude to square with a guy who now has given him, you know, set up a five billion dollar charity. And the other thing is talking to people. My co co reporter Ryan Mack talk to some people who knew mister Musk well from Tesla and SpaceX and other places, and what they said was just that like this is not
something he talks about or thinks about. He's got a lot going on, He's got a lot of a lot of balls in the air, and this was just not something they ever heard him thinking about or really considering.
So could it also be that he just wanted to park some Tesla stock without it being sold, just to be clear, to invest money from that stock, you would have to liquidate shortly or can charities donate stock directly?
Like they can donate stock directly too.
That's so it's so interesting because if he's not talking about it, this feels like just a basic tax dotch just a the lowest possible hanging through because three people does not feel including one of them being in musk, that doesn't feel like enough people to run a small business let alone.
Yeah, three people who work a total of two hours and six minutes a week. Yeah, it is something that, you know, way he's doing it is not the way a lot of other people do it, either, other people of his size of his with charities of his size either higher a big staff, or they just choose one
cause and give all their money to that, you know. So, but he's kind of got them in between where he's not hasn't chosen one cause to sort of, you know, focus all his giving around, and he also hasn't picked out any staff to handle a diffuse kind of giving. So he's sort of in the middle.
So if regulators wake up and go, hey, this is very obviously bad, what would be the process that worked against Musk? What would happen?
I think the thing that would happen would be in an audit from the IRS. The IRS would start setting him letters and say, look, we think that you're you know, we have questions about the way you're operating these charities, either the Musk Foundation or one of the schools. You know, we've we believe you doing this that you know there's a rules to get in the tax code against using your nonprofit for private benefit. We think maybe you're violating that. Tell us more, and in the end they could shut
it down. They could make him pay you know, back, payback basically the tax benefits he got. Those remedies are pretty rare. The IRS is a pretty weak regulator of this space, but that would be how it would work.
Is there any historical regulation of people who have messed up at this scale?
There are not that many foundations of this scale. I actually it's a good point. I'm not aware of the IRS coming down on anybody who is a foundation this big.
It feels like stuff like this just incentivizes more activity like this because this is in public, like this is out there. This is very obvious.
One of the real I mean. So I read a lot about Donald Trump's foundation back in the day, and that is a lot was a lot smaller than this, that he had much much less less money than the Musk Foundation does, but it operated in sort of in a similar way. In that case in the New York Attorney General came down on them. It wasn't the IRS as far as we know. I think the IRS has always been understaffed, and you have to think you have
to remember about them. I've always been told this by IRS veterans is the point of the IRS is not to police. The point of the IRS is to collect money, and so they prioritize the things that bring in the most money, and in nonprofit law often is not that. So they do it, they regulate it, but it's not something they put a lot of energy into. And they've obviously shied away in recent years from fights with rich
people and fights with people who are politically conservative. They've been burned by that in the past, so they would really have to be to gird their loins before taking on somebody like Elon Musk who was obviously both rich and now very conservative.
And would such an effort be, I'm guessing be quite expensive.
Yeah, and that would last a long time. You know. They also have to consider sort of cost benefit. You know, how much money in time would you have to spend on this and how much money would you get back?
So how does this compare You mentioned mister Donald Trump, how does it compare to his situation? How agregious is it in comparison?
They're different in a couple of ways. As I said, the Musk Foundation is much bigger than the Trump Foundation ever was. Trump foundation was like two million dollars at the most. They were similar in that they often use the money. If you look hard enough, they're charitable get ways, you'd realize that they were spending money in ways that helped themselves. Trump was a little more direct about it,
and that's what got him into trouble. He would use it to He would use his foundation to do things like buy a portrait of himself and then hanging on the wall of his golf club. He would use it to pay off legal settlements for his businesses. He would use it to, you know, buy an autographed football helmet for himself. He was using it in a way that was like directly benefiting himself, not and mister Musk is doing it in a way that's a little more oblique.
And I think that matters under the law. It certainly would matter to the irs. They if they want to take on an open and shutcase, the Musk Foundation may not be it. But the thing that I kept so striking to me is the same way that when I was covering the Trump Foundation, you would find things that looked innocuous or donations that looked just like regular charity, and if you pulled on the string hard enough, you'd realize, actually there was a story underneath where it was Trump
helping himself. Then the Musk the same way. I mean, just to give you another example, he gave five million dollars to UNICEF, who you know, the sort of like buy word for an unimpeachable charity, classic charity. Yeah, right, when you when you pull on that a little bit, you realize that he was giving money to a UNISF program that helped countries around the world identify schools that
need connection to the internet. So let's find a schools in Rwanda or Kazakhstand or whatever that aren't connected to the internet, and then help those countries find ways to connect those schools. So effectively, he was investing in a program that created customers for Starlink, his satellite service. So at least two cases the countries that the UNSEF helped, then once they realized where their schools needed connections, they
paid mister Musk's company to connect them. So you know, even there, even in the UNISF, there's there's a line that goes back to his own interests.
