DOGE2025 Is Getting the Catastrophic De-Ba’athification They Demanded

There are two stories that attracted a lot of attention last week that offer the same lesson.

The first story is the report that after firing a bunch of people in charge of securing nuclear weapons, Trump’s minions have tried to rehire them, which was first reported by CNN.

Trump administration officials fired more than 300 staffers Thursday night at the National Nuclear Security Administration — the agency tasked with managing the nation’s nuclear stockpile — as part of broader Energy Department layoffs, according to four people with knowledge of the matter.

Sources told CNN the officials did not seem to know this agency oversees America’s nuclear weapons.

An Energy Department spokesperson disputed the number of personnel affected, telling CNN that “less than 50 people” were “dismissed” from NNSA, and that the dismissed staffers “held primarily administrative and clerical roles.”

The agency began rescinding the terminations Friday morning.

The other is that the USAID is trying to prevent anyone still at the now-shuttered agency from telling the press that the life-saving grants for which Marco Rubio issued waivers have not actually been reauthorized to operate, which Greg Sargent focused on after John Hudson disclosed a memo making the order.

new internal memo circulating inside the U.S. Agency for International Development neatly captures this split. The Washington Post reports that the memo warns USAID employees not to communicate with the press about the shocking disruptions in humanitarian assistance that are being caused by the Trump-Musk attack on the agency, which are already producing horrific consequences. The memo said this transgression might be met with “dismissal.”

The memo claims to be correcting a “false narrative in the press” about the disruptions to that assistance. It notes that Secretary of State Marco Rubio last month issued a waiver to “lifesaving humanitarian assistance,” allowing it to continue despite the Trump-Musk freeze in agency spending. This has meant that this assistance has “continued uninterrupted and has never paused,” the memo claims, while warning recipients against any “unauthorized external engagement with the press.”

Now, at one level, this chaos is happening because many of the people enacting these cuts are DOGE boys with no idea what they’re looking at. Don Moynihan (who is an indispensable source on the policy issues of all this) uses the nukes case as one example to make the same point: because ignorant people were making the firing decisions, they eliminated a slew of critical positions.

Musk’s management style when it comes to downsizing has been to cut to the bone, and then hire back if he fired too many. This philosophy might make sense if you are running a social media company where its not a big deal if Twitter goes down for a couple of hours. It makes less sense where the a) failure of government systems has big and sometimes irrevocable costs, and b) it is not easy to replace expertise once you have eliminated it. On the latter point, many public jobs take time to develop knowledge of the policy domain, organizational practice and tasks. Those are not qualities that are easy to rebuild if you just spent a year training a new employee who has now been fired.

[snip]

Let me note that I feel like this lesson should not be necessary. We should not need to spell this one out. One measure of the collapse of the Soviet Union was that they could no longer afford to keep staff to secure nuclear warheads. Why would the US voluntarily downgrade it’s own capacity to manage its nuclear arsenal? And yet, DOGE fired 1 in 5 federal staff that manage the nation’s nuclear stockpile.

Have you heard about the National Nuclear Security Administration before? Probably not. It’s one of those jobs that we hopefully never need to think about, because if we do that means something has gone badly wrong. But it’s also one of those jobs that someone needs to ensure is staffed appropriately to make sure something does not go badly wrong. As a citizen, its fine if you are not aware of NNSA, but bear in mind that when the right attacks wasteful bureaucracy, these sort of invisible agencies performing important tasks are some of what they are talking about.

Apparently DOGE does not know much about the NNSA either. To be fair, when you have zero experience of government, why should you? But if you have zero experience of government, you should also probably not be in the position of firing 300 of the guys who take care of the nukes. CNN reported that the fired staffers included “staff who are on the ground at facilities where nuclear weapons are built. These staff oversee the contractors who build nuclear weapons, and they inspect these weapons.”

After enough members of Congress got upset, the firings were rescinded. Just one problem. DOGE made the firings effective the day they were received (no notice, not severance), immediately shutting down access to government emails. And they did not have contact information to tell NNSA employees they were unfired.

[snip]

Under Biden, the IRS had received long-awaited and much needed funds that allowed it to rebuild after a period of sustained downsizing, and was becoming more effective.
The IRS represented a very simple test for the credibility of DOGE. Was it really interested in efficiency and state capacity? If so, you support the tax enforcement, the biggest return on investment in government, generating somewhere between $5-9 for every additional $1 spent on enforcement.

Or did DOGE want to minimize parts of the state that bothered billionaires?

We have our answer. In the middle of tax season, the IRS was told to lay off thousands of workers hired as part of the rebuilding project.

Part of the DOGE hype is that after they fire everyone, they will figure out better ways to do the job using, uh, AI and such. But there is no second act where it gets better. They don’t have a plan to fix what they are breaking because they don’t understand or care about the damage they are doing. Breaking government is the point. It is not as if DOGE has some magical IRS plan up their sleeve. There is no plan.

The story is not just that these DOGE boys have no idea what they’re looking at, being so incompetent that the word “nuclear” doesn’t even spark their interest.

It’s that after ideologues fire competent bureaucrats, they’re often left without a way to turn the bureaucracy back on again when they realize they actually needed it.

Take the first example, the people ensuring the security of America’s nuclear arsenal. As NBC followed up, after Congressional lobbying and a press campaign convinced someone to reverse the NNSA firings, the DOGE boys had no easy way to contact those who had been fired to order them to return to work.

National Nuclear Security Administration officials on Friday attempted to notify some employees who had been let go the day before that they are now due to be reinstated — but they struggled to find them because they didn’t have their new contact information.

In an email sent to employees at NNSA and obtained by NBC News, officials wrote, “The termination letters for some NNSA probationary employees are being rescinded, but we do not have a good way to get in touch with those personnel.”

AP has a follow-up noting — among other things — that the key jobs were in Texas, Eastern Washington, South Carolina, and Tennessee. These are not just crucial jobs for national security, but many of them represent job losses in Republican areas.

Something similar has happened at USAID.

It shouldn’t have, because there, one key player shutting down the agency, Pete Marocco, actually worked at USAID in the first Trump term. The declaration he has submitted in multiple suits admitted he shut down already-committed funds on his own authority, without Marco Rubio’s involvement. He described that after he started firing administrators, administrators were unable to answer his questions, which he deemed insubordinate rather than just a natural consequence of firing the people who might be able to answer his questions. Nevertheless, his inability to get answers is what he used to justifying shutting everything down.

As a former USAID staffer, Marocco should have the competence to know better — but ProPublica describes why his own past insubordination may be a better explanation for his war against the agency.

The flood of USAID lawsuits has produced an associated flood of sworn declarations that describe, from the perspective of people involved, what is really happening.

