Delaware
If Elon Musk and his buddies think Delaware is too strict, we've got a problem
Mother Jones illustration; Patrick Pleul/Pool/AP; Getty
There’s a piece in today’s Wall Street Journal about how billionaires like Elon Musk are now whining about Delaware—which literally has more corporations than people—because it imposes too many rules. Musk is fretting because a Delaware business court ruled that his $50 billion-plus Tesla compensation package, which was approved by a loyalist board, was excessive and therefore unfair to shareholders who had sued to stop it.
As the New York Times reported, the judge deemed the approval process “deeply flawed” and voided Musk’s contract, calling it “the largest potential compensation plan in the history of public markets.”
The Times noted in a follow-up piece that Musk owns about 411 million Tesla shares, worth around $78 billion, and that he’d pledged 238 million shares for personal loans. Borrowing against their vast portfolios, as ProPublica has detailed, is how Musk, Jeff Bezos, Michael Bloomberg, Warren Buffett, and other ludicrously wealthy Americans have managed to legally avoid the lion’s share of income taxes.
Musk publicly lamented the Delaware decision that would dislodge him from the “world’s richest man” perch. He says he’ll seek to reincorporate in Texas, where Space X is headquartered, and where, as my colleague Abby Vesoulis reports, Musk has been flexing his plutocratic power at the expense of longtime residents.
Never incorporate your company in the state of Delaware
— Elon Musk (@elonmusk) January 30, 2024
The Journal points out that Musk isn’t the only major shareholder chafing at Delaware’s rules, noting that Texas is among the newbies vying to attract more corporate registrations and that another contender, Nevada, offers “broad protections for directors and officers in many cases that Delaware wouldn’t, including involving improper personal gain.”
A state going out of its way to protect corporate crooks may shock you—or should—but Musk’s hissy fit is merely the latest skirmish in the race to the bottom for state corporate oversight. Both Vesoulis and Casey Michel, author of the book American Kleptocracy, detailed in our American Oligarchy package how competition between states to attract companies—which tend to overpromise and under-deliver on jobs and economic development—has resulted in a downward spiral that gives unelected billionaires power over local affairs and has made the United States the go-to destination for illicit wealth, foreign and domestic.
Need a tax haven? A place to hide and launder stolen cash? Why bother with the Caymans or the Bahamas when you can get those services in South Dakota—and you don’t even have to relocate there. If you’re looking for other options, check out Alaska, Illinois, Florida, Ohio, Missouri, Nevada, Florida, New Hampshire, Rhode Island, Tennessee, Wyoming, and the original culprit: Delaware.
During the 1910s, Michel writes:
Not only did Delaware’s legislature up the ante on enticements—exempting corporations from taxes and reimbursing their directors for damages incurred by litigious shareholders—but its Chancery Court began producing the most pro-corporate rulings in the country. For good measure, the state also granted anonymity to anyone who wanted to register a company there.
By 1929, 42 percent of state income came from corporate registration fees and taxes. With a population of a tad more than 1 million, Delaware is now home to 1.9 million corporations, including more than 300,000 registered in 2022 alone. Each year, it rakes in some $2 billion in corporate taxes and fees, far more than any other state. The constituents of Delaware lawmakers, “in a very real sense, are companies,” as the University of Cambridge’s Jason Sharman, an expert on money laundering and corporate regulation, has noted.
Now Texas is in the running too? All I can say is, when a few overpaid moguls can move the impunity needle by griping that Delaware isn’t permissive enough, we’ve got a problem.
Thomas Jefferson University is opening a regional campus of its Sidney Kimmel Medical College in Delaware, an effort that will result in the state’s first medical school.
Jefferson beat out three other bidders to establish the four-year program in partnership with the state. The other bidders were the Philadelphia College of Osteopathic Medicine, the consulting firm PriceWaterhouseCoopers and Ponce Health Sciences University in Puerto Rico, Spotlight Delaware reported.
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The inaugural class of 40 medical students will begin instruction in July 2028. Initially, the campus will be based at the University of Delaware in Newark, with Jefferson faculty providing instruction. A permanent home for the campus is still being finalized, the Inquirer reported.
The medical students will receive 18 months of preclinical training on campus before receiving clinical training from healthcare providers in Delaware’s southern counties, where the state’s physician shortage is most deeply felt. That shortage is compounded by an aging population, Delaware officials said.
“Jefferson is committed to being part of the solution to Delaware’s physician shortage,” Jefferson CEO Dr. Joseph Cacchione said in a statement. “We are proud to help build a future where every Delawarean has access to the care they deserve. Jefferson is all in.”
The school’s creation is being supported by $157.4 million from the Centers for Medicare and Medicaid Services.
Delaware is one of three states without a Doctor of Medicine or Doctor of Osteopathic Medicine program. Since the late 1960s, Jefferson and the Philadelphia College of Osteopathic Medicine have reserved seats for Delaware students.
“Sidney Kimmel Medical College has trained generations of physicians for more than 200 years, more than any other medical college in the country,” Said Ibrahim, dean of Sidney Kimmel Medical College, said in a statement. “It is a privilege to bring our mission to Delaware’s patients and communities.”
Jefferson has announced several expansions recently. The university is establishing a full-time doctor of nursing practice-nurse anesthesia program and several online graduate programs at the Lehigh Valley Health Network Center for Healthcare Education in Lehigh County. It also is opening a satellite respiratory therapy lab at Lehigh Valley Hospital-Cedar Crest in Allentown.
Delaware officials said medical students will start their classroom instruction at UD and then do their clinical training at offices and health care systems in Kent and Sussex counties, where the shortage of doctors is most acute.
However, ChristianaCare, which has its own partnership with Jefferson, is not participating. The state’s largest health care system was part of Philadelphia College of Osteopathic Medicine’s unsuccessful bid to operate the school. In a joint statement from ChristianaCare and PCOM, the two organizations expressed disappointment with not being part of the consortium of higher education institutions and healthcare organizations.
“The path forward raises genuine questions about whether the school’s goals can be fully realized without ChristianaCare’s meaningful participation in its clinical training mission,” it said. “The success of any four-year medical program depends not just on an academic institution, but on a true and committed partnership with its clinical partners — one built on shared mission, mutual investment and trust developed over time.”
Students in the first class can get their tuition subsidized, covering all of their education costs, in exchange for an agreement to work in rural Delaware for five years.
Running the medical school is expected to cost Jefferson $78 million over the next five years. The money is from a federal rural health grant through the Rural Health Transformation Program, which congressional Republicans created in the so-called “One Big, Beautiful Bill Act.”
The program will give $50 billion to every state over five years, though exactly the total each will eventually receive is unclear. Half of the money is to be distributed equally to states and the other half is awarded by the Centers for Medicare and Medicaid Services based on a variety of factors.
The state applied for $1 billion late last year to improve health care in Kent and Sussex counties. The Trump administration has so far allocated Delaware $157 million. Delaware is expected to receive at least $500 million over the life of the fund.
Delaware Ohio Housing Growth
A look at the rapid expansion of housing developments in Delaware, Ohio.
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Every few weeks Delaware city approves a new housing development. The city has more than 4,000 housing units in its development pipeline, contributing to the rapid growth in one of the fastest-growing counties in Ohio.
A crash shut down U.S. 42 in Delaware County in both directions June 2.
As of 7 a.m., U.S. 42 was closed from U.S. 23 to Jegs Place near the Delaware Municipal Airport.
It was not immediately clear whether anyone was injured in the crash or when the roadway would open.
This is a developing story and will be updated
Public Safety and Breaking News Reporter Bailey Gallion can be reached at bagallion@dispatch.com.
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