That's it's genuinely despicable. But here's another Did you find anything or much about open ai, which is of course the nonprofit wing of the company that makes chat GPT.
Yeah, Musk has had always said that he'd given one hundred million dollars to open up to get started. Obviously he was on the original board. He was one of the co founders of open ai when it was a nonprofit or when it started as a nonprofit. What we found was that he gave about ten million dollars from the Musk Foundation to open Ai at the start, and then he and open Ai agree that he gave about thirty four milk more million dollars out of his own pocket.
So he gave forty four million dollars between September twenty sixteen or six twenty sixteen and twenty twenty apart from the foundation, apart from his own pocket. So that's a lot, but it's a lot less than he had gone around saying for years that he gave.
And that kind of seems to be the theme with a lot of his maybe good donations. He says he'll do one thing and then he does another. Let's talk about Flint, Michigan, where what he promised there in what he actually did.
So there was a period in the Musk Foundation when it had a lot of money, but not billions of dollars in which he this is like twenty sixteen, seventeen, eighteen nineteen. It seemed like the motivator behind a lot of his giving was Twitter, Like he was doing it in response to people who kind of called him out on Twitter. He was becoming more of a Twitter celebrity, and so like mister Beast would say, hey, I'm raising money to plant trees. You know, Elon, will you give
you money? And Elan will say yes, I'll give you a million dollars to plant a million trees. That came from the Musk Foundation. Dave Portnoy, the guy from Barstool Sports, was raising money to help small businesses during COVID. You know, he pushes Musk and Musk responds with the million dollars from the Musk Foundation. One of the more unusual sort of instances of that was there was a girl in Flint, Michigan.
I think she was ten at the time, little Miss Flint, Mariy Copeney, and she had tweeted at Musk like, hey, you know he was thinking of buying Twitter. This is an earlier iteration of him thinking of buying Twitter. You know you have that much money, why don't you use it to buy, you know, supplies for Flint, Michigan where we have this horrible water crisis. And he responds and says, I will pay to fix every home in Flint that
has too much lead in the water. This is at a time, obviously, when they had been this huge epondemic of lead and water pipes and water supply and still kind of a problem today as well. Yes, and so the mayor reaches out to him. The mayor says, actually, you know what we need right now is helping the schools. You know, the schools they need help. You know, the water, you know, water and houses is being handled by the state.
And so he gives about a million dollars in the Musk Foundation to schools in Flint, both to put water filters in the school and to buy laptops for middle schoolers. He also gives a little bit more to the to a back charity that was sort of associated with little Miss Flint now Flint. People that you know, the mayor and other people in the city of Flint see how rich he is and see that he cares about Flint,
and they want more. They ask for more, they said, you know, they sent him this letter that said, you know, you've you know, you have the potential to make such a huge difference in Flint. Can you give us more to do things like replace large scale water infrastructure too.
I mean, just just the one thing, the exact thing that Musk said, and quoting both the article in the Eland Musk himself, he will fund fixing the water in any house in Flint that has water contamination above FDA levels. So just to be clear, he promised the world they were not asking him for too much. This is just what city do.
I think He's followed up by saying like no kidding or something. So yeah, so they ask, okay, you know, we also want can you invest in this fund to help us build small businesses here? Will you move one of your own businesses here? And it seems like out of that came only one, you know, beyond the things I already mentioned. The only additional thing they did was
send a guy from Tesla. He came sort of a guy from Tesla who was thinking about setting up like an operation there, some sort of Tesla building or operation. And so he came and sort of met people at the city hall, gave rides in the Tesla around the city hall parking lot, and that was it. Nothing more came of it, just.
Just around the parking lot.
I don't know why, just around the parking line, but just around the parking lot.
Very bizarre.
And so the mayor said, you know, look, we were happy he gave something. You know, I didn't have to give anything. She said that this was a time when you know, that twenty eighteen, twenty nineteen was a time when they were hearing from sort of a lot of celebrities, you know, well meeting celebrities, but they were sort of being innundated by offers from various celebrit But he said, become Flint had become that much of a cause celebrity people. All these people wanted to help, and so Elon was
one of them, and he gave. You know, it sounds like he gave about a million dollars. They definitely wanted more, but they were happy with what they got.
