By Lambert Strehter of Corrente.<\/strong><\/em><\/p>\n \u201cStupid? Shit, no, he was smart as hell.\u201d The Finn stubbed his cigarette out in a cracked ceramic Campari ashtray. \u201cJust a total fuck-up, was all.\u201d \u2013William Gibson, Count Zero<\/p>\n Readers will be familiar with friend-of-the-blog Nathan Tankus<\/a> and non-mainstream economist extraordinaire Stephanie Kelton from the MMT wars. If you\u2019re not, you should be (Tankus\u2019s blog<\/a>; Kelton\u2019s<\/a>). Both have now entered the fray over DOGE (Elon\u2019s 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\u2019s current status; it\u2019s now a \u201ctemporary organization,\u201d 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 \u2014 the Lutherans, USAID \u2014 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<\/em> be covering Elon\u2019s rampage through Twitter\u2019s innards<\/a>, suggestive though it may be for the course of DOGE, or the corruption of Silicon Valley\u2019s \u201cbetter to ask for forgiveness than permission\u201d culture, or Elon\u2019s extremely young team<\/a> of Peter Thiel-adjacent blood bags<\/a><\/em> programmers. Perhaps another time! (Adding, this might get a bit long. Sorry!)<\/p>\n Tankus: Elon Musk Wants to Get Operational Control of the Treasury\u2019s Payment System. This Could Not Possibly Be More Dangerous<\/a><\/strong><\/p>\n Setting the scene:<\/p>\n It\u2019s now not just the \u201clegal plumbing,\u201d it\u2019s the payments plumbing too. This is now also the closest thing we\u2019ve ever had to a payment system constitutional crisis.<\/p>\n So what happened? According to reporting on Friday \u2014 first at the Washington Post<\/a> and then in more detail from CNN<\/a> as well as the New York Times<\/a> \u2014 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\u2019s \u201cDepartment of Government Efficiency\u201d (DOGE) access to the operational details of the Treasury\u2019s payment system and the data it processes. In particular, Musk\u2019s DOGE team has been asking for what the New York Times reporting refers to as \u201csource code information\u201d since December and has been rebuffed. The CNN reporting specifically states that they were inquiring about the technical ability to stop payments.<\/p>\n 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\u2026.<\/p>\n 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\u2019s full willingness to cooperate with DOGE\u2019s desire to access the operational aspects of the Treasury\u2019s payment system, even to the point of overruling Lebryk, is an extremely shocking development. It implies a level of willingness to serve Trump\u2019s interests that has not previously been understood by Congress, Wall Street, or corporate America at-large. <\/p>\n However, this is consistent with internal conversations among those in the president\u2019s 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<\/strong>. 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\u2019s enemies. In the context of Bessent\u2019s 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. <\/p>\n 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 \u2018Elon Musk\u2019s Team Now Has Full Access to Treasury\u2019s Payments System.\u2019\u2026. 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 \u2018operational capabilities.\u2019 The key word is \u2018yet.\u2019<\/p>\n<\/blockquote>\n Operationally, in short form, agencies approve payments; the Bureau of the Fiscal Service cuts the checks. This architecture leads to the the key point:<\/p>\n Without political control of the payment\u2019s 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<\/strong>, they could possibly not need agency cooperation. They can just impound agency payments themselves<\/strong>. They could also possibly stop paying federal employees they have forced on paid administrative leave, coercing them to resign<\/strong>. These possibilities are what every Treasury expert I\u2019ve talked to instantly thought of the moment they read the Washington Post reporting and are incredibly alarmed about.<\/p>\n<\/blockquote>\n There\u2019s much, much more to the Tankus post (the word \u201cCOBOL\u201d 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<\/p>\n Kelton: Will the Ratings Agencies React to the Breakdown in Governance?