For example, as part of a suit by the American Foreign Services Association, a program officer described that, even though she supervises 30 emergency food assistance programs, she had not (as of February 7) been able to get a waiver for any of them, resulting in food rotting in warehouses.

For example, while it was announced that most USAID funding would be frozen, a waiver is supposed to be available for life-saving humanitarian assistance, which would apply to the more than 30 emergency food assistance programs I support. Without my knowledge, the partners I manage, nearly all of which work on lifesaving, emergency food assistance, were sent email notices from their Agreement Officers directing them to fully or partially stop their work. As an Agreement Officer Representative for these awards, I am required to be copied on any communications, which never happened. While I tried to obtain a waiver for the programs I manage, there was no guidance on the process by which our patterns could obtain a waiver and none of the programs were ever formally approved to keep running. I am skeptical that the waiver actually exists. At this point, if a waiver does in fact exist, the implementation has been so chaotic with so many employees either furloughed or on administrative leave that as a practical matter it isn’t available to those who need it. While the programs I manage are under a stop work order, food commodities sit in warehouses rotting and scheduled food distributions to vulnerable populations do not happen and children miss follow-up appointments for treatment of severe malnutrition.

A contracting officer’s declaration in the same suit described the conflicting management orders, the lack of access to experts, and the technical access limits that made it impossible to implement the waiver program.

As a Contracting Officer, some of the awards on this list were perplexing and the sudden push to do this while nearly all of our counterparts with technical knowledge about where awards were in the waiver process and what the programmatic purpose of each award were locked out of the network and suspected to be on administrative leave.

There was an approved tab with one single PEPFAR award despite the fact that the Agency has many different PEPFAR awards and we were told a waiver had been granted for PEPFAR and Emergency Food Assistance. There were no Emergency Food Assistance awards on the approved tab. Concerns were raised by Contracting Officers and Regional Legal Officers alike who replied all to Matthew’s email with concerns. We asked for clarification on the reason for the contract terminations and for confirmation that OAA had consulted with OMB and made a determination consistent with the Executive Order on realigning foreign aid. If these awards had not received such a determination, the termination would be in violation of the executive order. We received no reply to those questions. A contracting officer replied all to the email asking if Congressional notification had been made on these terminations and noted that Congressional notification is required when a termination will involve reduction in employment of 100 or more contractor employees which these actions would likely result. It was also asked if USAID had taken steps to adhere to our Congressionally authorized and funded responsibilities on these terminations.

These emails received no reply from OAA leadership and our working level supervisors urged us to proceed with the terminations and meet the deadlines.

Subsequently at approximately 6PM that same day, Nadeem Shah, Deputy Director of Washington Operations for OAA, sent around an email entitled “PLEASE PAUSE ALL AWARD TERMINATIONS” asking staff to hold off on all award terminations in Matthew’s previous email.

[snip]

When my technical bureau’s access was supposedly restored yesterday, we quickly discovered that they do not have access to our Agency File system called ‘ASIST’ nor do they have access to our financial system in direct violation of the TRO issued the night of February 7, 2025. This makes it incredibly hard for them to provide programmatic information to help with the program review process. To date, the technical bureaus have not had any opportunity to provide any inputs or relevant information for the programmatic review. I am extremely concerned that Agency and State Dept leadership do not have the relevant information needed to thoroughly evaluate programming

Importantly, this seems to suggest that PEPFAR — one of the programs that Republicans have vociferously championed — was only partly restored because someone didn’t understand the multiple programs it involves.

Another staffer in the same AFSA lawsuit, a controller, described how bureaucratic and technical problems have prevented people from disbursing funds even for the programs that have gotten waivers.

9. On February 3, the situation changed yet again. As of that date, every time I tried to hit the “certify” button to begin a disbursement, I received an error message stating that I did not have authority to proceed. I contacted Phoenix Security to inquire if there was a technical problem in the system and was told “on Friday January 31, we were instructed to remove the ability to certify payments.” They did not indicate who instructed them, only stating “Unfortunately I am unable to reverse this decision.”

10. On February 5, all USAID controllers received another diplomatic cable indicating that USAID personnel could no longer process payments themselves but must request approval from a Senior Bureau Officer before forwarding the payment packages for processing. However, as of February 11, nobody can agree on who is the appropriate SBO for USAID payments and the State Department hasn’t processed a single payment based on the new procedure.

11. As of February 9, when I try to log into Phoenix, I receive a new error message stating that my sign-in attempt has failed. I have even less access to Phoenix after the February 7 court order than I did before that date.

12. I have been in touch with many colleagues and all report the same experience. To my knowledge, worldwide there are no USAID financial management personnel, including controllers, that can access Phoenix.

13. I have not been able to process payments under any of the waivers included in the January 24 cable, including legitimate expenses incurred prior to January 24 under existing awards or those for employee operating expenses. Though the waivers exist on paper, in reality all USAID funds have remained frozen because of technological barriers added to the system, I don’t know by whom. Phoenix will not let us disburse anything.

In a different USAID-related lawsuit by contract recipients, the head of a faith-based non-profit, Mark Hetfield, described how attempts to get waivers looked in practice.

11. On February 3, 2025, HIAS also received a revised “Notice of Suspension” for its work in Chad from PRM via email stating that HIAS should stop all work under the grant unless exempted from suspension as “existing life-saving humanitarian assistance” defined by the Department as “core life-saving medicine, medical services, food, shelter, and subsistence assistance, as well as supplies and reasonable administrative costs as necessary to deliver such assistance.” See February 3, 2025, Letter from Philip Denino, PRM Grants Officer, annexed to this declaration as Exhibit F. In his cover email, Mr. Denino stated that “PRM will follow up shortly to set up a meeting to discuss the specific HIAS programming in Chad that falls under the exemption for life-saving humanitarian assistance.” See February 3, 2025, Email from Philip Denino, annexed to this declaration as Exhibit G. That meeting with PRM took place the next day, February 4, during which HIAS and PRM staff discussed what activities would qualify as “lifesaving humanitarian assistance.” PRM asked HIAS to provide an overview of HIAS’ activities conducted in Chad pursuant to the award that HIAS deemed exempt from the 90-day suspension. HIAS prepared and sent the requested overview. See February 7, 2025, Email from Guillermo Birmingham to Philip Denino, annexed to this declaration as Exhibit H. However, after the meeting, Mr. Denino sent a follow up email indicating they he had been “given guidance that PRM will not be providing any additional information regarding the application of the waivers/exemptions to activities” and that he could only refer us to the revised Suspension Memo to guide us in resuming activities. See February 4, 2025, Email from Philip Denino to Guillermo Birmingham, annexed to this declaration as Exhibit I. Nor would we be able to receive funds to continue work under a waiver/exemption since all federal government payment portals were and are not functioning, making the purported waiver/exemption process cited in PRM’s revised Notice of Suspension useless.

