Federal judge blocks Musk’s DOGE from access to Treasury Department material

NEW YORK — A federal judge issued an emergency order early Saturday prohibiting Elon Musk’s U.S. DOGE Service from accessing personal and financial data on millions of Americans kept at the Treasury Department, noting the possibility for irreparable harm.

U.S. District Judge Paul A. Engelmayer’s decision also ordered Musk and his team to “immediately destroy any and all copies of material downloaded from the Treasury Department’s records and systems, if any.”

The conditions are in place until another judge hears arguments on the matter on Feb. 14.

The ruling came hours after attorneys general from 19 states, including Illinois, sued to stop Musk’s team from dealing with sensitive files during its review of federal payment systems — an unprecedented effort that skirted firm security measures that permitted access to systems only to trained Treasury employees.

In a four-page order, Engelmayer said the states that sued the Trump administration “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,” Engelmayer wrote.

He adopted arguments by the states that Treasury records from the agency’s Bureau of Fiscal Services can only legally be accessed by specialized civil servants “with a need for access to perform their job duties.”

Under the order, the Trump administration is prohibited from giving access to political appointees, special government employees or government employees that are not assigned to the Treasury Department. The White House has said that Musk has been designated a special government employee.

The lawsuit, led by New York Attorney General Letitia James (D), says DOGE, a group operating under the direction of President Donald Trump, had no authority to access the Treasury Department’s systems and that doing so was a potentially massive cybersecurity and privacy risk.

“Defendants’ new expanded access policy poses huge cybersecurity risks that put vast amounts of funding for the States and their residents in peril,” says the lawsuit filed late Friday in U.S. District Court in Manhattan. “All of the States’ residents whose [personally identifiable information] and sensitive financial information is stored in the payment files … are at risk of having that information compromised and used against them.”

James and the other state law enforcement officials warned that DOGE, which stands for Department of Government Efficiency, has reportedly used a third-party, open-source artificial intelligence system to process data from other agencies recently, sparking fears that Treasury Department records could be mishandled.

Illinois Attorney General Kwame Raoul and the coalition assert that the Trump administration illegally provided Elon Musk and the DOGE unauthorized access to the Treasury Department’s central payment system.

“Federal law limits access to Americans’ personal and self-identifying information to specific government workers who have passed extensive and thorough security clearances. Unelected political appointees who have not been appropriately vetted should not be allowed to have unrestricted access to Americans’ sensitive personal information,” Raoul said

In addition to New York, the states involved in the lawsuit are: Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Jersey, North Carolina, Oregon, Rhode Island, Vermont and Wisconsin.

“As Democratic attorneys general we are suing to stop this unprecedented and unauthorized attack and to protect your personal information,” James said in a videotaped statement.

The payments involve “essential” needs such as health care and child care, James said.

New Jersey Attorney General Matthew Platkin (D) said in a news release that DOGE’s entry to secure government systems has “put at risk the financial and information security of our State and residents and Americans across the country, and they are completely unacceptable.”

Efforts to get clarity on DOGE’s plans for the agency have not been successful, the attorneys general said. The group is asking a federal judge to revoke DOGE’s access to the sensitive materials and issue “a declaration that Treasury’s policy change is unlawful and unconstitutional.”

In response to the news, Musk posted Saturday on X that DOGE and Treasury officials were working to add categories and rationales to each payment, which he said would make it easier to audit the trillions of dollars the payment system handles each year. He said he was primarily concerned with finding fraudulent transactions.

White House spokesman Harrison Fields said in a statement Saturday that the judge’s order amounted to “absurd judicial overreach” and that challenges to DOGE’s efforts stem from “those who’d rather delay much-needed change with legal shenanigans than work with the Trump Administration [to rid] the government of waste, fraud, and abuse.”

An outside review conducted by a federal contractor found an “unprecedented insider threat risk” at the Treasury Department as a result of DOGE’s access to the vital payment network that provides a necessary function to the entire U.S. economy. The contractor, Booz Allen Hamilton, recommended that DOGE’s access to the agency’s network be cut “immediately,” The Washington Post reported Friday.

Musk associate Tom Krause will be put in charge of $5 trillion in Treasury Department disbursements after a now-retired career official at the department clashed with DOGE over its requests for access. The appointment of a Musk insider will potentially give DOGE more leverage within the agency to carry out the Trump administration’s agenda.

Americans depend on Treasury’s payment processing for Social Security disbursements, tax refunds, veteran services, Medicare and Medicaid. It pays out trillions annually, supporting federal grants to states for uses such as disaster relief, education programs, social services and law enforcement initiatives.

The Treasury Department under the leadership of Trump-appointee Scott Bessent has said that Musk’s team was given “read only” exposure to payment records in an apparent effort to ease concerns about the policy change.

The comment did little to quiet widespread fears about the role of DOGE in essential government functions.

The plaintiffs also said the DOGE incursion into the agency’s records system could mean additional freezes on the release of federal funds after a recent chaotic episode following a White House-ordered freeze on grant and loan disbursements. A D.C. federal court judge temporarily blocked the Trump administration’s funding pause order late last month, providing a respite for nonprofits, states and individuals who depend on federal funding.

DOGE’s activities throughout the government have generated widespread confusion for federal employees and alarmed career government workers who have tried to maintain protocols as Musk and his team seek to aggressively downsize the government workforce.

Former Treasury Department official David A. Lebryk resigned after sparring with Musk and his team, including Krause, a Silicon Valley executive, over database access. Krause will serve as the fiscal assistance secretary of the Treasury Department.