Judge Extends Ban on Elon Musk and His DOGE Staff From Accessing Sensitive Treasury Payments System: Fierce Legal Battle Ensues

A New York federal judge on Friday upheld a temporary court order prohibiting staff members of President Trump’s Department of Government Efficiency, better known as DOGE, from accessing sensitive financial systems with data on millions of Americans. But the judge did not yet rule on a request for a preliminary injunction requested by a coalition of more than a dozen Democratic attorneys general opposed to Mr. Trump and Elon Musk. Reserving her decision, the Judge Jeannette A. Vargas said after a two-hour- long hearing on Friday that her ruling would come “shortly, but it will not be today.” Before the hearing began, Attorney General Letitia James, who is spearheading the lawsuit, told reporters outside the Southern District of New York courthouse, “It’s important that individuals understand that all 18 attorneys general, who have filed this action seek to stop a private individual from accessing the information of millions of Americans. Their social security numbers, their tax information, their addresses. No one elected Elon Musk and his minions and no one has allowed him to have access to this information. This is a violation of the separation of powers.” The Connecticut attorney general, William Tong, who was standing next to her, added, “This is the largest data breach in American history.” Other states, whose Democratic attorneys general have signed on to the lawsuit are Arizona, California, Colorado, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, North Carolina, Oregon, Rhode Island, Vermont and Wisconsin. The civil lawsuit challenges a new policy by the Department of the Treasury that expands access to the central payment system of the Bureau of Fiscal Services to “special government employees” such as Mr. Musk’s staffers at DOGE who’ve already cut a wide swath through the federal bureaucracy as they implement President Trump’s long promised cost-cutting initiative. The attorneys general argue that access by Mr. Musk’s staff to sensitive data at the Department of the Treasury violates the law and poses a “huge cybersecurity risk.” “All of the States’ residents whose personal identifiable information and sensitive financial information is stored in the payment files that reside within the payment systems are at risk of having that information compromised and used against them,” the attorneys wrote in their lawsuit. They further argue that such access was previously only granted to few civil servants with security clearances, and that the Trump administration could potentially “block federal funds from reaching beneficiaries who do not align with the President’s political agenda.” Withholding payments, the attorneys argued, which have already been authorized by Congress, would exceed the authority of the Department of Treasury and violate the separation of powers doctrine. Last Saturday, U.S. district judge Paul Engelmayer temporarily blocked the access to “payment systems or any other data maintained by the Treasury Department” to anyone “other than civil servants with a need for access to perform their job duties.” This barred DOGE staffers and “any government employee detailed from an agency outside the Treasury Department” from accessing the payment systems, the Manhattan judge wrote in his order, which was published at 1 o’clock in the morning. Judge Engelmayer agreed with the attorneys general that their states could potentially face “irreparable harm” and that there was a heightened risk of leaks and hacking. “The Court’s firm assessment is that, for the reasons stated by the States, they will face irreparable harm in the absence of injunctive relief. That is both because of the risk that the new policy presents of the disclosure of sensitive and confidential information and the heightened risk that the systems in question will be more vulnerable than before to hacking,” Judge Engelmayer reasoned, and ordered the parties to appear in court before Judge Vargas the following Friday. President Trump’s Justice Department swiftly responded, seeking that the order be lited, filing its motion of opposition on Super Bowl Sunday, arguing that the restriction was unconstitutional and needed to be terminated immediately. In an additional filing on Tuesday, lawyers for the government argued that the order limits President Trump’s “ability to give direction to his subordinates” to investigate if the $5 trillion budget by the Department of Treasury’s Bureau of the Fiscal Service is being spent efficiently. Vice President JD Vance commented on X that, “Judges aren’t allowed to control the executive’s legitimate power.” This led to the left declaring an imminent “constitutional crisis” in which Mr. Trump would defy the judges in a brute exercise of executive power. But in the Oval Office on Wednesday, with Mr. Musk and his four-year-old son, Lil X, standing beside the Resolute Desk, Mr. Trump said he would respect the courts and appeal unfavorable rulings, hinting at more upcoming court battles. Mr. Amer had also argued on behalf of Ms. James in the civil fraud trial she brought against Mr. Trump and his two eldest sons, as well as ten of his companies, and two long-time employees at the Trump Organization, former chief financial officer Allen Weisselberg, who spent a total of eight months and 20 days behind bars, having been sentenced twice, and former controller Jeffrey McConney, who cried on the witness stand when he testified during the trial in 2023 at the New York State Supreme Court at Manhattan. The presiding judge, Arthur Engoron, issued a judgment of nearly half a billion dollars. Mr. Trump has appealed the case. A ruling has not been published yet. Before Friday’s hearing, Judge Vargas had amended the restriction and clarified that officers at the Treasury Department, who were nominated by President Trump and confirmed by the Senate, like Treasury Secretary Scott Bessent, could access the databases. On Friday, she asked Assistant U.S. Attorney Jeffrey Oestericher, who was representing the federal government, under what statute the DOGE staffers had been appointed. Mr. Oestericher said, “I don’t know the answer to that question. We’ll have to get you that answer.” But he empathized that the access given to DOGE employee Marko Elez, a 25-year-old former staff member at X, was limited and “over the shoulder,” meaning Mr. Elez could not edit any information and was not handed any security codes. A lawyer for the New York attorney general’s office, Andrew Amer, claimed that the staffers had taken screenshots, which had been sent out in emails to people outside of the Department of Treasury. When Judge Vargas asked the defense if any data had been exposed or misused, Mr. Oestericher said “We don’t presently know.” He added that there was an ongoing investigation into the matter, and that “we candidly admit that there was some risk.” The judge also questioned why the access to such sensitive databases had been granted so quickly. “You’ve described the processes as a thoughtful one, but the timeframes seem very abbreviated,” the judge asked. “Why the rush?”“Time was of the essence because the executive order made time the essence,” Mr. Oestericher said and explained that Mr. Musk’s staffers were “trying to identify payments that violate the executive orders.” President Trump has vowed “to squeeze the bloated federal bureaucracy for massive savings,” as he said in a campaign video in June 2023, where he also said that “it was undisputed that the president had the constitutional power to stop unnecessary spending.”

Judge Extends Ban on Elon Musk and His DOGE Staff From Accessing Sensitive Treasury Payments System: Fierce Legal Battle Ensues

More from the New York Sun

Mission Not Accomplished: Fed Policy Tweaks Under New Chairman Aim To Nip Inflation in the Bud

ICE To Halt Vehicle Stops After Agents Kill Two More Immigrants in Deadly Enforcement Errors: Repor

A Threat Emerges to Wall Street’s Financial Supremacy From Deep in The Heart of Texas

More from the New York Sun

Mission Not Accomplished: Fed Policy Tweaks Under New Chairman Aim To Nip Inflation in the Bud

ICE To Halt Vehicle Stops After Agents Kill Two More Immigrants in Deadly Enforcement Errors: Repor

A Threat Emerges to Wall Street’s Financial Supremacy From Deep in The Heart of Texas

The 21st-Century Twist on Socialism

Steve Marcus Redraws the Visual Narrative of Jewish Pop Art

Can Kevin Warsh Have His Cake and Eat It Too?

Meta Faces Landmark Lawsuit Alleging AI Tools Targeted Disabled Workers for Layoffs

America’s War on Atomic Capabilities and Iran’s Threat To Free Navigation Is About To Escalate