12. On February 10, HIAS’ Chief Financial Officer again asked PRM for guidance on what would qualify as an emergency exemption from the indefinite suspension of PRM funds. In response, PRM’s Grants Officer stated, “I can’t provide guidance. It was determined much higher than me.” HIAS’ CFO then expressed concern to PRM that the lack of guidance coupled with the inability of aid organizations to access payments is making it impossible for organizations to provide the lifesaving humanitarian services identified by PRM as exempt in their revised Suspension Notice. See February 10, 2025, Email exchange between Guillermo Birmingham and Philip Denino, annexed to this declaration as Exhibit J.

He included a stack of backup, including the email instructing that Comptrollers were instructed not to provide any guidance on what was considered life-saving programming covered by the waivers.

Ultimately, USAID simply refused to tell grant recipients whether they had received a waiver or not, and if so for which parts of their programming. And it wouldn’t matter anyway because the computer systems on which it all runs are not functioning. State doesn’t want employees telling the press that life-saving grants haven’t been resumed, because Marco Rubio doesn’t want to confess to Republicans that he failed to deliver what he promised them.

Whether intentional at USAID or the inevitable outcome of arbitrary ignorance, the effect is the same.

It’s not just that the DOGE2025 attack on government has destroyed critical expertise. But absent that expertise, Trump’s minions are finding it difficult to reverse the ill effects of their initial assault, because the initial damage they do to both systems and expertise makes it far harder to reverse their initial failures.

Last July, JD Vance envisioned this process as a de-Ba’athification, which he imagined was targeted at a caricature of liberal culture, but which in reality targeted the civil service. Someone who served in Iraq really did set out to recreate the same insanely stupid policy decision that made Iraq a decade-long clusterfuck — he really did set out to launch that same kind of attack on his own government.

We’ve seen this movie before. It was, perhaps, Americas biggest failure ever.

Emil Bove’s Missing Documents

Imagine you’re Judge Dale Ho.

You’re presiding over the Eric Adams case, that of his co-conspirator Erden Arkan, and have gotten notice of another co-conspirator, Mohamed Bahi, as a related case (meaning that Bahi is likely supposed to plead guilty before you in coming days — what was intended as a last step before superseding Adams with obstruction).

The Adams case has blown up very publicly. The prosecution team has been withdrawn from the case. But even before that, the Acting Deputy Attorney General has requested you dismiss the case, without prejudice. You know Bove’s pulling a fast one. But technically, the only things before you are the Nolle Prosequi request and the withdrawal motion.

What do you do? Even beyond the question of whether you grant the request to dismiss without prejudice (Bove’s ask), you dismiss with prejudice (perhaps the easiest and most legally justifiable thing to do), or you muck things up, what do you do to get there?

Four documents pertaining to this blow up (in addition to the ones filed before Judge Ho) were released publicly last week. Here’s the purpose they ostensibly serve:

  • February 10: Emil Bove tells Danielle Sassoon to dismiss the case, without prejudice
  • February 12: Danielle Sassoon asks Pam Bondi to meet
  • February 13: Bove responds to Sassoon, accepting her resignation
  • February 13: Hagen Scotten resigns

But the documents do more. All four of them weigh in on two key paragraphs that made it into the Nolle Prosequi letter: the two stated reasons for dismissing the case against Adams, which look like this in the dismissal request:

5. In connection with that determination and directive, the Acting Deputy Attorney General concluded that dismissal is necessary because of appearances of impropriety and risks of interference with the 2025 elections in New York City, which implicate Executive Order 14147, 90 Fed. Reg. 8235. The Acting Deputy Attorney General reached that conclusion based on, among other things, review of a website2 maintained by a former U.S. Attorney for the Southern District of New York and an op-ed published by that former U.S. Attorney.3

6. In connection with that determination and directive, the Acting Deputy Attorney General also concluded that continuing these proceedings would interfere with the defendant’s ability to govern in New York City, which poses unacceptable threats to public safety, national security, and related federal immigration initiatives and policies. See, e.g., Executive Order 14159, 90 Fed. Reg. 8443; Executive Order 14165, 90 Fed. Reg. 8467. The Acting Deputy Attorney General reached that conclusion after learning, among other things, that as a result of these proceedings, Adams has been denied access to sensitive information that the Acting Deputy Attorney General believes is necessary for Adams to govern and to help protect the City.

Public comments from Damian Williams that barely mention Adams create an appearance of impropriety, Bove claims, and the prosecution would interfere with Adams’ ability to govern New York, which Bove suggests (by citation to two of Trump’s immigration crackdown Executive Orders) consists primarily in chasing migrants.

Again, the other letters are not formally before Ho (yet). But Ho has presumably read Hagen Scotten’s take on these two excuses, which labels the first as a pretext and the second as coercion.

In short, the first justification for the motion—that Damian Williams’s role in the case somehow tainted a valid indictment supported by ample evidence, and pursued under four different U.S. attorneys is so weak as to be transparently pretextual. The second justification is worse. No system of ordered liberty can allow the Government to use the carrot of dismissing charges, or the stick of threatening to bring them again, to induce an elected official to support its policy objectives.

Mind you, Bove has invented something in his immigration excuse — that “Adams has been denied access to sensitive information that the Acting Deputy Attorney General believes is necessary.” He actually ordered Sassoon to, “take all steps within your power to cause Mayor Adams’ security clearances to be restored,” in his first letter (which, again, is not formally before Ho). He complained, again, that “Mayor Adams has been denied a security clearance that limits his access to details of national security issues in the City he was elected to govern and protect” in his response.

It’s transparent bullshit. While it may be the case that the Biden Administration had limited sharing of classified information with Adams after his indictment for allegedly taking undeclared gifts from a foreign government [!!!], that’s entirely the prerogative of the President, as Trump has made clear with his hasty grant of security clearance to people manifestly unsuited and his festival of security clearance removals since, first 51 spooks, then Joe Biden himself, and then Tish James and Alvin Bragg, among others. Pretty nutty that Bove says that Eric Adams can’t be prosecuted because it means he can’t see sensitive information when Trump has arbitrarily withheld that very same sensitive information from New York’s Attorney General and the District Attorney, huh?

It’s another pretext.

Ho can easily dismiss Bove’s first rationale — the appearance of impropriety — because (as Sassoon noted) he already did, in a ruling on one of Adams (and Elon Musk) attorney Alex Spiro’s serial claims that the government was leaking grand jury information.

