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Elon Musk’s crusade to slash US government spending suffered setbacks on Thursday after a federal judged barred the Treasury department from handing data from its payments system to outsiders and one of the billionaire’s staffers was forced to resign over racist social media posts.
Judge Colleen Kollar-Kotelly put the temporary order in place after Musk boasted that his team at the Department of Government Efficiency (Doge) was “rapidly shutting down” Treasury remittances. They apparently gained access to the system that disburses trillions of dollars, including social security payments and Medicare, each year.
Hours after the judge’s decision, 25-year-old coder Marko Elez, who was working for Doge at the Treasury, abruptly resigned after apparently racist comments from a dormant social media account were unearthed. The Wall Street Journal first reported on the historic remarks.
Elez was one of a handful of young engineers recruited by Musk’s Doge and installed in various government agencies. When asked about their roles this week, President Donald Trump called the coders “very smart” and defended their work.
Representatives of government employees and retirees had earlier this week sued to stop the sensitive data — accessed by Elez — being shared with Musk and others at Doge, arguing that such moves were “depriving them of privacy protections guaranteed to them by federal law”.
Although the US government reassured the court that only two of Doge’s emissaries, Cloud Software Group chief executive Tom Krause and Elez, had access to the sensitive system, Kollar-Kotelly pushed for an order preventing any information being shared outside the Treasury, while she considers a more permanent injunction.
As a result, Musk himself will not be able to review data pulled from the payments system.
The legal challenge comes as Treasury officials and the White House have sought to quell fears over Musk’s and Doge’s purported access to the system, and his broader authority, after the entrepreneur suggested his team was unilaterally cancelling “illegal” payments.
On Monday, Trump said Musk, who has been made a special government employee, “can’t do — and won’t do — anything without our approval”.
Press secretary Karoline Leavitt also confirmed that Musk would extricate himself from any situations where he might have a conflict: “If Elon Musk comes across a conflict of interest with [his companies’] contracts and the funding that Doge is overseeing, then Elon will excuse himself from those contracts . . . he has abided by all applicable laws.”
Doge, whose emissaries have infiltrated the networks of various government agencies, including USAID, Health and Human Services and the Department of Transportation, has been sued multiple times by groups claiming the body is circumventing various legal protections.
Separately on Thursday, a judge in Massachusetts ordered a deadline for federal employees to accept or reject a buyout package — part of a personnel reduction effort spearheaded by Musk — to be extended at least until Monday.
The White House also confirmed that only 40,000 workers had thus far accepted the offer, well short of the hundreds of thousands it had previously forecast.
Additional reporting by Steff Chávez in Washington