It's weird because a situation like that, it's good. He gave like money for water filters and laptops of kids, like unquestionably be good. But also he didn't actually fix the problem, didn't actually fix Flint's water problem, and it sounds like that was a problem with celebrities in general.
Then yeah, I mean, I think his problem was his promise to fix the water in the houses was more specific, and he also probably had the capacity to do it more than a lot of the other celebrities that offered. But yes, that is the striking thing is Yes, the city steered him into schools and the mayor said we steered him into schools first, thinking that, you know, we let the state try to fix the houses and if
that didn't work, then Elon could fix those two. So he didn't do the thing that he was going to he said he was going to do in this tweet.
So on a large scale, it seems like a lot of tech people outside of maybe Bill Gates, seem very bad at the philanthropy thing, Like Mark Zuckerberg is the one. I'm thinking of his one hundred million dollars to what's New York schools systems? Why is it the this is a very dumb guy question of it is why is it just having a lot of money doesn't help? How is it that? Is it an organized Is it actually quite difficult to deploy this capital?
I think it is. The answer is yes, that it. It is a very it's hard to give this much money away. You can do it in one of two ways. You can do it the Mackenzie Bezos way. I mean that she's an example of somebody who has a lot of money and has given away a lot of money. But she's not you know, it's she is like dropping it from heaven. You know, there's she's not trying to sort of come in and help you manage your organization.
She doesn't want a grand proposal. She just shows up and gives you a lot of money and then leaves. Other folks who have tried to sort of invest in something over the longer term. You mentioned Mark Zuckerberg. You know, I think it also is just a matter of time, Like it's really really hard to give money away effect, especially for trying to like have a specific outcome in
the world. And maybe these guys are too busy. I mean, the one of the other sort of people who have a foundation about as big as Elons is Larry Page, the guy from Google, and his foundation both fails to make its minimum payouts but also gives its money, all of its money into something called the donor Advised Fund, which is basically like a warehouse for money, and it disappears into there. We don't know where it when or if any of it actually went out into the world.
So it does seem like maybe these folks don't have the time or the you know, the bandwidth to put money into the to like put the attention commensurate with the money they're putting in.
So but just to be clear, Larry Page, co founder for Google. He has he is doing a similar thing.
He is doing a similar well, it's not similar in that I don't have any proof that he's doing things that benefit himself. But he is a huge amount of money. He's failed to meet that goal or that minimum of five percent payout, And what he's doing with his money in some ways is you know, he basically is giving it to a middleman, and then there's no sense of a charitable middleman, the special sort of class of charitable middleman, and we don't know what happens to it after that.
So he is what he's doing is less transparent than what Musk is doing.
Are the other tech people doing similar maybe not saying size, but there are other other philanthropic efforts failing to invest.
And no if you look at the people who were above Musk. So the shortfall that Musk had at the end of twenty twenty two where he was his foundation was two hundred and thirty four million dollars under what it should have given away. There are only three foundations that were worse than that had a bigger shortfall that year, Larry Page's one, the Hewlett Foundation was another, and then the Lily Foundation, tied to the drugmaker ELI. Lilly was
the first. So there are not that many. Out of the hundreds and hundreds of foundations in the US, those four had the biggest shortfalls.
But they still managed to get billions of dollars in tax breaks out of this.
Yeah, this is a field that is not that well policed, as I said, by the IRS or anybody else.
And is it just that expensive and time consumed? Would there be a massive legal fight to try and actually get this thing done?
I mean, Congress could change the laws, or they could give the IRS more money to go after it. I think the Yeah, this has suffered from a sense of neglect and also the IRS is general weakness that they're going to use political capital. They're going to use it on collecting taxes, not fighting nonprofits.
So where do you think this goes from here? Do you think it just continues doing nothing or doing less than the bare minimum?
Well, we will not know the reporting, you know, the filing deadlines are so slow that we won't know until this November whether the Musk Foundation made its goals for twenty twenty three, unless they choose to tell us first. The actual required deadline for them to release something publicly is not till November, and we may know then if the IRS has taken some action against them, but we may never know if they take an action against them. So we're going to keep watching it and see what
else it's done. But there's no expectation that I have that we're going to see any changes anytime soon.
I am with a personal question, does any of this work kind of depress you make you a little cynical because you see these people just getting these massive benefits.