<\/a><\/strong><\/p>\n Setting the scene:<\/p>\n Under the Constitution, once Congress appropriates funding for various programs\u2014be it Social Security, Medicaid, the Inflation Reduction Act, or Meals on Wheels\u2014it 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\u2014not Elon Musk or President Trump\u2014has 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.<\/p>\n But that clearly doesn\u2019t 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\u2019s attempt to claim sweeping powers to impound spending via executive order just last last week.<\/p>\n<\/blockquote>\n The key point:<\/p>\n So what happens if DOGE gains operational control and decides to start picking and choosing which government commitments to honor?\u2026 Alarm bells should be ringing from on high, and I can\u2019t help but wonder whether the ratings agencies\u2014Fitch, Moody\u2019s, and Standard and Poor\u2019s\u2014are 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 \u2018steady deterioration in [America\u2019s] standards of governance.\u2019 It\u2019s hard to see how they can look through this moment\u2026.[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 \u2018deterioration in the standards of governance.\u2019 It\u2019s time to acknowledge the unprecedented breach of protocol, the brazen disregard for the rule of law, and the elevated risk of default. NOTE I\u2019m not suggesting that a downgrade would cause investors to sour on US Treasuries and force the administration to back down. It\u2019s more about acknowledging the breakdown in governance and the elevated risk of voluntary defaults across the spectrum of government obligations.<\/p>\n<\/blockquote>\n Kelton\u2019s article, too, is worth reading in full.<\/p>\n DOGE is a \u201cTemporary Organization\u201d<\/strong><\/p>\n Last year \u2014 whoopsie, sorry, 22 days ago \u2014 I wrote that \u201cThe Department of Governmental Efficiency (DOGE) Lacks Legal Structure and Promised Transparency<\/a>\u201c; 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>. A week later, President Trump\u2019s Executive Order \u201cTHE PRESIDENT\u2019S \u201cDEPARTMENT OF GOVERNMENT EFFICIENCY\u201d<\/a>\u201d (quotes in the original (it\u2019s not a department)) came out:<\/p>\n 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.<\/p>\n (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 \u201cthe U.S. DOGE Service Temporary Organization\u201d. The U.S. DOGE Service Temporary Organization shall be headed by the USDS Administrator and shall be dedicated to advancing the President\u2019s 18-month DOGE agenda. The U.S. DOGE Service Temporary Organization shall terminate on July 4, 2026. <\/p>\n<\/blockquote>\n Writes Wired<\/a>:<\/p>\n A former USDS employee who spoke to WIRED on condition of anonymity called the repurposing of the Digital Service an \u201cA+ bureaucratic jiu-jitsu move.\u201d<\/p>\n<\/blockquote>\n And so it is. First, DOGE not a federal executive department, so it doesn\u2019t 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:<\/p>\n The structure evades lots of oversight\u2026. For example:<\/p>\n Freedom of Information Act (FOIA)<\/strong>: FOIA applies to federal agencies as defined in 5 U.S.C. \u00a7 551, which excludes the Executive Office of the President and its components. Since DOGE operates within the Executive Office, it is generally .<\/p>\n Administrative Procedure Act (APA)<\/strong>: The APA governs federal agencies\u2019 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\u2019s advisory role likely places it .<\/p>\n Open Meetings Requirements<\/strong>: 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.<\/p>\n Federal Register Publications:<\/strong> 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 .<\/p>\n Annual Federal Appropriations:<\/strong> DOGE\u2019s 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.<\/p>\n Other Legal Limitations:<\/strong> 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.<\/p>\n<\/blockquote>\n (Attack surfaces remain, and we\u2019ll go into some of them below.)<\/p>\n Status of Current DOGE Cases<\/strong><\/p>\n From Just Security\u2019s litigation tracker<\/a>, these are the DOGE cases:<\/p>\n The first three are FACA cases and the fourth is FOIA. Neither FACA nor FOIA apply to temporary organizations in the executive department.