By Lambert Strehter of Corrente.
“Stupid? Shit, no, he was smart as hell.” The Finn stubbed his cigarette out in a cracked ceramic Campari ashtray. “Just a total fuck-up, was all.” –William Gibson, Count Zero
Readers will be familiar with friend-of-the-blog Nathan Tankus and non-mainstream economist extraordinaire Stephanie Kelton from the MMT wars. If you’re not, you should be (Tankus’s blog; Kelton’s). Both have now entered the fray over DOGE (Elon’s Dangerous Oligarchs Grab Everything “Department of Government Efficiency” (quotes in the executive order that gave it horrid birth, since it’s not really a department).
Both Tankus and Kelton have advanced the story in way that our mainstream press seems unable to do; I will look at Tankus first, then Kelton. I will then undertake the thankless task of ascertaining DOGE’s current status; it’s now a “temporary organization,” a piece of organizational jujitsu, which renders most, but not all, of the current lawsuits against DOGE moot. I will then present a brief fact set drawn from the current more-heat-than-light DOGE dogpiles — the Lutherans, USAID — before presenting a little blue sky thinking on future legal and political attacks on DOGE (given that lawfare what Democrats seem to be best at). If I am lucky, some readers will find the blue sky thinking helpful, as with HICPAC. Finally, I will not be covering Elon’s rampage through Twitter’s innards, suggestive though it may be for the course of DOGE, or the corruption of Silicon Valley’s “better to ask for forgiveness than permission” culture, or Elon’s extremely young team of Peter Thiel-adjacent blood bags programmers. Perhaps another time! (Adding, this might get a bit long. Sorry!)
Setting the scene:
It’s now not just the “legal plumbing,” it’s the payments plumbing too. This is now also the closest thing we’ve ever had to a payment system constitutional crisis.
So what happened? According to reporting on Friday — first at the Washington Post and then in more detail from CNN as well as the New York Times — the Fiscal Assistant Secretary of the United States Treasury David Lebryk[1] has been put on paid administrative leave and plans to resign after refusing to give Elon Musk’s “Department of Government Efficiency” (DOGE) access to the operational details of the Treasury’s payment system and the data it processes. In particular, Musk’s DOGE team has been asking for what the New York Times reporting refers to as “source code information” since December and has been rebuffed. The CNN reporting specifically states that they were inquiring about the technical ability to stop payments.
David Lebryk has been an employee at the United States Treasury since 1989 and has been Fiscal Assistant Treasury Secretary since 2014, which is the highest position a civil service employee can reach; everyone above him is a political appointee. Donald Trump named Lebryk acting Treasury Secretary while his nominee Scott Bessent went through the nominations process….
Lebryk being put on paid administrative leave reportedly happened after he requested and got a meeting with Treasury Secretary Scott Bessent, fresh from his confirmation by the Senate. Bessent’s full willingness to cooperate with DOGE’s desire to access the operational aspects of the Treasury’s payment system, even to the point of overruling Lebryk, is an extremely shocking development. It implies a level of willingness to serve Trump’s interests that has not previously been understood by Congress, Wall Street, or corporate America at-large.
However, this is consistent with internal conversations among those in the president’s orbit. I can exclusively report here for the first time that Scott Bessent was advised that what Donald Trump wanted in a Treasury Secretary was a person who would have the credibility Steve Mnuchin had with Wall Street but who would be loyal to Trump above all other considerations, according to two sources familiar with the situation. This included, but was not limited to, unconditionally agreeing to work with whomever Trump sent over to the Treasury Department and helping go after Donald Trump’s enemies. In the context of Bessent’s actions this week, and what Elon Musk and DOGE want from the Bureau of the Fiscal Service, these commitments take on a dark new meaning.
The danger is also not in the near future, it is here. Follow up reporting from the New York Times Saturday evening in an article straightforwardly informed readers in its headline that ‘Elon Musk’s Team Now Has Full Access to Treasury’s Payments System.’…. For reasons I will go into below, I do believe that it is the case that Musk and his team are not yet near having ‘operational capabilities.’ The key word is ‘yet.’
