Trump sued by Democrat states over Musk access to Treasury data

Erik Larson, Bloomberg News on Feb 8, 2025

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NEW YORK — A group of 19 mostly Democrat-led states sued President Donald Trump and Treasury Secretary Scott Bessent for granting Elon Musk unprecedented access to personal data on millions of Americans.

Trump and Bessent violated federal law by allowing Musk’s newly established efficiency team access to Treasury Department information, according to the lawsuit filed late Friday in New York. The case, along with a similar complaint filed earlier this week by unions, could delay what the president says is a plan to identify and cut wasteful spending.

The president created the White House’s temporary Department of Government Efficiency 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.

“Bessent’s implementation of Treasury’s new broader access policy, allowing Musk and his DOGE team to access BFS’s payment systems, was adopted without any public announcement or explanation,” the states argued. “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.”

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. That includes his bid to halt federal loans and grants, ditch so-called birthright citizenship and identify FBI agents and prosecutors who helped bring criminal cases against Trump and his supporters.

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 and physical spaces. 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.

On Friday, U.S. Sen. Ron Wyden 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.

Harrison Fields, principal deputy press secretary at the White House, said in a statement that the lawsuit by the states 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. “Slashing waste, fraud, and abuse, and becoming better stewards of the American taxpayer’s hard-earned dollars might be a crime to Democrats, but it’s not a crime in a court of law.”

In the states’ suit, the attorneys general claim Trump and Bessent violated the federal Administrative Procedures Act in numerous ways, including by exceeding their legal authority and making decisions that were “arbitrary and capricious.”

They’re seeking a temporary restraining order as well as an injunction that would block Treasury from granted access to the payment data to political appointees or “special government employees.” The states also want anyone who is granted access to pass background checks and receive proper security clearances.

Before the suit was filed, New York Attorney General Letitia James said DOGE sought to gain access to the payments data specifically to stop the flow of federal funds to “essential programs.”

“As the richest man in the world, Elon Musk is not used to being told ‘no,’ but in our country, no one is above the law,” James said in a statement. “The President does not have the power to give away our private information to anyone he chooses, and he cannot cut federal payments approved by Congress.”

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.