[2]<\/p>\n Sidebar: Fact Set<\/strong><\/p>\n Despite all the hue and cry, DOGE\u2019s case for enormous amounts of fraud that can only be rooted out via handing them control over the nation\u2019s 1.27-billion-yearly-payment facility<\/a> is strikingly weak (not least because the Treasury has existing anti-fraud facilties for the agencies to use<\/a>[3]). For now, relax and enjoy the stupid, but I will use these cases below to present possible attack surfaces. <\/p>\n Terrorists<\/em>. Elon writes:<\/p>\n Does Elon think we are little children of six? How could we be funding Al Qaeda and the Taliban<\/a> if we didn\u2019t cut them checks? (More seriously, Tankus describes the architecture; the agencies vet the payees. Seemingly, Elon doesn\u2019t know this; at best, he\u2019s got his future, political goal confused with how payments work now.)<\/p>\n The Lutherans<\/em>:<\/p>\n Now it\u2019s the \u201cLutheran\u201d faith (this use of \u201creligion\u201d as a money laundering operation must end): <\/p>\n Lutheran Family Services and affiliated organizations receive massive amounts of taxpayer dollars, and the numbers speak for themselves. These funds, total BILLIONS of American\u2026 pic.twitter.com\/IaTG2uNXRB<\/a><\/p>\n \u2014 General Mike Flynn (@GenFlynn) February 2, 2025<\/a><\/p>\n<\/blockquote>\n <\/center> <\/p>\n We\u2019ll 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 \u201cspeak for themselves\u201d only to the extremely credulous. Here let me note some extremely coverage, from Bloomberg of all places<\/a>:<\/p>\n \u201cThe corruption and waste is being rooted out in real-time,\u201d Musk posted on X, saying officials reporting to his so-called Department of Government Efficiency are \u201crapidly shutting down\u201d payments to a Lutheran charity.<\/p>\n<\/blockquote>\n DOGE is a \u201ctemporary organization.\u201d How do genuine government \u201cofficials\u201d report to it? As for \u201crapidly shutting down,\u201d I guess we\u2019ll have to see[4].<\/p>\n USAID<\/em>. This is quite a volatile situation. From Yahoo News<\/a>: <\/p>\n Staffers of the U.S. Agency for International Development were instructed to stay out of the agency\u2019s Washington headquarters, and yellow police tape and officers blocked the agency\u2019s lobby on Monday, after billionaire Elon Musk announced President Donald Trump had agreed with him to shut the agency.<\/p>\n USAID staffers also said more than 600 additional employees had reported being locked out of the agency\u2019s computer systems overnight. Those still in the system received emails saying that \u201cat the direction of Agency leadership\u201d the headquarters building \u201cwill be closed to Agency personnel on Monday, Feb. 3.\u201d The agency\u2019s website vanished Saturday without explanation.<\/p>\n<\/blockquote>\n On the coverage, note the lack of agency in \u201cinstructed by.\u201d Note the weird agency in \u201cElon Musk announced President Donald Trump\u2026.\u201d The cops block the lobby because Elon said<\/em> something? Really? Meanwhile, the Democrats bestir themselves:<\/p>\n Members of Congress attempt to enter USAID pic.twitter.com\/8YJSLOkEgx<\/a><\/p>\n \u2014 Aaron Fritschner (@Fritschner) February 3, 2025<\/a><\/p>\n<\/blockquote>\n <\/center> <\/p>\n Yes, the Democrats rush to defend the cover story-generating portion of the inteligence community\u2019s premier color revolutions fomenter.<\/a> Hilarity ensues. That said, USAID is an agency established by Congress; Elon can\u2019t just abolish it. <\/p>\n Possible DOGE Attack Surfaces<\/strong><\/p>\n Enforce \u201cAccess\u201d<\/em>: Previously reputable Treasury Secretary <\/a>Bessent seems not to have sold his entire<\/em> soul:<\/p>\n 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\u2019s DOGE group that operates out of the United States Digital Service. One person familiar with the effort said Krause\u2019s 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.<\/p>\n \u201cThe secretary\u2019s approval was contingent on it being essentially a read-only operation,\u201d[5] the person said.<\/p>\n<\/blockquote>\n Fine, but anybody who takes Elon\u2019s word on this, or the word of any of his minions, should go talk to the SEC<\/a>. Ron Wyden\u2019s sternly worded letter to Bessent was in fact quite weak:<\/p>\n 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\u2019s payment systems<\/p>\n<\/blockquote>\n First, he gave Bessent a week to respond. Why not a day? Second, the issue [lambert pounds head on desk] isn\u2019t Chinese spies and hackers; it\u2019s DOGE itself.<\/p>\n The Democrats should find somebody who actually wants to govern, and make sure that Treasury data is not changed<\/em>. Maybe some clever lawyer could craft an injunction.