Operationally, in short form, agencies approve payments; the Bureau of the Fiscal Service cuts the checks. This architecture leads to the the key point:
Without political control of the payment’s heart, the Trump administration and Elon Musk must chase down every agency and bend it to their will. They are in the process of doing that, but bureaucrats can notionally continue to respect the law and resist their efforts. They are helped in this effort by court injunctions they can point to. This is bureaucratic trench warfare. But if Musk and Trump can reach into the choke point, the Bureau of the Fiscal Service, they could possibly not need agency cooperation. They can just impound agency payments themselves. They could also possibly stop paying federal employees they have forced on paid administrative leave, coercing them to resign. These possibilities are what every Treasury expert I’ve talked to instantly thought of the moment they read the Washington Post reporting and are incredibly alarmed about.
There’s much, much more to the Tankus post (the word “COBOL” appears frequently going forward), and I urge you to read it in full, but seeing the Bureau of the Fiscal Service as the chokepoint Elon and his tech bros which to seize is the key point politically and instruc
Kelton: Will the Ratings Agencies React to the Breakdown in Governance?
Setting the scene:
Under the Constitution, once Congress appropriates funding for various programs—be it Social Security, Medicaid, the Inflation Reduction Act, or Meals on Wheels—it is up to the executive branch (the U.S. Treasury and the White House) to faithfully execute the law. As I wrote for Newsweek last week, no one—not Elon Musk or President Trump—has the legal authority to delay or cancel appropriations once they have been enacted into law. Any default would violate the Impoundment Control Act of 1974.
But that clearly doesn’t matter to President Trump and his team, who have already demonstrated a willingness to ignore the law. As evidence, look no further than the the administration’s attempt to claim sweeping powers to impound spending via executive order just last last week.
The key point:
So what happens if DOGE gains operational control and decides to start picking and choosing which government commitments to honor?… Alarm bells should be ringing from on high, and I can’t help but wonder whether the ratings agencies—Fitch, Moody’s, and Standard and Poor’s—are going to weigh in.1 The last time there was this much chaos and uncertainty (after the January 6 insurrection and debt ceiling shenanigans), Fitch downgraded its rating on US government debt from AAA to AA+, highlighting concerns about a ‘steady deterioration in [America’s] standards of governance.’ It’s hard to see how they can look through this moment….[E]ven if the Treasury continues to pay interest and principal to bondholders without interruption, seizing control of the payment system and arbitrarily defaulting on other commitments would surely demonstrate a further ‘deterioration in the standards of governance.’ It’s time to acknowledge the unprecedented breach of protocol, the brazen disregard for the rule of law, and the elevated risk of default. NOTE I’m not suggesting that a downgrade would cause investors to sour on US Treasuries and force the administration to back down. It’s more about acknowledging the breakdown in governance and the elevated risk of voluntary defaults across the spectrum of government obligations.
Kelton’s article, too, is worth reading in full.
DOGE is a “Temporary Organization”
Last year — whoopsie, sorry, 22 days ago — I wrote that “The Department of Governmental Efficiency (DOGE) Lacks Legal Structure and Promised Transparency“; back then, a Federal advisory committee seemed the best fit for what DOGE was, or at least how it was acting, which meant it was subject to the Federal Advisory Committee Act (FACA). A week later, President Trump’s Executive Order “THE PRESIDENT’S “DEPARTMENT OF GOVERNMENT EFFICIENCY”” (quotes in the original (it’s not a department)) came out:
Sec. 3. DOGE Structure. (a) Reorganization and Renaming of the United States Digital Service. The United States Digital Service is hereby publicly renamed as the United States DOGE Service (USDS) and shall be established in the Executive Office of the President.
(b) Establishment of a Temporary Organization. There shall be a USDS Administrator established in the Executive Office of the President who shall report to the White House Chief of Staff. There is further established within USDS, in accordance with section 3161 of title 5, United States Code, a temporary organization known as “the U.S. DOGE Service Temporary Organization”. The U.S. DOGE Service Temporary Organization shall be headed by the USDS Administrator and shall be dedicated to advancing the President’s 18-month DOGE agenda. The U.S. DOGE Service Temporary Organization shall terminate on July 4, 2026.
