Senator Elizabeth Warren has written to Dr. Robyn Denholm, Tesla’s Board chair, to raise questions about conflicts of interest, use of Tesla resources for Twitter, and other concerns over Elon Musk’s Twitter acquisition. The full text is below. Highlights [footnotes omitted]:
Mr. Musk’s acquisition created unavoidable conflicts of interest. For example, Twitter relies on advertising revenue from automobile companies that are in direct competition with Tesla, including Audi, Chevrolet, Ford, GM, Jeep, and Volkswagen.
As the owner of Twitter, Mr. Musk may decide to run the company to maximize badly-needed revenue, even if that includes great deals for Tesla’s competitors and potential injury to Tesla. Or, perhaps the opposite will occur. As part of his fiduciary duty to Tesla, Mr. Musk may run Twitter to benefit Tesla: for example, he could subtly shift Twitter algorithms so that praise of Tesla products receive greater attention and criticism of Tesla products will be suppressed. He could simply provide free advertising to Tesla. Or Mr. Musk could use other methods to benefit Tesla by making it more difficult for Tesla’s competitors to use Twitter to reach potential customers.
Twitter’s desperation for revenue to cover its new debts could also create conflicts. When Teslanegotiates with Twitter for advertising space, Mr. Musk could decide that he is personally better served if Tesla overpays Twitter for advertising or pays up front to give Twitter access to much-needed cash.
Conflicts of interest emerge in other ways as well. For example, under Mr. Musk’s leadership, Twitter has welcomed hate speech and sharply increased use of racist language, while advancing a broader platform for Nazis, virulent sexism, and climate misinformation.
That association between Tesla’s CEO and the actions of Twitter could have an impact on the Tesla brand and its ability to market its vehicles to its target audience. Mr. Musk and Tesla are inextricably intertwined, and while this close relationship has benefited the company in the past, recent developments may have brought a series of negatives to the forefront.
Senator Warren’s questions include:
What specific guardrails and oversight has the Board put in place to ensure that Mr. Musk is meeting his fiduciary and management responsibilities at Tesla while also running operations at Twitter?
What protections has the Board put in place to protect Tesla from conflicts of interest created by Mr. Musk’s acquisition of Twitter? How are these protections enforced?
Are there any formal or informal agreements between Tesla and Twitter, or between Mr. Musk and Twitter? What is the nature of these agreements?
What is the Board’s evaluation of the consequences of the public’s association of Tesla’s CEO with his decisions at Twitter regarding hate speech, re-platforming Nazis, virulent sexism, climate misinformation, and sharply increased use of racist language?
In order to avoid the apparent conflicts of interest, has the Board received any formal or informal assurances from Mr. Musk that he will shape Twitter’s operations to advance Tesla’s interests?
In order to avoid antitrust violations, what assurances has the Board received from Mr. Musk that he will not shape Twitter’s operations or algorithms to advance Tesla’s interests?
What are the results of the Board’s review of Mr. Musk’s use of Tesla employees to benefit Twitter? Were employee policies violated? Were any Tesla employees terminated or threatened with job loss for refusing to work on non-Tesla related issues? Has the Board taken any actions to ward off any similar employee raids in the future?
Has the Board reviewed Mr. Musk’s activities as Tesla CEO to ensure that Tesla’s resources are not appropriated for the benefit of Twitter? If so, has the Board identified any concerns and taken any action to protect Tesla?