Musk’s DOGE Blocked From Treasury Data in State AGs Lawsuit (1)

A federal judge temporarily blocked Elon Musk’s government efficiency team from accessing some Treasury Department information and ordered the destruction of data they’ve already gathered in response to a lawsuit from a group of states.

US District Judge Paul Engelmayer in Manhattan issued the temporary restraining order hours after 19 mostly Democratic-led states filed the suit against President Donald Trump and Treasury Secretary Scott Bessent. The order will remain in place until the judge rules on a longer lasting injunction sought by the states. He set a hearing for Feb. 14.

Engelmayer said the states were likely to win the case on the merits, at least based on the evidence so far. He also said the states were at risk of “irreparable harm” without immediate court intervention.

“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,” wrote the judge, appointed by former President Barack Obama.

The lawsuit filed late Friday in New York alleges Trump and Bessent violated federal law by allowing Musk’s so-called Department of Government Efficiency access to Treasury data containing personal information on millions of Americans. The case, along with a similar suit filed earlier by unions, could delay what Trump says is a plan to identify and cut wasteful spending.

The payment files at issue, which are uploaded to Treasury’s Bureau of Fiscal Services systems, contain sensitive personally identifiable information like Social Security and bank account numbers in order to make a wide variety of payments to millions of Americans from across the federal government, from veterans’ benefits and childcare tax credits to federal tax refunds.

Neither Musk nor DOGE is named as defendants in the suit.

“I have said it before, and I will say it again: no one is above the law,” New York Attorney General Letitia James, who is leading the lawsuit, said in a statement on Saturday. “Now, Americans can trust that Musk – the world’s richest man – and his friends will not have free rein over their personal information while our lawsuit proceeds.”

Scott Bessent

Photographer: Stefani Reynolds/Bloomberg

The order temporarily bars Treasury from “granting access to all political appointees, special government employees, and government employees detailed from an agency outside the Treasury Department.” The judge also ordered unqualified individuals who gained access to the disputed data since Jan. 20 to “immediately destroy any and all copies of material downloaded from the Treasury Department’s records and systems.”

Read More: DOGE Teen Was Fired by Cyber Firm for Leaking Company Secrets

In an exclusive interview on Bloomberg Television, Bessent said Musk’s team had “read-only” access to federal payment data and insisted there was no “tinkering” with the system.

Harrison Fields, the White House principal deputy press secretary, said in a statement that the suit shows Democrats have “have no plan on how to recover from their embarrassing loss” in the November election.

“Instead of working to become a party that focuses on the will of the people, they are hell-bent on keeping their heads in the sand and gaslighting on the widely supported mission of DOGE,” Fields said.

Trump created DOGE by executive order and appointed Musk to lead what they describe as an effort to modernize federal technology and identify spending cuts. But the move immediately raised legal concerns.

Attorneys general from states including New York and California alleged Trump and Bessent placed at risk the personal data of millions of people as well as billions of dollars in payments that states receive through the Treasury’s Bureau of Fiscal Services, or BFS.

The states allege the move violated the federal Administrative Procedures Act by failing give an explanation for the policy or allow public comment. The temporary court order requires that anyone who is granted access must pass background checks and receive proper security clearances. The states will seek to make all of the TRO’s requirements permanent.

Implementation of the policy, allowing “Musk and his DOGE team to access BFS’s payment systems, was adopted without any public announcement or explanation,” the states said. “Defendants have provided no reasons at all to justify the new policy, nor did Treasury conduct a privacy impact assessment prior to implementing the change.”

Legal Challenges

The suit is the latest in a wave of challenges to the president’s executive orders and other actions since he took office last month. Judges have placed injunctions on his efforts to halt federal loans and grants and ditch so-called birthright citizenship, among others.

Critics have been raising alarms for weeks about Musk’s role since DOGE staffers began entering the premises of various agencies to gain access to computers systems. The White House says Musk, the world’s richest person who runs several companies including Tesla Inc., is a special government employee — an officer or employee in the executive branch of the federal government who typically serves for a limited period of time.

Senator Elizabeth Warren, a Democrat from Massachusetts, center, speaks as demonstrators hold signs during a protest against Elon Musk outside the US Treasury building in Washington, DC on Feb. 4.

Photographer: Stefani Reynolds/Bloomberg

On Friday, Senator Ron Wyden, Democrat of Oregon, accused Treasury of misleading Congress about the level of access the administration has granted to allies of Musk. Bessent has strongly supported DOGE’s efforts.

In the lawsuit brought by the unions, a US judge on Thursday temporarily limited access to the Treasury’s payments system. The unions accused Bessent of illegally sharing their members’ information with DOGE. The judge is considering a longer pause in access by Musk’s team as the suit by the unions plays out.

The case is New York v. Trump, 25-cv-1144, US District Court, Southern District of New York (Manhattan).

(Updates with detail on the judge’s ruling.)

To contact the reporter on this story:
Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story:
Misyrlena Egkolfopoulou at megkolfopoul@bloomberg.net

Wendy Benjaminson, Ian Fisher

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