One additional filing bears mention. On January 18, 2025, Mayor Adams submitted a letter accusing the former U.S. Attorney for the Southern District of New York of violating Local Criminal Rule 23.1 through statements made in an op-ed published on January 16 and on his “new website.” See Letter, Jan. 18, 2025, ECF No. 99 (“Jan. 18 Letter”). The Mayor states that this evidence “should be considered by the Court when ruling on Mayor Adams’s Renewed Motion for an Evidentiary Hearing and for Sanctions Including Dismissal.” Id. at 3. Having reviewed the submission and the evidence referenced within it, the Court concludes that it does not change the Court’s analysis. Neither Mr. Williams’s op-ed itself nor the media it incorporates by reference so much as allude to the grand jury proceedings that led to Mayor Adams’s indictment, let alone disclose protected information from those proceedings. Rule 6(e) is not implicated by the materials, and they do not substantiate Mayor Adams’s claim that the Government has disclosed grand jury information in violation of the Rule.5

5 Although Mayor Adams does not request relief under Local Rule 23.1, the Court notes that, after carefully reviewing Mr. Williams’s op-ed, the op-ed does not contain any statements that run afoul of the Rule’s prohibitions. In the op-ed, Mr. Williams provides hyperlinks to several prosecutions brought during his tenure as U.S. Attorney, including those of federal and state elected officials, but none concern Mayor Adams. In fact, the majority of the statements in the oped that Mayor Adams claims are problematic concern New York State rather than New York City politics. For example, Mayor Adams highlights Mr. Williams’s statements that “[t]he ability to raise obscene sums of money for a campaign is precisely the wrong bottleneck to elected office,” and that “[i]t reeks of pay-to-play corruption and is offensive to most New Yorkers . . . ” Jan. 18 Letter at 2 (quoting Williams’s op-ed). But those sentences are found in a paragraph lamenting the ability of candidates “to raise money from individuals or entities with business before the state,” opining that “[t]he state’s new matching funds program is woefully inadequate,” and arguing in favor of “a truly transformative public financing system for state elections. . . ” Id. (emphases added). They do not appear to be directed at New York City politics generally or at this case specifically.

There is one sentence in the op-ed stating that “[t]he public reporting alone paints a picture” that “America’s most vital city is being led with a broken ethical compass,” id. at 1, which could plausibly be read to be a reference to Mayor Adams (among others). This particular statement, however, “do[es] not cross the line drawn by [Local] Rule 23.1 in the sense that [it] do[es] not, by [itself], constitute opinions as to the Defendant[’s] guilt, and [is] not otherwise the type of statement[] proscribed by the rule.” United States v. Smith, 985 F. Supp. 2d 506, 539 (S.D.N.Y. 2013) (citing Local Rule 23.1(d)). Nor does the statement “go[] beyond the public record.” Local Rule 23.1(b). Of course, “[i]t is essential that prosecutors respect both the power of their words and their office, and ensure that their public comments are carefully tailored solely to further valid law enforcement interests and to steer far clear of violating a defendant’s fundamental right to a fair trial.” Id. at 541. Here, the Court finds that Mr. Williams has not violated those duties.

The arrogance! Bove is telling a judge he has to dismiss an indictment, in part, because Bove asserts as true something that Ho has already said is not true!

But Ho will have to, without more, treat Bove’s second excuse — Adams’ need to do his job to keep NYC safe from migrants — with a presumption of regularity.

Unless and until those other letters alleging this is a quid pro quo come before him.

Sassoon’s letter, which I assume Ho has read, did more than rebut Bove’s thin pretexts. It:

She also invoked Judge Ho, twice by function — citing Judge Ho’s treatment of Spiro’s serial claims of leaks and his specific focus on Williams’ actions (linked above) and reviewing how he had granted Adams’ own request with regards to trial timing. Then she invoked Judge Ho by name, predicting that he would do a “searching inquiry” on this case.

The assigned District Judge, the Honorable Dale E. Ho, appears likely to conduct a searching inquiry in this case. Notably, Judge Ho stressed transparency during this case, specifically explaining his strict requirements for non-public filings at the initial conference. (See Dkt. 31 at 48-49). And a rigorous inquiry here would be consistent with precedent and practice in this and other districts.

In support, she cited this admonition from Ho, in response to seeming attempts to communicate directly with chambers last fall and in the process hide public court hearings.

I want to be clear that in the future, if there are requests to change a certain date, or to have a certain date, I should say, you’ll stick to what you request. If you need a change, you’ll file it on ECF, not via email to chambers. I’ll only consider it if you explain why there’s good cause in a single submission for a change in the date. If you don’t, I’ll deny it on that basis alone. I just want to make sure that counsel understands that and see if there are any questions from counsel as to those instructions.

[snip]

THE COURT: One other guideline that I want to hit, which is with respect to the presumption of public access to documents. Now I understand there may be CIPA issues involved in this case and we’ll take those as they come, but I just want to remind counsel that there’s a presumption of public access to judicial documents, and this is obviously a case of significant public interest. Other than what you can, without court approval, file in redacted or sealed form under the local rules, things like personal identifying information, financial account numbers and the like, I expect requests for redaction of documents to be narrowly tapered.

And just to go over the rules here for the procedures, I should say, if it’s necessary to file a sealed or redacted document, you have to file a letter motion seeking to redact or seal that document specifying the reasons for such sealing or redaction and citing authority that those reasons can justify overcoming the presumption of public access and then file their own redacted documents under seal, which will remain temporarily sealed until the Court resolves the motion to redact or seal the documents, and if it’s appropriate, file a redacted version of those documents on the public docket.

So Sassoon cited “the Court” several times to lay out aspects of the record that Bove got wrong, and then she invoked Judge Ho by name, effectively saying, “Hey Judge Ho, remember that you have ordered both parties in this case to make all documents public? You might want to do that here.”

Now, there are obvious documents we’d all like to see that, if these other documents are formally aired in this case, I expect Judge Ho to request, starting with the notes someone from SDNY took at a January 31 hearing. Bove also described written submissions from prosecutors and Adams’ team in his response and a February 3 memo from SDNY that, he describes, denied a quid pro quo. He also claims Sassoon, “acknowledged previously in writing” that there was no quid pro quo, which may be that February 3 memo. And there are all the letters that are public but not formally before him.

Again, Judge Ho may demand all that if and when he begins to look closely.

But there’s another document that is missing, conspicuously so.

Bove’s Nolle Prossequi motion describes that Adams has consented to dismissal, but he does not include it.

Through counsel, Defendant Eric Adams has consented in writing to this motion and agreed that he is not a “prevailing party” for purposes of the Hyde Amendment. See P.L. 105- 119, § 617, 111 Stat. 2440, 2519; 18 U.S.C. § 3006A note.

This is, quite frankly, either insane or rank incompetence. There is no way any judge, former ACLU voting rights lead or not, would accept a dismissal without prejudice without seeing that documented. It may be that Adams will file notice of his consent on Monday (Mike Flynn filed his own notice of consent five days after Bill Barr filed to dismiss the indictment), but Bove had something in writing on Friday.