<\/p>\n Privacy Violations<\/em>. From Privacy Act of 1974, as amended, 5 U.S.C. \u00a7 552a<\/a>:<\/p>\n (b) CONDITIONS OF DISCLOSURE.\u2014No 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\u2014<\/p>\n (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;<\/p>\n (3) for a routine use as defined in subsection (a)(7) of this section and described under subsection (e)(4)(D) of this section;<\/p>\n (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;<\/p>\n (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;<\/p>\n (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;<\/p>\n (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;<\/p>\n (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;<\/p>\n (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;<\/p>\n (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;<\/p>\n (11) pursuant to the order of a court of competent jurisdiction; or<\/p>\n (12) to a consumer reporting agency in accordance with section 3711(e) of title 31.<\/p>\n<\/blockquote>\n IANAL, but if Flynn\u2019s 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.<\/p>\n Security Violations<\/em>. Trump\u2019s executive order establishing DOGE reads:<\/p>\n USDS shall adhere to rigorous data protection standards.<\/p>\n<\/blockquote>\n What does that even mean<\/em>? Surely there\u2019s some sort of standard here? Does \u201crigorous,\u201d for example, mean the same baseline as Fiscal Services? Lower? Higher? I assume lower, because otherwise why not just say \u201cthe same as Fiscal Services\u201d? Perhaps some aggressive Democrat could find out.<\/p>\n Impersonating Federal Officer<\/em><\/p>\n 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 \u2014 as many DOGE types have been said to be \u2014 I\u2019d be even more surprised if they can do that.<\/p>\n Elon\u2019s Role, and His Conflicts<\/em><\/p>\n First, I\u2019m having a hard time fitting Elon into the temporary organization org chart. What exactly is Elon\u2019s role? Is he, for example, a one-man advisory committee, and hence subject to FACA? Some clever lawyer should find out.<\/p>\n Second, when asked if the US Budget should go \u201con the blockchain,\u201d Elon answered \u201cyes<\/a>.\u201d I have it on good authority that this a really bad idea, but Elon\u2019s 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<\/sub> Oh, libertarians. How could<\/em> you\u2026 I suppose that one could categorize that outcome as \u201chonest graft<\/a>,\u201d 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 \u2014 why aren\u2019t they doing that already? \u2014 and have it out with Elon. \u201cDo you view your bitcoin holdings as honest graft, and if not, why not?\u201d Could be fun!<\/p>\n Conclusion<\/strong><\/p>\n \u201cTh-th-that\u2019s all, folks!\u201d I wonder what tomorrow will bring!<\/p>\n NOTES<\/strong><\/p>\n [1] Of Lebryk, Tankus writes: \u201cLebryk, 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.\u201d That\u2019s an institutional problem, since it means Lebryk shouldn\u2019t 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<\/a>. Musical interlude<\/a>.<\/p>\n [2] Of these cases, Brookings says \u201cSoon 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.\u201d I think that tranlstes to \u201cthese cases are moot\u201d (assuming that the Trump administration has avoided being really sloppy, and moved all its efforts under the temporary organization).<\/p>\n [3] Is it possible the Silicon Valley tech bros running DOGE \u2014 itself named after a scamming coin \u2014 are projecting?<\/p>\n [4] I do understand that NGOs are Republican targets (and frankly they\u2019d be doing the Democrat Party a favor by taking them down, since they\u2019re a key element in keeping a genuine left divided and powerless). However, the numbers do not<\/em> speak for themselves.<\/p>\n [5] CRUD is an acronym for CREATE, READ, UPDATE, and DELETE, the four basic operations<\/a> of persistent storage as for the Fiscal Services data (though I don\u2019t know the COBOL terms). I understand \u201caccess\u201d to mean READ, meaning that changing<\/em> Fiscal Services Data, via CREATE, READ, or UPDATE, is not possible. I do not, however, know the meaning of \u201caccess\u201d in law.<\/p>\nDangerous Oligarchs Grab Everything<\/a><\/del> \u201cDepartment of Government Efficiency\u201d (quotes in the executive order<\/a> that gave it horrid birth, since it\u2019s not really a department). <\/p>\n\n
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