A US federal judge on Saturday (Feb 8) blocked Elon Musk's Department of Government Efficiency from accessing Treasury Department records which contain sensitive personal data, including Social Security and bank account numbers for millions of Americans.
District Judge Paul A. Engelmayer issued the preliminary injunction after 19 Democratic attorneys general sued US President Donald Trump.
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The payment system handles several domains, including tax refunds, Social Security benefits, and veterans' benefits, sending out trillions of dollars every year while containing an expansive network of Americans' personal and financial data.
According to the case filed in federal court in New York City, the Trump administration allegedly allowed Musk's team access to the Treasury Department's central payment system in violation of federal law.
The district judge, Engelmayer, was appointed by former President Barack Obama. He said that anyone prohibited from having access to the sensitive information since January 20 this year, must immediately destroy all copies of material downloaded from Treasury Department systems.
Engelmayer set a hearing for February 14.
Earlier, the White House did not immediately respond to a request for comment on the lawsuit being filed.
Musk's DOGE was created to discover and eliminate what the Trump administration has considered wasteful government spending.
Notably, DOGE's access to Treasury records has triggered widespread concern among critics over the increasing power of Musk in Trump's administration, while supporters have cheered at the idea of reining in bloated government finances.
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New York Attorney General Letitia James's office filed the lawsuit, saying DOGE's access to the Treasury Department's data raises security problems and the possibility of an illegal freeze in federal funds.
"This unelected group, led by the world's richest man, is not authorized to have this information, and they explicitly sought this unauthorized access to illegally block payments that millions of Americans rely on, payments for health care, child care, and other essential programs," James said in a video message on Friday.
The suit alleged that DOGE's access to the Treasury records could interfere with funding already appropriated by Congress, which would exceed the Treasury Department's statutory authority.
The case further argued that the DOGE access violates federal administrative law and the US Constitution's separation of powers doctrine.
(With inputs from agencies)