Mr. Bove specifies that Adams must consent in writing to dismissal without prejudice. To be sure, in the typical case, the defendant’s consent makes it significantly more likely for courts to grant motions to dismiss under Rule 48(a). See United States v. Welborn, 849 F.2d 980, 983 (5th Cir. 1988) (“If the motion is uncontested, the court should ordinarily presume that the prosecutor is acting in good faith and dismiss the indictment without prejudice.”). But Adams’s consent— which was negotiated without my office’s awareness or participation—would not guarantee a successful motion, given the basic flaws in the stated rationales for dismissal. See Nederlandsche Combinatie, 428 F. Supp. at 116-17 (declining to “rubber stamp” dismissal because although defendant did not appear to object, “the court is vested with the responsibility of protecting the interests of the public on whose behalf the criminal action is brought”). Seeking leave of court to dismiss a properly returned indictment based on Mr. Bove’s stated rationales is also likely to backfire by inviting skepticism and scrutiny from the court that will ultimately hinder the Department of Justice’s interests. In particular, the court is unlikely to acquiesce in using the criminal process to control the behavior of a political figure. [my emphasis]

And that may be one of the most important details in Sassoon’s letter to Bondi: Bove negotiated the key point of leverage, dismissal without prejudice with the stated expectation that DOJ will revisit things if and when Adams is reelected in November, without the involvement of SDNY.

When Sassoon invited Judge Ho, by name, to use his early admonition about public filings “to conduct a searching inquiry in this case,” she suggested that Bove was skirting that earlier admonition. Dale Ho likely didn’t need Sassoon’s invitation, and doesn’t need to first find a way to adopt this correspondence to the public docket.

Because Bove insanely submitted a request to dismiss the indictment without the most important piece of the paperwork.

Timeline and documents

January 31: Meeting at which someone from SDNY took notes, which were confiscated.

February 3: Date of SDNY memo that, per Bove, denies a quid pro quo.

Monday, February 10: Bove letter to Sassoon (addressed as Acting US Attorney), ordering her to dismiss the case.

Wednesday, February 12: Sassoon letter to Pam Bondi, asking to meet.

Thursday, February 13: Bove letter to Sassoon, firing her.

February 13 or 14: Hagen Scotten resignation letter.

Friday, February 14: Nolle Prosequi letter submitted by Acting Criminal Division Chief Antoinette Bacon and AUSA Edward Sullivan, signed by Bove.

Update: Added the February 3 memo.

As the Thursday Night Massacre Turns into Friday Morning

Hagen Scotten, the lead prosecutor on the Eric Adams case, has joined at least six other attorneys in leaving DOJ rather than carry out Trump’s alleged quid pro quo with Eric Adams.

His letter (posted by NYT) is one for the ages:

I have received correspondence indicating that I refused your order to move to dismiss the indictment against Eric Adams without prejudice, subject to certain conditions, including the express possibility of reinstatement of the indictment. That is not exactly correct. The U.S. Attorney, Danielle R. Sassoon, never asked me to file such a motion, and I therefore never had an opportunity to refuse.

But I am entirely in agreement with her decision not to do so, for the reasons stated in her February 12, 2025 letter to the Attorney General. In short, the first justification for the motion—that Damian Williams’s role in the case somehow tainted a valid indictment supported by ample evidence, and pursued under four different U.S. attorneys—is so weak as to be transparently pretextual. The second justification is worse. No system of ordered liberty can allow the Government to use the carrot of dismissing charges, or the stick of threatening to bring them again, to induce an elected official to support its policy objectives.

There is a tradition in public service of resigning in a last-ditch effort to head off a serious mistake . Some will view the mistake you are committing here in the light of their generally negative views of the new Administration. I do not share those views. I can even understand how a Chief Executive whose background is in business and politics might see the contemplated dismissal-with-leverage as a good, if distasteful, deal. But any assistant U.S. attorney would know that our laws and traditions do not allow using the prosecutorial power to influence other citizens, much less elected officials, in this way. If no lawyer within earshot of the President is willing to give him that advice, then I expect you will eventually find someone who is enough of a fool, or enough of a coward, to file your motion. But it was never going to be me.

Please consider this my resignation. It has been an honor to serve as a prosecutor in the Southern District of New York

As NYT described, Scotten is a former Special Forces Officer and clerked for both Bret Kavanaugh and John Roberts.

Mr. Scotten served three combat tours in Iraq as a U.S. Army Special Forces Officer and earned two Bronze Stars. He graduated from Harvard Law School and clerked for Chief Justice John G. Roberts Jr. of the U.S. Supreme Court, and for Brett M. Kavanaugh before he, too, became an Supreme Court justice.

Earlier today, I perused the Murdoch press and there is nothing so far about this burgeoning scandal. I’ve seen no comment from Republican members of Congress, and frankly far too little from Democrats.

But this may already be teed up to go to SCOTUS. And when it does, some of the loudest voices will be those of conservative lawyers who refused to be party to an alleged quid pro quo.

Update: Brad Heath reports that DOJ finally found someone to sign the motion to dismiss.

Emil Bove’s Prisoner Exchange

The Acting US Attorney for SDNY, Danielle Sassoon, who was hand-picked by Trump’s people, resigned today rather than do the dirty bidding of Trump’s defense attorney (and disgruntled former SDNY AUSA) Emil Bove, by dismissing the case against Eric Adams.

After she resigned, two attorneys in DOJ’s Public Integrity Division, Kevin Driscoll and John Keller, joined her rather than dismiss the case.

A letter, yesterday, from Sassoon to Pam Bondi and another, today, from Bove to Sassoon document much of what happened.

Sassoon documents that Bove likened the dismissal of charges against Adams to the Viktor Bout prisoner exchange (something that was in his original letter).

Mr. Bove proposes dismissing the charges against Adams in return for his assistance in enforcing the federal immigration laws, analogizing to the prisoner exchange in which the United States freed notorious Russian arms dealer Victor Bout in return for an American prisoner in Russia. Such an exchange with Adams violates commonsense beliefs in the equal administration of justice, the Justice Manual, and the Rules of Professional Conduct. The “commitment to the rule of law is nowhere more profoundly manifest” than in criminal justice. Cheney v. United States Dist. Ct., 542 U.S. 367, 384 (2004) (alterations and citation omitted). Impartial enforcement of the law is the bedrock of federal prosecutions. See Robert H. Jackson, The Federal Prosecutor, 24 J. Am. Jud. Soc’y 18 (1940). As the Justice Manual has long recognized, “the rule of law depends upon the evenhanded administration of justice. The legal judgments of the Department of Justice must be impartial and insulated from political influence.” JM § 1-8.100. But Adams has argued in substance—and Mr. Bove appears prepared to concede—that Adams should receive leniency for federal crimes solely because he occupies an important public position and can use that position to assist in the Administration’s policy priorities.