Writes Wired:
A former USDS employee who spoke to WIRED on condition of anonymity called the repurposing of the Digital Service an “A+ bureaucratic jiu-jitsu move.”
And so it is. First, DOGE not a federal executive department, so it doesn’t need Congressional approval. Second, a temporary organization has a lot fewer of those pesky regulatory requirements than an advisory committee does. Lexology lists a lot of attack surfaces that lawyers, jailhouse and otherwise, can cross off their lists:
The structure evades lots of oversight…. For example:
Freedom of Information Act (FOIA): FOIA applies to federal agencies as defined in 5 U.S.C. § 551, which excludes the Executive Office of the President and its components. Since DOGE operates within the Executive Office, it is generally .
Administrative Procedure Act (APA): The APA governs federal agencies’ rulemaking and adjudication processes. Entities within the Executive Office of the President that solely advise and assist the President are exempt from the APA. DOGE’s advisory role likely places it .
Open Meetings Requirements: The Sunshine Act mandates open meetings for federal agencies headed by a collegial body. Since DOGE is led by an administrator rather than a multimember body, this act does not apply.
Federal Register Publications: Agencies must publish certain information in the Federal Register. However, components of the Executive Office of the President that solely advise and assist the President are typically exempt from these requirements. DOGE is .
Annual Federal Appropriations: DOGE’s activities depend on funding through annual appropriations. The implementation of its initiatives is subject to the availability of appropriated funds, as stated in the executive order.
Other Legal Limitations: DOGE must operate within the bounds of existing laws and regulations. The executive order specifies that its provisions should not impair or affect the authority granted by law to executive departments or agencies, nor the functions of the Office of Management and Budget. Implementation is subject to the availability of appropriations and applicable law.
(Attack surfaces remain, and we’ll go into some of them below.)
Status of Current DOGE Cases
From Just Security’s litigation tracker, these are the DOGE cases:
- Public Citizen Inc et al v. Donald J. Trump and Office of Management and Budget (D.D.C.)
- Jerald Lentini, Joshua Erlich, and National Security Counselors v. Department of Government Efficiency, Office of Management and Budget, Office of Personnel Management, Executive Office of the President, Elon Musk, Vivek Ramaswamy, Russell Vought, Scott Kupor, and Donald Trump (D.D.C.)
- American Public Health Association et al v. Office of Management and Budget, Acting Director of the Office of
- Management and Budget, and the Department of Government Efficiency (D.D.C.)
The first three are FACA cases and the fourth is FOIA. Neither FACA nor FOIA apply to temporary organizations in the executive department.[2]
Sidebar: Fact Set
Despite all the hue and cry, DOGE’s case for enormous amounts of fraud that can only be rooted out via handing them control over the nation’s 1.27-billion-yearly-payment facility is strikingly weak (not least because the Treasury has existing anti-fraud facilties for the agencies to use[3]). For now, relax and enjoy the stupid, but I will use these cases below to present possible attack surfaces.
Terrorists. Elon writes:
Does Elon think we are little children of six? How could we be funding Al Qaeda and the Taliban if we didn’t cut them checks? (More seriously, Tankus describes the architecture; the agencies vet the payees. Seemingly, Elon doesn’t know this; at best, he’s got his future, political goal confused with how payments work now.)
The Lutherans:
Now it’s the “Lutheran” faith (this use of “religion” as a money laundering operation must end):
Lutheran Family Services and affiliated organizations receive massive amounts of taxpayer dollars, and the numbers speak for themselves. These funds, total BILLIONS of American… pic.twitter.com/IaTG2uNXRB
— General Mike Flynn (@GenFlynn) February 2, 2025
We’ll leave the question of how the Lutherans stuff all that cash into their hot dishes for another day; suffice to say that a spreadsheet is no evidence at all of fraud; the numbers “speak for themselves” only to the extremely credulous. Here let me note some extremely coverage, from Bloomberg of all places:
“The corruption and waste is being rooted out in real-time,” Musk posted on X, saying officials reporting to his so-called Department of Government Efficiency are “rapidly shutting down” payments to a Lutheran charity.
