A U.S. federal judge ruled last Friday that employees of the Elon Musk-led Department of Government Efficiency (DOGE) may continue to access sensitive U.S. Treasury data, determining that the plaintiffs—retirees and union representatives—failed to demonstrate an imminent risk of irreparable harm.
U.S. District Judge Colleen Kollar-Kotelly found that while the unions had standing to bring the lawsuit, their request for a preliminary injunction to block DOGE’s access was unsupported by direct evidence of imminent privacy violations.
The ruling allows the Treasury Department’s Bureau of the Fiscal Service (BFS) to continue granting DOGE employees access to financial data pending further legal proceedings.
Legal Standing but No Injunction
The plaintiffs argued that DOGE’s expedited access to the BFS payment processing system, which handles more than 80% of federal transactions, violated privacy protections under the Privacy Act of 1974 and the Internal Revenue Code.
They expressed concern that DOGE employees, including private-sector consultants hired as Special Government Employees, were given excessive authority over sensitive financial records without sufficient oversight.
Judge Kollar-Kotelly recognized that the potential unauthorized disclosure of financial information was a legally cognizable harm under well-established privacy doctrines. However, she ruled that the plaintiffs did not meet the D.C. Circuit’s stringent standard for demonstrating “certain and great” irreparable harm.
The court noted procedural irregularities in onboarding DOGE personnel, including an instance where a contractor received “read/write” access when only “read” permissions were intended. However, Kollar-Kotelly found no evidence of actual data breaches or improper disclosures outside of federal agencies.
“There is no direct evidence that any of these mistakes resulted in improper disclosure outside of the federal government or made such disclosure more likely in the future,” she wrote.
Divergent Federal Rulings on DOGE Data Access
The ruling contrasts with a separate decision issued on February 21 by U.S. District Judge Jeannette A. Vargas of the Southern District of New York. Judge Vargas granted a preliminary injunction blocking Treasury officials from providing DOGE full access to BFS payment systems, citing a less stringent “irreparable harm” standard in the Second Circuit.
In that case, New York and a coalition of Democratic-led states argued that the potential for widespread financial data exposure justified immediate intervention.
While the New York injunction remains in effect, limiting DOGE’s role in BFS data handling in that jurisdiction, Friday’s ruling preserves DOGE’s ability to continue working with the Treasury in Washington, D.C. Judge Kollar-Kotelly’s decision leaves the door open for further legal challenges should evidence emerge of actual data misuse or security lapses.
Background and Executive Order
The dispute arises from President Donald Trump’s executive order on Inauguration Day, which renamed the U.S. Digital Service as the U.S. DOGE Service and directed the agency to “moderniz[e] Federal technology and software to maximize governmental efficiency and productivity.” The Treasury Department subsequently integrated DOGE personnel into BFS operations, granting them varying levels of access to financial processing systems.
Union leaders have voiced concerns that DOGE staffers lack proper security clearance and training to handle financial data securely. In response, Treasury officials acknowledged onboarding errors, including delayed appointment paperwork and accidental “write” access granted to one DOGE employee. However, they asserted that no personal financial data had been improperly disclosed to external parties.
Future Legal Implications
The plaintiffs may seek further relief if new evidence emerges suggesting heightened risks to sensitive financial data. Judge Kollar-Kotelly underscored Treasury’s obligation to maintain strict oversight and ensure DOGE’s compliance with federal privacy laws.
Meanwhile, Judge Vargas’ injunction in New York remains in place, setting up a potential circuit split on the issue of federal data security and agency access. If conflicting rulings persist, the matter may eventually reach the U.S. Court of Appeals or the Supreme Court for further clarification on privacy protections in government data-sharing practices.
