A New York federal judge on Friday afternoon kept in place a temporary order barring employees of Donald Trump’s so-called Department of Government Efficiency cost-cutting initiative from accessing the Treasury Department’s sensitive financial systems with data on millions of Americans.
U.S. District Judge Jeannette A. Vargas held off on ruling on a preliminary injunction requested by a coalition of 19 Democratic attorneys general to block DOGE from accessing Treasury systems due to constitutionality and cybersecurity concerns but extended a temporary restraining order that was already in place until she rules on the preliminary injunction.
Vargas, a Joe Biden appointee, promised a ruling “shortly, but it will not be today.”
She expressed wariness during Friday’s hearing at the expeditiousness of DOGE’s rollout into the Treasury’s sensitive payment information database, given the acknowledged risks of data breaches and cybersecurity.
“You’ve described the processes as a thoughtful one, but the timeframes seem very abbreviated,” she said. “Why the rush?”
New York Special Counsel Andrew Amer echoed the judge’s concerns about the hastiness of installing DOGE staffers at the federal Treasury Department.
“This was a rushed project, and the law doesn’t permit this to be rushed,” he said.
Amer rebutted the government’s defense that the Treasury was just carrying out Trump’s DOGE executive order consistent with normal practices for any incoming new administration.
“This was not a Treasury function — this was building a new automated process to apply an ideological litmus test to funding requests,” he said.
Vargas also asked lawyers representing the Trump administration whether or not DOGE staff embedded at the United States Treasury had disclosed Treasury data outside of the department.
“We don’t presently know,” Assistant U.S. Attorney Jeffrey Oestericher replied, noting that a Treasury Department forensic investigation is underway but had not yet concluded.
“Is that not problematic,” Vargas asked.
The hearing arises from a civil lawsuit brought by a coalition of 19 Democratic attorneys general — led by New York Attorney General Letitia James — who sued Trump on Friday to stop billionaire Elon Musk’s Department of Government Efficiency from accessing Treasury Department records containing sensitive personal data, such as Social Security and bank account numbers of millions of Americans.
The coalition argued the Trump administration’s unauthorized meddling with sensitive Treasury data exceeds the department’s statutory authority and violates the Administrative Procedures Act, the separation of powers doctrine, and the Take Care Clause of the United States Constitution.
James attended Friday’s hearing along with Connecticut Attorney General William Tong.
“We stand together to stop Elon Musk and his army of tech bro wannabe stormtroopers from tearing up the Treasury Department, now IRS we hear, Department of Education, and the federal government,” Tong told reporters outside of the courthouse before the oral arguments on Friday afternoon. “This is the largest data breach in American history; we’re talking about Social Security numbers, we’re talking about banking information, we’re talking about addresses, biometric information, states and payment information, routing numbers, bank accounts.”
Another Manhattan federal judge, U.S. District Judge Paul Engelmayer, quickly ordered a temporary restraining order over the weekend, pausing any unauthorized political appointees from accessing the Treasury’s Bureau of Fiscal Services payment platform until Friday’s hearing.
Contrary to its name, Trump’s cost-cutting initiative known as DOGE is not actually a federal government department; rather, it is the new administration’s renamed U.S. Digital Service, the tech services outfit founded by President Barack Obama in 2014 to revamp government websites.
Trump created DOGE on Jan. 20 via executive action with the stated purpose of modernizing federal software and maximizing “governmental efficiency and productivity.” The order replaced the previous U.S. Digital Service with DOGE and established a termination date of July 14, 2026.
In the weeks since, Musk — who continues to control Tesla, X, and SpaceX — has tasked several nongovernmental DOGE agents with gaining access to sensitive systems and information at the Treasury Department, the Labor Department, the U.S. Agency for International Development, the Consumer Financial Protection Bureau, and others.
When the agents — mainly young men between 19 and 25 years old with limited experience outside of Musk’s companies — faced resistance from certain department heads, such as at the Bureau of the Fiscal Service, Trump nominees removed those individuals and granted the agents access.
Former Treasury officials filed an amicus brief in the case, raising concerns arising from bypassing longstanding precedent that non-career officials will not access or interfere with BFS payment systems, including the risk that payments will be illegally stopped based on Musk’s or the Trump administration’s own political or policy preferences, the possibility of severe cybersecurity and privacy breaches,
“For the first time in decades, the Secretary of the Treasury has delegated the responsibilities of overseeing these payment systems to a political official rather than a non-partisan career civil servant with long expertise and experience in these matters, even while that political official maintains his role as a private company CEO,” they wrote in a court filing.
The former Treasury official additionally emphasized the risk that payments could be inadvertently delayed to millions of individuals, including retirees and veterans; to organizations and businesses providing public services on behalf of the federal government; and to states, localities, territories, and tribal nations providing services like Medicaid and transportation.
Musk’s reportedly unfettered access to federal government operations has ignited widespread condemnation in the first month of President Trump’s second term.
The administration also faces lawsuits for granting DOGE access to data from the Treasury and Labor departments.
The Treasury Department’s watchdog — the Office of Inspector General — said Friday it was launching an audit of the security controls for the federal government’s payment system after Democrats raised red flags about the access provided to Musk’s DOGE team.
On Thursday, a coalition of 14 state attorneys general led by New Mexico sued Musk and his Department of Government Efficiency, challenging the billionaire’s “virtually unchecked authority” granted to him by Trump to drastically alter the federal government despite never being nominated or confirmed by the Senate to a governmental office.
The agency’s DOGE acronym is a nod to a “meme coin” that Musk has disclosed he invested in, raising yet another potential conflict of interest; years before he infiltrated the second Trump administration, Musk was an avid supporter of Dogecoin, pronounced “dohj-coin,” a digital cryptocurrency coin created as a joke in 2013.