DOGE is a “temporary organization.” How do genuine government “officials” report to it? As for “rapidly shutting down,” I guess we’ll have to see[4].
USAID. This is quite a volatile situation. From Yahoo News:
Staffers of the U.S. Agency for International Development were instructed to stay out of the agency’s Washington headquarters, and yellow police tape and officers blocked the agency’s lobby on Monday, after billionaire Elon Musk announced President Donald Trump had agreed with him to shut the agency.
USAID staffers also said more than 600 additional employees had reported being locked out of the agency’s computer systems overnight. Those still in the system received emails saying that “at the direction of Agency leadership” the headquarters building “will be closed to Agency personnel on Monday, Feb. 3.” The agency’s website vanished Saturday without explanation.
On the coverage, note the lack of agency in “instructed by.” Note the weird agency in “Elon Musk announced President Donald Trump….” The cops block the lobby because Elon said something? Really? Meanwhile, the Democrats bestir themselves:
Members of Congress attempt to enter USAID pic.twitter.com/8YJSLOkEgx
— Aaron Fritschner (@Fritschner) February 3, 2025
Yes, the Democrats rush to defend the cover story-generating portion of the inteligence community’s premier color revolutions fomenter. Hilarity ensues. That said, USAID is an agency established by Congress; Elon can’t just abolish it.
Possible DOGE Attack Surfaces
Enforce “Access”: Previously reputable Treasury Secretary Bessent seems not to have sold his entire soul:
Treasury Secretary Scott Bessent has signed off on a plan to give access to the payment system to a team led by Tom Krause, the CEO of Cloud Software Group, who is now working for the Treasury Department and serves as a liaison to Musk’s DOGE group that operates out of the United States Digital Service. One person familiar with the effort said Krause’s role will be subject to safeguards that would not allow any ability to make changes to the system and that no one outside Treasury would have access.
“The secretary’s approval was contingent on it being essentially a read-only operation,”[5] the person said.
Fine, but anybody who takes Elon’s word on this, or the word of any of his minions, should go talk to the SEC. Ron Wyden’s sternly worded letter to Bessent was in fact quite weak:
Please describe what information security measures and other operational security steps will be taken to ensure that providing officials associated with Elon Musk or DOGE such access does not result in hackers and foreign spies breaching or otherwise gaining access to the Fiscal Service’s payment systems
First, he gave Bessent a week to respond. Why not a day? Second, the issue [lambert pounds head on desk] isn’t Chinese spies and hackers; it’s DOGE itself.
The Democrats should find somebody who actually wants to govern, and make sure that Treasury data is not changed. Maybe some clever lawyer could craft an injunction.
Privacy Violations. From Privacy Act of 1974, as amended, 5 U.S.C. § 552a:
(b) CONDITIONS OF DISCLOSURE.—No agency shall disclose any record which is contained in a system of records by any means of communication to any person, or to another agency, except pursuant to a written request by, or with the prior written consent of, the individual to whom the record pertains, unless disclosure of the record would be—
(1) to those officers and employees of the agency which maintains the record who have a need for the record in the performance of their duties; (2) required under section 552 of this title;
(3) for a routine use as defined in subsection (a)(7) of this section and described under subsection (e)(4)(D) of this section;
(4) to the Bureau of the Census for purposes of planning or carrying out a census or survey or related activity pursuant to the provisions of title 13;
(5) to a recipient who has provided the agency with advance adequate written assurance that the record will be used solely as a statistical research or reporting record, and the record is to be transferred in a form that is not individually identifiable;
(6) to the National Archives and Records Administration as a record which has sufficient historical or other value to warrant its continued preservation by the United States Government, or for evaluation by the Archivist of the United States or the designee of the Archivist to determine whether the record has such value;
(7) to another agency or to an instrumentality of any governmental jurisdiction within or under the control of the United States for a civil or criminal law enforcement activity if the activity is authorized by law, and if the head of the agency or instrumentality has made a written request to the agency which maintains the record specifying the particular portion desired and the law enforcement activity for which the record is sought;
(8) to a person pursuant to a showing of compelling circumstances affecting the health or safety of an individual if upon such disclosure notification is transmitted to the last known address of such individual;
(9) to either House of Congress, or, to the extent of matter within its jurisdiction, any committee or subcommittee thereof, any joint committee of Congress or subcommittee of any such joint committee;
(10) to the Comptroller General, or any of his authorized representatives, in the course of the performance of the duties of the Government Accountability Office;
(11) pursuant to the order of a court of competent jurisdiction; or
(12) to a consumer reporting agency in accordance with section 3711(e) of title 31.
