A federal judge on Friday extended an order keeping Elon Musk’s DOGE team out of Treasury Department payment systems, ruling that the Trump administration’s process for granting access to the sensitive data was so flawed and haphazard that it was likely illegal.
U.S. District Judge Jeannette Vargas ruled that Democratic attorneys general were likely to prevail in their claim that Treasury acted arbitrarily and capriciously in giving two DOGE employees access to the systems that control trillions of dollars of federal payments each year.
The Legal Battle Unfolds
In a 64-page opinion, Vargas, a Manhattan-based appointee of former President Joe Biden, ruled that Treasury’s “rushed and ad hoc process” for granting DOGE access to the payment systems created a “realistic danger that confidential financial information will be disclosed.”
Vargas dinged Treasury officials for standing up its DOGE operation in a “chaotic and haphazard” manner. The agency moved with “inexplicable urgency” to permit its DOGE team to access critical payment systems, Vargas wrote, leaving career staff “with almost no time” to develop measures to mitigate the “serious risks that access entailed.”
The preliminary injunction Vargas issued on Friday prohibits anyone affiliated with the U.S. DOGE Service or the Treasury DOGE team from accessing federal payment systems until further notice. That is narrower than an earlier, temporary order that had gone further in barring nearly all political appointees from also accessing the data.
A separate judge in Washington D.C. has also imposed restrictions on how Treasury grants access to the payment system.
A Treasury spokesperson did not immediately have a comment on the ruling.
Vargas rejected a slew of Democratic states’ other arguments that DOGE’s access to the payment system was unconstitutional or violated federal laws on privacy, taxpayer confidentiality or conflicts of interest. She ruled that the states either didn’t have standing to bring those claims or there wasn’t enough evidence that Treasury violated them.
Treasury's Defense and Future Steps
The Trump administration’s decision to open the federal payment system has drawn intense backlash from Democrats who say it’s an unprecedented political intrusion into how the federal government distributes Social Security benefits, tax refunds and thousands of other types of payments.
Treasury Secretary Scott Bessent has defended DOGE’s work at his agency as a necessary and serious review that’s meant to improve the accuracy and efficiency of how the agency operates. Bessent has pushed back on critics of the effort, accusing them of “fear-mongering.”
Earlier this week, Treasury voluntarily agreed to restrictions on how DOGE will access sensitive tax data at the Internal Revenue Service, preventing the team from accessing any individual taxpayer information.
In her ruling on Friday, Judge Vargas said that Treasury’s explanations for the hurried process were “riddled with inconsistencies” and “lack credibility.” She said that Treasury’s error in briefly granting one DOGE employee, Marko Elez, full access to the payment system instead of “read-only” access was emblematic of a “hurried” and flawed process. She also raised questions about the adequacy of Treasury’s training and vetting of DOGE employees.
“The process by which the Treasury DOGE Team was appointed, brought on board, and provided with access to [Bureau of the Fiscal Service] payment systems could have been implemented in a measured, reasonable, and thoughtful way,” Vargas wrote. “To date, based on the record currently before the Court, it does not appear that this has been the case.”
But Vargas also appeared to chart a way for the Trump administration to eventually lift the court’s restrictions, which the White House and Republicans have blasted as judicial overreach.
She said she would reevaluate whether the restrictions should be ended or modified after Treasury submits a report by March 24 that certifies that DOGE employees are adequately trained and vetted. She also wants more details about how Treasury plans to protect federal data and clarification about the chain-of-command between the White House DOGE operation and Treasury officials.
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