[snip]

Adams’s advocacy should be called out for what it is: an improper offer of immigration enforcement assistance in exchange for a dismissal of his case. Although Mr. Bove disclaimed any intention to exchange leniency in this case for Adams’s assistance in enforcing federal law,1 that is the nature of the bargain laid bare in Mr. Bove’s memo. That is especially so given Mr. Bove’s comparison to the Bout prisoner exchange, which was quite expressly a quid pro quo, but one carried out by the White House, and not the prosecutors in charge of Bout’s case.

The comparison to the Bout exchange is particularly alarming. That prisoner swap was an exchange of official acts between separate sovereigns (the United States and Russia), neither of which had any claim that the other should obey its laws. By contrast, Adams is an American citizen, and a local elected official, who is seeking a personal benefit—immunity from federal laws to which he is undoubtedly subject—in exchange for an act—enforcement of federal law—he has no right to refuse. Moreover, the Bout exchange was a widely criticized sacrifice of a valid American interest (the punishment of an infamous arms dealer) which Russia was able to extract only through a patently selective prosecution of a famous American athlete.2 It is difficult to imagine that the Department wishes to emulate that episode by granting Adams leverage over it akin to Russia’s influence in international affairs. It is a breathtaking and dangerous precedent to reward Adams’s opportunistic and shifting commitments on immigration and other policy matters with dismissal of a criminal indictment. Nor will a court likely find that such an improper exchange is consistent with the public interest. See United States v. N.V. Nederlandsche Combinatie Voor Chemische Industrie (“Nederlandsche Combinatie”), 428 F. Supp. 114, 116-17 (S.D.N.Y. 1977) (denying Government’s motion to dismiss where Government had agreed to dismiss charges against certain defendants in exchange for guilty pleas by others); cf. In re United States, 345 F.3d 450, 453 (7th Cir. 2003) (describing a prosecutor’s acceptance of a bribe as a clear example of a dismissal that should not be granted as contrary to the public interest).

[snip]

In particular, the rationale given by Mr. Bove—an exchange between a criminal defendant and the Department of Justice akin to the Bout exchange with Russia—is, as explained above, a bargain that a prosecutor should not make. Moreover, dismissing without prejudice and with the express option of again indicting Adams in the future creates obvious ethical problems, by implicitly threatening future prosecution if Adams’s cooperation with enforcing the immigration laws proves unsatisfactory to the Department. See In re Christoff, 690 N.E.2d 1135 (Ind. 1997) (disciplining prosecutor for threatening to renew a dormant criminal investigation against a potential candidate for public office in order to dissuade the candidate from running); Bruce A. Green & Rebecca Roiphe, Who Should Police Politicization of the DOJ?, 35 Notre Dame J.L. Ethics & Pub. Pol’y 671, 681 (2021) (noting that the Arizona Supreme Court disbarred the elected chief prosecutor of Maricopa County, Arizona, and his deputy, in part, for misusing their power to advance the chief prosecutor’s partisan political interests). Finally, given the highly generalized accusations of weaponization, weighed against the strength of the evidence against Adams, a court will likely question whether that basis is pretextual. See, e.g., United States v. Greater Blouse, Skirt & Neckwear Contractors, 228 F. Supp. 483, 487 (S.D.N.Y. 1964) (courts “should be satisfied that the reasons advanced for the proposed dismissal are substantial and the real grounds upon which the application is based”).

1 I attended a meeting on January 31, 2025, with Mr. Bove, Adams’s counsel, and members of my office. Adams’s attorneys repeatedly urged what amounted to a quid pro quo, indicating that Adams would be in a position to assist with the Department’s enforcement priorities only if the indictment were dismissed. Mr. Bove admonished a member of my team who took notes during that meeting and directed the collection of those notes at the meeting’s conclusion.

2 See, e.g., https://thehill.com/homenews/3767785-trump-pans-prisoner-swap-brittney-grinerhates-our-country/.

In response, Bove suggested that DOJ was adopting an unreviewable judgement of “weaponization” in disciplining lawyers.

The weaponization finding in my February 10, 2025 memorandum was made pursuant to a policy set forth by President Trump, who is the only elected official in the ExecutiveBranch, in connection with a decision that was authorized by the Senate-confirmed Attorney General ofthe United States, and entirely consistent with guidance issued by the Attorney General shortly after that confirmation. Your Office has no authority to contest the weaponization finding, or the second independent basis requiring dismissal set forth in my memorandum. The Justice Department will not tolerate the insubordination and apparent misconduct reflected in the approach that you and your office have taken in this matter.

You are well aware of the Department’s weaponization concerns regarding the handling of the investigation and prosecution of Mayor Adams. Those concerns include behavior that supports, at minimum, unacceptable appearances of impropriety and the politicization of your office. The investigation was accelerated after Mayor Adams publicly criticized President Biden’s failed immigration policies, and led by a former U.S. Attorney with deep connections to the former Attorney General who oversaw the weaponization ofthe Justice Department. Based on my review and our meetings, the charging decision was rushed as the 2024 Presidential election approached, and asthe former U.S. Attorney appears to have been pursuing potential political appointments in the event Kamala Harris won that election.

I’ve been wondering for some time when Bove would wildly overstep with his aggressiveness. He’s now facing documentation that supports a quid pro quo seeking political favors. And in response, he suggested his recourse is to adopt a label — weaponization — with no due process.

Trump may yet get his quid pro quo (though Judge Dale Ho now has abundant reason to refuse to dismiss this case).

But he may lose DOJ as a result.

Update: Note that the same day Sassoon sent the letter to Bondi, Bondi sued Tish James. And as this was going on, Trump rescinded FEMA funding for NY.

Those likely are not unrelated.

Update: NYT has published the original letter instructing Sassoon to dismiss the case.

 

Trump Fired Inspectors General Who Identified $183.5 Billion in Waste, Fraud, and Abuse

There have and will be a slew of lawsuits in response to Trump’s attack on government. But this lawsuit, from eight of the Inspectors General that Trump fired on January 24, has been much anticipated. [docket]

That’s partly because Congress just strengthened the laws protecting Inspectors Generals, in response to Trump’s firing of some in his first term, as the suit lays out.

63. Congress responded in 2022 by further amending the IG Act. The Securing Inspector General Independence Act of 2022, see supra ¶6, enacted by overwhelming margins in both houses of Congress, procedural protections before an IG can be removed or placed on nonduty status, designated that a “first assistant” would automatically replace an IG in the event of a vacancy, and required the President to communicate reasons for not making a formal nomination to fill an IG vacancy after a certain period of time.