IANAL, but if Flynn’s Lutheran spreadsheet data is Fiscal Service data, both he and the DOGE goon who supplied it broke the law, because none of those exemptions cover the case. Perhaps some clever lawyer could write another injunction.
Security Violations. Trump’s executive order establishing DOGE reads:
USDS shall adhere to rigorous data protection standards.
What does that even mean? Surely there’s some sort of standard here? Does “rigorous,” for example, mean the same baseline as Fiscal Services? Lower? Higher? I assume lower, because otherwise why not just say “the same as Fiscal Services”? Perhaps some aggressive Democrat could find out.
Impersonating Federal Officer
I think this is an edge case, but I keep hearing about full-time Federal employees being fired or interfered with in the performance of their duties by DOGE goons, when DOGE is a temporary organization. That seems odd in itself, but if the goon is a volunteer — as many DOGE types have been said to be — I’d be even more surprised if they can do that.
Elon’s Role, and His Conflicts
First, I’m having a hard time fitting Elon into the temporary organization org chart. What exactly is Elon’s role? Is he, for example, a one-man advisory committee, and hence subject to FACA? Some clever lawyer should find out.
Second, when asked if the US Budget should go “on the blockchain,” Elon answered “yes.” I have it on good authority that this a really bad idea, but Elon’s putative software expertise aside, that makes him massively conflicted, since his blockchain holdings would go soar if this stupid idea is legimated by the State MR SUBLIMINAL Oh, libertarians. How could you… I suppose that one could categorize that outcome as “honest graft,” were that not such a new experience for Silicon Valley. Obviously a political question, and maybe some social media-savvy Democrat could go on the Twitter — why aren’t they doing that already? — and have it out with Elon. “Do you view your bitcoin holdings as honest graft, and if not, why not?” Could be fun!
Conclusion
“Th-th-that’s all, folks!” I wonder what tomorrow will bring!
NOTES
[1] Of Lebryk, Tankus writes: “Lebryk, who first joined the Treasury Department in 1989 and slowly worked his way up until he was its highest ranking non-political appointee, is clearly the person on earth who understands this IT apparatus the best. Having known his equivalents on far smaller and less important scales in other legacy IT systems, I can tell you that there are certainly things about this IT system that he knows and no one else does.” That’s an institutional problem, since it means Lebryk shouldn’t be going up in small planes or, for that matter, crossing the street. And speculating freely, this makes me wonder if Lebryk knows any back doors. Musical interlude.
[2] Of these cases, Brookings says “Soon after Trump assumed office, numerous lawsuits were filed aiming to shut down the DOGE initiative for violations of transparency rules related to governmental advisory entities. These lawsuits target the broader DOGE initiative rather than the specific executive order issued on January 20th, 2025.” I think that tranlstes to “these cases are moot” (assuming that the Trump administration has avoided being really sloppy, and moved all its efforts under the temporary organization).
[3] Is it possible the Silicon Valley tech bros running DOGE — itself named after a scamming coin — are projecting?
[4] I do understand that NGOs are Republican targets (and frankly they’d be doing the Democrat Party a favor by taking them down, since they’re a key element in keeping a genuine left divided and powerless). However, the numbers do not speak for themselves.
[5] CRUD is an acronym for CREATE, READ, UPDATE, and DELETE, the four basic operations of persistent storage as for the Fiscal Services data (though I don’t know the COBOL terms). I understand “access” to mean READ, meaning that changing Fiscal Services Data, via CREATE, READ, or UPDATE, is not possible. I do not, however, know the meaning of “access” in law.
