Coalition of States Files Lawsuit Against Elon Musk's Access to Government Payment Systems

A coalition of mostly Democratic-led US states has filed a lawsuit to prevent a Trump administration panel, led by billionaire Elon Musk, from accessing government systems used to process trillions of dollars in payments.

The 19 states, spearheaded by New York Attorney-General Letitia James, a Democrat, assert that Musk’s Department of Government Efficiency (DOGE) lacks the legal authority to access the US Department of Treasury systems, which contain personal information of millions of Americans.

The lawsuit, filed in Manhattan federal court on Friday, alleges that Musk and his team could disrupt federal funding for essential services such as health clinics, preschools, climate initiatives, and other vital programmes, arguing that Republican President Donald Trump could manipulate this information to further his political agenda.

The attorneys-general highlighted that DOGE's access presents significant cybersecurity risks, endangering vast amounts of funding for the states and their residents.

In response to Trump's appointment of Musk to head DOGE with the mandate of identifying fraud and waste in the government, concerns have been raised by Democrats and advocacy groups, who argue that Musk is overreaching by attempting to dismantle critical government agencies and dismiss federal workers on a large scale.

The lawsuit names both Trump and the Treasury Department as defendants. James was joined by attorneys-general from California, Illinois, Massachusetts, Washington, and New Jersey, among other states.

In a separate lawsuit filed by unions claiming Musk's team violated privacy laws by accessing payment systems, a federal judge ordered the Treasury to restrict access to two “special government employees” with read-only privileges.

Additional lawsuits are underway to prevent DOGE from accessing data at the US Department of Labor and the Department of Education.

Treasury Secretary Scott Bessent, appointed by Trump, stated this week that Musk would not have control over the department's payment system and that any decisions concerning payment suspensions would be made by other agencies.

In the latest lawsuit, New York and the other states argue that granting DOGE access to the payment system infringes a federal law that requires agencies to conduct “privacy impact assessments” prior to utilising technology that gathers or disseminates sensitive information, and unlawfully encroaches upon Congress's powers.

The states have also accused Trump of neglecting his constitutional obligation to faithfully execute federal laws, among various other claims. The lawsuit seeks a temporary restraining order to prohibit DOGE from accessing Treasury systems until further litigation is resolved.