Ex-Tesla employee says "Gigafactory" contractor linked to Mexican drug gang

Last Updated Aug 20, 2018 10:43 AM EDT

A former Tesla employee alleges that the electric car maker's Nevada battery factory had connections to a Mexican drug trafficking ring, and that he was fired for raising the issue with management. 

Former security employee Karl Hansen cites the potential trafficking among a number of problems he said took place at Tesla's so-called Gigafactory, the company's massive production facility in Sparks, Nevada. He also claims Tesla retaliated against workers who reported shady activities, hacked into employees' cell phones and computers, and ignored the theft of $37 million worth of raw materials from the factory.

Tesla denied the allegations in a detailed statement.

"Mr. Hansen's allegations were taken very seriously when he brought them forward," Tesla said. "Some of his claims are outright false. Others could not be corroborated, so we suggested additional investigative steps to try and validate the information he had received second-hand from a single anonymous source. Because we wanted to be sure we got this right, we made numerous attempts to engage further with Mr. Hansen to understand more about what he was claiming and the work that he did in reaching his conclusions. He rejected each of those attempts, and to date has refused to speak with the company further. It seems strange that Mr. Hansen would claim that he is concerned about something happening within the company, but then refuse to engage with the company to discuss the information that he believes he has."

Stuart Meissner, a lawyer for Hansen, said his client made the allegations on August 9 in a "whistleblower" complaint with the Securities and Exchange Commission. Hansen is the second ex-Tesla employee to submit a whistleblower tip to the agency. Former Tesla technician Martin Tripp, who is in a legal battle with the company, has also filed a complaint with the securities regulator. 

Hansen was employed in Tesla's "internal security department and its investigations division," according to Meissner and is retired from the U.S. Army Special Investigations Command.    

Meissner, who released a summary of Hansen's complaint on Thursday, represents both men. 

Among Hansen's allegations:

  • While at Tesla, he claims to have "corroborated connections" between an employee of a Tesla subcontractor and members of a Mexican drug cartel. An initial release from Meissner cited "several employees" who were allegedly involved with trafficking, instead of a single employee of a subcontractor. 

  • The Drug Enforcement Administration and the sheriff's office of Storey County, where the factory is located, allegedly notified Tesla on May 24 that a Tesla subcontractor "may be a participant in a narcotics trafficking ring involving the sale of significant quantities of cocaine and possibly crystal methamphetamine at the Gigafactory on behalf of a Mexican drug cartel from Sonora Mexico." 

  • The Tesla subcontractor alleged to have links with drug dealer kept working at Tesla at least until Hansen was fired on July 16. According to Meissner, "everyone who worked in the Gigafactory was subject to termination by Tesla, no matter who employed them."

The DEA, however, told BuzzFeed that it "does not notify non-law enforcement entities of ongoing or pending investigations." The Storey County sheriff would not confirm or deny the existence of an investigation, but told the outlet the office had no record of being contacted by Hansen.

In his lawyer's statement, Hansen also claims that $37 million worth of materials were stolen from Tesla between January and June of this year, that he was told not to report the theft and that a Tesla employee who did so was fired. He also claims that Tesla wiretapped employees and installed "specialized router equipment" to monitor their cell phone conversations.

"I never expected that my employment with such a major public company would lead to uncovering such issues, and am disturbed by Tesla's highly unusual response to those like me who investigated them," Hansen said in a statement. "I am also very disturbed by Tesla's failure to respect the privacy of its own employees."

Hansen claims he was fired in retaliation for reporting misdeeds, and says in the release he went public to "encourage other whistleblowers to come forward."

SEC investigations are typically conducted in private.

"This is somewhat of an unusual circumstance in that the client specifically requested that I make public not only his name but his attachment to the SEC," Meissner told CBS MoneyWatch.

"These are material events, these are not minor events, from a public company, and part of a company's responsibility is to give material information to the shareholders," he said.

This article has been updated. Meissner's initial statement said several employees were allegedly connected to drug trafficking; the updated statement notes just one employee of a Tesla contractor.