64. The 2022 amendments also strengthened the procedural safeguards on removing an IG. Prior to the amendments, the IG Act had required the President to provide 30 days’ notice to both houses of Congress and “reasons for any such removal.” The 2022 amendments require the President to provide 30 days’ notice to both houses of Congress, including appropriate congressional committees, and to “communicate in writing the substantive rationale, including detailed and case-specific reasons, for any such removal.” 5 U.S.C. §403(b). With the 2022 amendments included, the relevant provisions now reads as follows:

An Inspector General may be removed from office by the President. If an Inspector General is removed from office or is transferred to another position or location within an establishment, the President shall communicate in writing the substantive rationale, including detailed and case-specific reasons for any such removal or transfer to both Houses of Congress (including to the appropriate congressional committees), not later than 30 days before the removal or transfer. Nothing in this subsection shall prohibit a personnel action otherwise authorized by law, other than transfer or removal.

65. These procedural provisions ensure that Congress or members of Congress can, if it or they deem it appropriate, seek to persuade the President not to go forward with a noticed removal. Indeed, the legislative history of the Inspector General Reform Act indicates that Congress added the notice requirement to “allow for an appropriate dialogue with Congress in the event that the planned transfer or removal is viewed as an inappropriate or politically motivated attempt to terminate an effective Inspector General.” See S. Rep. No. 110-262, at 4 (2008)

If Congress has any power to limit how the President fires someone, then this suit will uphold that power (a large team from Wilmer Cutler, led by former Solicitor General Seth Waxman, are representing the plaintiffs).

But it’s also because the plaintiffs in this suit embody everything Trump claims he wants to do with DOGE. Elon Musk claims he’s hunting for waste, fraud, and corruption in government agencies he’s wildly unfamiliar with. These civil servants have been doing this, some of them, for four decades.

Indeed, one thing the suit lists, for each of the plaintiffs, is how much material impact they have had in their role (with one exception, exclusively in the IG position from which they were fired, which the report explains is:

“Monetary impact” describes the estimated financial savings or losses that could result from implementing recommendations made in an IG’s audits, inspections, or evaluations, essentially quantifying the potential cost-benefit of addressing issues like waste, fraud, and abuse in a government agency or program. See CIGIE, Toolkit for Identifying and Reporting Monetary Impact, at 1 (June 18, 2024), https://www.ignet.gov/sites/default/files/files/Toolkit%20for%20Identifying%20and%20Reporting%20Monetary%20Impact.pdf.

Some monetary-impact estimates reported herein also consider monetary benefits associated with IG investigations.

And while there’s some inconsistency in the reporting (for example, Sandra Bruce included stuff from when she was Acting IG during Trump’s first term whereas some of the others left out susbstantial terms in other IG roles, Larry Turner’s number — for Department of Labor — seems quite high, and Mike Ware does not include $30 billion seized or returned pursuant to investigations he oversaw), the Inspectors General describe identifying $183.5 billion in material impact.

As noted in this post, that includes substantial work cleaning up after COVID relief rolled out by Trump, particularly from Mike Ware, work which lead DOGE Treasury Official Thomas Krause relied on to suggest that DOGE could be effective. In Ware testimony to Congress that Krause cited, Ware described up to $200 billion in fraud just in Small Business related relief alone.

Using OIG’s investigative casework, prior OIG reporting, advanced data analytics, and additional review procedures, we estimate SBA disbursed more than $200 billion in potentially fraudulent COVID-19 EIDLs and PPP loans. This estimate represents approximately 17 percent of disbursed COVID-19 EIDLs and PPP funds — specifically, more than $136 billion COVID-19 EIDLs and $64 billion in PPP funds. Since SBA did not have an established strong internal control environment for approving and disbursing program funds, there was an insufficient barrier against fraudsters accessing funds that should have been available for eligible business owners adversely affected by the pandemic.

That’s what Trump did by firing Ware and the others: halt proven efforts to do what DOGE is incapable of — and only pretending — to do.

Which is another reason to keep an eye on this lawsuit.

Thomas Krause Says Trump Had to Close USAID because of Trump’s Poor COVID Management

In the last few days, Trump has started doing a better job of messaging with his responses to lawsuits. I’ll attempt to explain that going forward. But one instance is the Thomas Krause declaration filed in the Attorneys General challenge to the DOGE access to Treasury systems (which I also wrote about in this post). Krause — still serving as the hatchet man CEO of Citrix (which probably creates a serious conflict) — uses his declaration to claim that he is attempting to “improve the accuracy of financial reporting.”

I am responsible, among other duties, for reducing and eliminating improper and fraudulent payments; waste, fraud, and abuse; and improving the accuracy of financial reporting. To that end, I am focused on improving the controls, processes, and systems that facilitate payments and enable consolidated financial reporting.

Later in the declaration, he provides a notably different explanation for his job.

My role on the Treasury DOGE Team is to find ways to use technology to make the Treasury Department more effective, more efficient, and more responsive to the policy goals of this Administration.

To justify the focus of DOGE, Krause cites several Biden-era GAO reports.

7. As illustrated by several reports released by the Government Accountability Office (GAO), we have our work cut out for us. On January 16, 2025, GAO released a report entitled “Financial Audit: FY2024 and FY2023 Consolidated Financial Statements of the U.S. Government.” In the report, GAO summarizes that they were not able to determine if the Financial Report of the U.S. Government is fairly presented. Among other reasons, GAO highlighted “problems in accounting for transactions between federal agencies.” GAO found many material weaknesses including “the federal government’s inability to determine the full extent to which improper payments, including fraud, occur and reasonably assure that appropriate actions are taken to reduce them.” GAO also reported that Treasury and Office of Management and Budget (OMB) officials expressed their continuing commitment to addressing the problems this report outlines. In short, the GAO report identifies the Federal government’s inability to account for all of the improper payments including waste, fraud and abuse across federal agencies.

8. On September 10, 2024, the GAO released a report entitled “Payment Integrity: Significant Improvements are Needed to Address Improper Payments and Fraud.” The report found that since 2003, cumulative improper payments1 by executive branch agencies have totaled about $2.7 trillion dollars. Some of GAO’s top concerns [1] included fraudulent or improper Earned Income Tax Credit refunds, Social Security payments, unemployment and Medicare and Medicaid payments. In fiscal year 2023 alone, federal agencies estimated $236 billion in improper payments across more than 70 federal programs. In addition, GAO estimated that the total annual financial losses across the government from fraud are between $233 and $521 billion. These numbers are truly staggering—billions and billions in hardearned American taxpayer dollars are being misspent every year. GAO highlighted a number of steps that Congress and federal agencies could take to help reduce fraud and improper payments, including that “[a]gencies should improve oversight to ensure that funds aren’t paid to ineligible recipients” [2] and that “[a]gencies should improve their collection and use of data for preventing and detecting fraud.” [3]

9. Similarly, GAO has identified areas for improvement in BFS’s systems related to identifying and tracing transactions to determine whether they were complete and properly recorded in the correct general ledger accounts and line items within the Schedules of the General Fund. See GAO Report, “Financial Statement Audit: Bureau of the Fiscal Service’s FY22 Schedules of the General Fund” (March 30, 2023). Specifically, GAO has found inconsistent reporting, lack of traceability, and need for improved controls with the Treasury’s Central Accounting and Reporting System (CARS), which federal agencies use to track their spending for budgetary and accounting purposes. These kinds of improvements and others can enhance BFS’s ability to ensure accountability in the spending of taxpayer dollars.

