- According to new court filings, Musk directed employees to pressure Thai officials to say nice things about him and his mini-sub, even as they grappled with the deadly rescue mission.
- Musk is facing a defamation lawsuit in the U.S. after calling expert spelunker and diver Vernon Unsworth a "pedo guy" and "child rapist" in public tweets and emails to reporters.
Of all the controversies stirred up by Tesla CEO Elon Musk last year, none was more embarrassing than when he called expert spelunker and diver Vernon Unsworth a "pedo guy" and "child rapist," after Unsworth criticized him for getting involved in a massive effort to rescue 12 boys and their soccer coach from a flooded cave in Thailand.
Musk now faces a defamation lawsuit in the U.S. from Unsworth, who, in a lengthy filing released late Monday, illustrates just how far the CEO is willing to go when he digs in on an issue, even something so far afield from his businesses, Tesla, SpaceX, the Boring Company and Neuralink.
The dispute began in July 2018, after Musk said that his team was developing a mini-submarine — a pod — that could assist in carrying the kids and their coach to safety. Unsworth said in a TV interview at the time that it wouldn't help, which led to Musk's multiple online rants.
What Unsworth now reveals, through deposition transcripts and emails that his lawyers obtained, is that Musk and his affiliates paid private investigators, including one who turned out to be a convicted felon, to try and dig up dirt on the cave rescuer. Additionally, Musk directed his team to pressure foreign officials in Thailand to say nice things about him and his mini-sub, even as they were grappling with what would prove to be a deadly rescue mission.
Last month, Musk asked the court to decide that Unsworth had no viable reason for the defamation case, in part, because he claims he was using slang and didn't really mean Unsworth was a pedophile. Unsworth's legal team, led by L. Lin Wood, says the case should proceed because, among other reasons, Musk made several contradictory and false statements to defend himself under oath.
"Musk's motion is based principally on the antithetical bases that, on the one hand, he was not calling Unsworth a pedophile, while on the other hand, he did not harbor serious doubts as to whether Unsworth was actually a pedophile," Unsworth's attorneys wrote in the filing. "Musk's accusations are false, defamatory, and were published negligently and with actual malice. His motion for summary judgment must be denied."
Musk's attorney, Alex Spiro, said in a statement e-mailed by a PR firm to CNBC: "This case is nothing but a money-grab in which Unsworth has hired an agent and pursued profit, publicity and self-promotion at every turn. The truth of his motivations and actions will come out soon enough."
Wood replied, on Twitter, "Musk lawyer's comments are simply more accusations of a dishonest Elon Musk defense & PR campaign to demean & falsely attack my client. Since the rescue, Mr. Unsworth has received a total of £2,400 for his assistance in connection with two documentaries about Thai Cave Rescue."
As Musk struggles to stabilize his electric vehicle maker's precarious financial position, the lawsuit is yet another distraction for the CEO and Tesla shareholders. Tesla's stock is down 28% this year, as the company suffers from ongoing legal and logistical challenges, and attempts to sell cars in more markets than ever before.
The Unsworth case looks particularly bad for Musk, whose image has taken a beating amid conflicts with employees, investors and regulators in the past two years. It also shows a shocking lapse in judgment.
As Buzzfeed reported, Musk's office previously hired James Howard-Higgins, a private investigator who was a convicted felon and fraudster, to go after Unsworth. Failing to vet the investigator, Musk's office offered to pay him $52,000 and dangled a $10,000 bonus for timely evidence showing the diver was a pedophile.
In testimony, Musk claimed that Howard-Higgins provided him with bad information that led him to believe Unsworth was a pedophile who had married a "child bride." Jared Birchall, the managing director of Musk's family office, contradicted that account, denying that anybody supplied Musk with that detail.
Musk ordered a second investigation, as well. His team hired Cooley LLP in September 2018— the same law firm that represented Elizabeth Holmes in the Theranos civil case — to also look into Unsworth's character.
Unsworth wasn't the only critic to face a backlash from Musk's camp.
In July 2018, even before the stranded boys and their coach were rescued from the flooding caves in Chiang Rai, Musk directed his employees to compel Thai government officials to make complimentary public statements about him and the technology his engineers were developing to aid in the cave rescue.
The BBC had reported on a regional Thai official, who said that Musk's "equipment is technologically sophisticated" but "it doesn't fit with our mission to go in the cave" and it's "not practical."
Musk wasn't satisfied with that response.
"'[W]e need to go all out and make this guy retract his comment," Musk said, according to the filing.
Unsworth's attorneys described how Musk's employees used the Thai Consul in Los Angeles as an intermediary to pressure the Thai officials, including the prime minister, to issue "a statement 'revers[ing] the statement.'"
Doing Musk's bidding were Steve Davis, who is both president of the Boring Company and a SpaceX engineer, and Sam Teller, the director for the office of the CEO of SpaceX, Tesla, Neuralink and the Boring Company. They wanted the Thai governor to recant his critical statement and asked the Prime Minister or governor to say that the mini-sub would have worked and was a technically sound and a practical solution.
Throughout the process, Musk refused to listen to his advisers, who recommended that he apologize to Unsworth, according to the filing.
According to the filing, Sam Teller told Musk that publicity efforts related to the cave rescue and mini-sub, "raised concerns within his team, including worries that 'it makes engineers at our company lose confidence in Elon.'"
He actively fought back against that idea.
"After sleeping on this, I'm not happy about the suggested approach," Musk wrote to Teller, the filing shows. It "would simply have been dismissed as a disingenuous and cowardly attempt to restore the stock price," he said.
Correction: This story has been updated to reflect that Musk hired Cooley in September 2018. A previous version misstated the timing of that hiring.