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SolarCity acknowledges receiving subpoena in federal probe

Gov. Andrew M. Cuomo with Lyndon Rive, co-founder

Gov. Andrew M. Cuomo with Lyndon Rive, co-founder and chief executive of SolarCity, after breaking ground Sept. 23, 2014, on a new, 1-million-square-foot site for the future SolarCity GigaFactory facility, which will manufacture solar panels at the RiverBend site in South Buffalo. Photo Credit: Office of the governor / Darren McGee

SolarCity, whose state-funded “gigafactory” is the plum of Gov. Andrew M. Cuomo’s Buffalo Billion initiative, acknowledged Thursday it had received a subpoena from the U.S. Attorney’s office investigating improper lobbying and undisclosed conflicts in state contracts.

In a statement to Newsday, the California-based renewable energy company said, “The U.S. attorney’s office did request information from us to aid in the investigation and we will cooperate fully.”

Spokeswoman Kady Cooper offered that SolarCity “is not the subject or focus of the investigation, as we were not involved in the vendor selection or contracting process” for the 1-million-square-foot plant, which is being built with a $750 million investment from New York state.

On April 29, Cuomo’s office received a subpoena from Southern District U.S. Attorney Preet Bharara as part of a probe of state construction projects, including the Buffalo Billion. The state economic development agency, the State University of New York Polytechnic Institute, the Public Service Commission’s Department of Public Service and the New York State Energy Research & Development Authority also have been subpoenaed.

Among other things, Bharara’s office has been looking into how construction firm LPCiminelli was selected to build the SolarCity plant. LPCiminelli employed politically connected lobbyist Todd Howe as a consultant. Cuomo last month cut off all state contacts with Howe and his former firm, Whiteman Osterman & Hanna.

Another company, Competitive Power Ventures, a Maryland developer building a $900 million power plant in upstate Orange County, also acknowledged receiving a subpoena.

SolarCity is among the largest installers of rooftop solar arrays on Long Island and the U.S. Cooper said construction of the solar-panel plant is “proceeding well, and we are looking forward to working with New York state to accelerate the full-scale production schedule.”

She said it was “premature to speculate on any impact the investigation might have on the project timeline.”

In a financial filing this week, SolarCity laid out the considerable task it has before it in meeting milestones to avoid tens of millions of dollars in payments if it fails to start production on schedule and employ the thousands of workers to whom it has committed.

Under the unusual arrangement, the state is investing $750 million to build and equip the facility, which SolarCity will lease back at $2 a year for the next 10 years. The state will own the plant, while SolarCity and the state will buy the equipment.

SolarCity must reach full production levels six months after construction ends, employ 1,460 in Buffalo and 500 at the plant for five years. It also agreed to employ 5,000 in the state by the 10th anniversary of the plant and spend around $5 billion in the state during that time. If it fails to meet employment milestones, SolarCity must pay the state upward of $41.2 million a year.

SolarCity plans to see the facility built by Sept. 30, according to its financial filing, and begin to equip the plant thereafter.

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