A county environmental regulator has fined Elon Musk’s tunneling company the Boring Company nearly $500,000 after the company spilled “drilling fluids” into wells around Las Vegas, causing “significant damage” to the county’s broader infrastructure, according to a violation notice sent to the company last week.
The Clark County Water Reclamation District (CCWRD) says Boring Company workers refused to stop pumping drilling fluids this summer when inspectors arrived at the project site near downtown and told them to stop, according to the violation. The next day, Boring apparently “pretended to be in compliance,” only to continue dumping sewage after a company manager “assumed neighborhood inspectors had left the property,” according to the termination letter. CCWRD says its crews eventually had to clean up 12 cubic yards of “drilling mud, drilling debris and miscellaneous solid waste” from one of the wastewater treatment plants due to Boring’s discharge at two project sites, according to the violation notice. Fortune through a records request.
The drilling fluids and dirt referenced appear to be related to a toxic fluid that accumulates at the bottom of tunnels when Boring equipment drills into earth and rock, a fluid that may contain a variety of chemicals, including MasterRoc AGA 41S. Many Boring workers suffered burns from these chemicals when their skin was directly exposed to them.
The new fines and charges are the latest controversy to erupt around the Boring Company. The company has been repeatedly accused by workers and regulators of not following safety protocols or regulations as it builds a network of tunnels below Las Vegas that the company says will be an “underground highway” for Tesla to travel through.
The Clark County Water Agency said the Boring Company’s actions violated federal laws and regulations and notified Boring that it has fined Boring $493,297.08, including $131,297.08 for the district’s costs to remediate the spill. CCWRD said the fine was imposed “because of the egregious nature of the violations, the extensive damage to the District’s infrastructure, the District’s emergency resources expended in response to the violations, and [Boring Company’s] acknowledgment of liability for violations,” the breach notification said. According to other documents it received Fortune in a separate records request.
Violation records show that several Boring Company executives attended a CCWRD meeting in late September and that the Boring Company admitted liability and agreed not to expand Boring’s operations to new drilling sites “until certain conditions are met.”
The Boring Company did not respond to multiple requests for comment. A spokeswoman for the Las Vegas Convention and Visitors Bureau, which pays Boring to operate the tunnel system under the convention center, said the agency was still reviewing the documents and declined to comment further.
CCWRD says the agency began looking into the landfills after an anonymous complaint filed Aug. 12. was sent to the state’s environmental regulator. CCWRD inspectors went to the project site and confirmed that drilling fluids and dirt were being “actively” discharged into two on-site treatment facilities (covered pipe connectors) that connect as a sewer and two canals. damage to the District’s infrastructure” as a result, the documents state. CCWRD says “TBC employees refused” to stop pouring fluids when inspectors told them to stop.
The next day, August 14, the inspectors returned and again ordered Boring Company workers to stop the release. CCWRD says Boring’s chief, Filippo Fazzino, “feigned compliance” and removed the connections to the on-site treatment plant, but regulators say he immediately replaced them “after he believed district inspectors had left the property,” according to a cease and desist letter sent to Boring later that day.
“It should be noted that Mr. Fazzino attempted to downplay the extent of the dumping by falsely stating that the dumping had only begun the night before, contrary to records from district inspections the night before. TBC’s brazen refusal to stop its illegal dumping after being caught in the act, coupled with TBC’s false statements to TBC’s news county inspectors,” the cease and desist letter read.
Fazzino did not respond to multiple requests for comment.
In a letter Boring sent to CCWRD on Aug. 15, the day after the second inspection, Boring’s director of legal affairs acknowledged that “water was improperly released into the sewer system,” that it was investigating the matter, and that the company had taken some actions as a result, including physically disconnecting certain sewage connections and sealing the tunnels.
One current Boring Company employee who spoke with Fortune spoke on condition of anonymity for fear of reprisals, confirmed that while county rules require the company to pre-treat water and liquids before disposal, Boring Co. workers pumped it directly into the sewage system without pre-treating it.
Founded in 2017, the Boring Company is a lower-profile venture in Musk’s empire of moonshots, though no less ambitious than his rocket startup SpaceX or brain chip operation Neuralink. Boring’s idea is to eliminate traffic by digging tunnels under cities that could fly passengers in autonomous Teslas. According to PitchBook, Boring has raised more than $900 million. USD funding from some of Silicon Valley’s top investment firms, such as Sequoia Capital, though it has struggled with delays and worker safety incidents.
Boring has made the most progress in Nevada, where a 4-mile stretch under the Las Vegas Convention Center is currently the only working example of Musk’s vision. However, the company has had several brushes with regulators in the state. In September, the Nevada Office of Water Pollution Control fined the company nearly $250,000 for nearly 800 environmental violations over the past two years, including dumping untreated groundwater into public roads and failing to notify authorities, ProPublica first reported. Boring previously settled with the regulator in 2022 over similar violations.
in 2023 in June The Boring Co., while searching for an irrigation pipe, exposed the foundations of two pillars that support the elevated Las Vegas monorail. Fortune reported in 2024 in April Regulators ordered the active monorail to temporarily shut down for a day, and Boring workers uncovered the base of another column a few months later. Clark County issued three violations related to two incidents, accusing Boring Co. working without permission and causing possible danger. (The Boring Company did not respond to a request for comment at the time. LVCVA said that “TBC was repairing a broken irrigation line and inadvertently exposed the Monorail’s foundation, and we took appropriate steps to correct this, including suspending operations for one day.”)
Boring also dealt with investigations by the Nevada Occupational Safety and Health Administration, including eight citations in 2023 that Boring still disputes. According to these citations, many workers were burned by chemicals in the fluid accumulating in the Boring Tunnels. (Boring disputes these violations and will defend itself at an upcoming hearing)
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More from Fortune on Boring Co.:
— Tunneling has been halted at the Boring Company site in Las Vegas after a worker was reported to have a “shattering” injury
“CEO of Las Vegas agency building Boring Company’s first tunnel system says his team will be ‘more involved’ after security incidents
‘We were constantly flirting with death’: Elon Musk wanted Boring Co. would build a system of tunnels below Las Vegas. Former employees say they feared for their lives while working there
This story originally appeared on Fortune.com