That's a good question. I mean, the reason I so I cover nonprofits, That's that's what I do all the time. And the reason I got into this is because there is such a like obviously, the find nonrofit sector does such amazing work. There's so many incredible things that nonprofits too, but it also is a shield. You know, we give nonprofits legal rights, we give them text breaks, and we also give them this sort of you know, veneer of do gooderism that makes people both in government and outside
government and not want to look any closer. And so some people use that, you know, they use that good will, they use that those privileges as kind of a shield to hide self dealing, to hide, you know, you know, foreign influence, to hide enrichment, embezzlmoun all kinds of things. And so that's the sort of stuff that I do every day, is to try to find out what people are doing beyond behind that kind of screen of of philanthropy or screen of sort of good will. So it
doesn't depress me. It's just that's what I do every day, and I think it makes it for it makes a fascinating beat, this contrast of like the great potential and the great trust and the reality of these of these groups.
Sometimes, David, thank you for joining me.
Thank you.
So what's remarkable about this story to me is that Musk has, for all intents and purposes, received a multi billion dollar tax break in exchange for about a quarter of a billion dollars. That which he has spent has mostly gone to things that directly benefit him, and the few times he's actually spent it well on people that need it, he's gone the Musk row of over promising
and under delivering. It's genuinely despicable to watch him send one hundred million dollars to an barely incorporated school in Texas. Now campus exists. They own some land, and it's very clearly lining up with the other companies. And that's about one hundred times more than they provided to Flint, Michigan, a place where he promised and he received a ton of positive press for fixing their contaminated water system. He didn't do it. He did some stuff, and it's good
that he did something. But you can see how much money this man deploys, and you see how little he's actually done with it. And it's also sickening to watch this unfathomably rich man, this ultra rich ghoul, receive a massive massive return for doing very little and actively conning the nonprofit system. And as David kind of hinted at, there just isn't the regulatory framework or action or political
capital to actually fight a man like Elon Musk. As I've said before, the US government just and Queezer society are just not capable of dealing with billionaires. But there is another side of this story. Musk doesn't want this money spent. Most of this they have a terribly small amount of money, less than a hundred thousand dollars. I believe he doesn't want this money spent anywhere because he wants to hoard that Tesla stock as much as he can.
Putting any downward pressure on Tesla would be a bad idea, and almost all the money that this foundation has is Tesla stock. But this is still a very important story even if nothing changes, because it's another way of showing how empty the legend of Elon Musk really is. He got so much positive press around this foundation. He promised
to fix Flint, Michigan's water system. He got tons of press in twenty eighteen, and he's given away what a million dollars for him, that is something he finds in his pockets or between the couch cushions, probably has more there. He got another bunch of press for giving away eleven point six million Tesla shares to charity, and that's kind of close to what the Wall Street Journal actually wrote.
He didn't give away anything, by the way. He put it in a charity literally with his name on it, or a nonprofit in this case, and as we've heard, he hasn't really spent it. And he even at one point tweeted that he sent this to the UN saying he would spend six billion dollars to fight world hunger, but only only if they tell him how they'd spend it,
which I don't know. There's always a condition with this man, there's always a trick, and I just think it's because he doesn't really care that much, and he'll continue to do stuff like this as long as the media is unable or unwilling to call him out, and indeed, as long as they're willing to buy his bullshit. This man is a liar, He's a billionaire con artist. He's mastered exploiting the law and society and the media to get
even richer. Yet I'm not freaking out too much because every farrenh Old he's won a Pulitzer for work exactly like this with Donald Trump. There is more to this story that I'm sure David will bring out, and his colleague Grime Mack, who worked on the story with him, is one of the most industrious Elon Musk reporters out there. The media is turning on this man, and this work is deep, it's dangerous, and it's going up against the man who has proven to a hostile relationship to the
press and to society. But these stories are so important and as they accumulate, most reality distortion field will fall apart. More it's already going. And I'm not saying this man can be brought down. I don't think there's anything that could truly, quote unquote stop Elon Musk, but we can close the wound that he's opened in society where he's just drinking money from the blood of others. And I really want you to read David's work, and I put a link to it in the show notes of this episode.
It's important you read this. It's important you try and understand exactly how little Elon Musk is done for the world, because it's time to turn on this man. It's time to stop calling him an inventor. He didn't invent anything. It's time to even stop calling him a philanthropist. At the scale he's done things here, it's barely done anything. You should check out David's story. You can find him on Twitter at farenthal that's fahr e nt hold. He's
a great guy. Thank you for listening, Thank you for listening to Better Offline. The editor and composer of the Better Offline theme song is Matasowski. You can check out more of his music and audio projects at Matasowski dot com. M A T T O S O w s Ki dot com. You can email me at easy at better offline dot com or check out better offline dot com to find my newsletter and more links to this podcast. Thank you so much for listening. Better Offline is a
production of cool Zone Media. For more from cool Zone Media, visit our website cool Zonemedia dot com, or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.