1 Improper payments and fraudulent payments are related but distinct concepts. An improper payment is a payment that should not have been made, or that was made with an incorrect amount; fraudulent payments occur due to willful misrepresentation. All fraudulent payments are improper, but not all improper payments are fraudulent. [emphasis and links added]

Elon Musk parroted a lot of this language at his presser at the White House yesterday (which is one reason I say they’re beginning to coordinate this better).

If you don’t look too closely, the declaration almost makes DOGE look smart. Except I decided to look at one of the reports — the second one — more closely.

And once I did, I realized that Thomas Krause is, in part, using Trump’s management failures during COVID as an excuse to start shutting down government. Start with the fact that the first agency Krause focused on after arriving at Treasury was USAID — pursuing his goal of making Treasury, “more responsive to the policy goals of this Administration.” But that’s not one of the high risk agencies, all of which have to do with direct payments.

Since 2003, which is when they first tracked the data, the amount of improper payments has steadily increased. But it has declined in recent years, under Biden.

 

There’s a reason for that. Look more closely at the estimated improper payments, their sources, and their timing. 

For longstanding programs — Medicare and Social Security, the ones Krause mentions in his declaration — the number of improper payments in recent years is about what it was under Trump. What has spiked in recent years (and then receded) are programs that expanded under COVID: Expanded Medicaid and unemployment access, and the PPP program rolled out under Trump, something Krause neglects to mention at [1]. A key thing this report measures is COVID mispayments — that is, improper payments made under programs set up under President Donald Trump, 1.0.

The quotes at [2] and [3] are not actually from the report. They’re from this website (which links to this report).

Many of the recommendations and data used in this report pertain to COVID or lessons learned from it. For example, the report recommends making the payment tracking center set up in response to COVID permanent.

Establish a permanent analytics center of excellence to aid the oversight community in identifying improper payments and fraud.28 This could be achieved by building upon and expanding PACE and making it permanent.

And it recommended building in such collection in case of any future emergency response — in part, to avoid the two to three year delay in finding these payments reflected in the table above.

Require OMB to (1) provide guidance for agencies to proactively develop internal control plans that would be ready for use in, or adaptation for, future emergencies or crises and (2) require agencies to report these plans to OMB and Congress.

Amend PIIA. Quickly reporting improper payment estimates for emergency relief programs is critical for agency accountability and transparency over whether appropriated funds were spent for their intended purposes. In addition, estimating improper payments and identifying root causes help ensure that agencies develop and implement corrective actions to reduce them.

In November 2020, we recommended that Congress consider, in any future legislation appropriating COVID-19 relief funds, designating all executive agency programs and activities that made more than $100 million in payments from COVID-19 relief funds as “susceptible to significant improper payments.31 Such a designation would require, among other things, agencies to report improper payment estimates for such a program and develop corrective actions to reduce improper payments. In March 2022, we recommended that Congress amend PIIA to apply this criterion to all new federal programs for their initial years of operation.32 The current approach resulted in 2-to-3 year delays in reporting improper payment estimates for short-term and emergency spending COVID relief programs.

Much of the fraud, too, pertains to COVID relief.

When it is discovered, the Department of Justice (DOJ) can bring charges of fraud against the alleged fraudsters. For example, DOJ has prosecuted over 2,000 COVID-19 fraud-related cases, and hundreds of additional cases are pending. We analyzed the department’s public statements and court documentation and found that, from March 2020 through March 2024, at least 1,998 individuals or entities facing fraud-related charges were found guilty or liable.16 This includes charges in cases involving SBA’s loan programs, DOL’s Unemployment Insurance (UI) programs, and Treasury’s economic impact payments. Of the individuals found guilty, at least 1,596 had been sentenced as of March 31, 2024, and many have also been ordered to pay restitution and fines. There were also federal fraud-related charges pending against at least 632 other individuals or entities involving federal COVID-19 relief programs, as of March 31, 2024.17 We expect the number to continue to increase as investigations take time to develop and given the significant number of investigative leads. For instance, SBA’s IG office reported that its actionable leads represent more than 100 years of investigative case work.18 The government has 10 years to prosecute individuals who committed fraud related to the Paycheck Protection Program (PPP) and the COVID-19 Economic Injury Disaster Loan (EIDL) program.19 DOL’s IG has requested Congress similarly extend the statute of limitations for the pandemic relief UI programs as well.20 Additionally, in a June 2024 press release, the Internal Revenue Service requested to Congress that the statute of limitations for fraud be extended for the Employee Retention Credit.21 We support their requests.

Now, to be fair, there was likely to be overpayments and fraud regardless of who was in charge when COVID hit (or when avian flu and measles become pandemics in months ahead).

This is not all attributable to Trump’s COVID failures.

But one other thing about this report deserves mention: It is full of discussion of the role of Inspectors General in finding this fraud, including a bunch of the people Trump fired four days into his term — six of whom just filed suit today (which I’ll turn to shortly). Indeed, one of them — Mike Ware — is cited in the report Krause invoked.

18 Stolen Taxpayer Funds: Reviewing the SBA and OIG Reports of Fraud in Pandemic Lending Programs Hearing Before the House Committee on Small Business, 118th Cong. 45 (2023) (statement of Hannibal “Mike” Ware, Inspector General of U.S. Small Business Administration).

Thomas Krause says we need to fix the errors created by Trump’s poor management of COVID. But one of the first things Trump in his second term did was to fire the people who’ve done the most to do so.

Update: Corrected Mike Ware’s last name.

Update: I’ve linked Ware’s testimony, above. Among other things, he estimated that SBC IG identified up to $200 billion in fraudulent COVID relief.

Using OIG’s investigative casework, prior OIG reporting, advanced data analytics, and additional review procedures, we estimate SBA disbursed more than $200 billion in potentially fraudulent COVID-19 EIDLs and PPP loans. This estimate represents approximately 17 percent of disbursed COVID-19 EIDLs and PPP funds — specifically, more than $136 billion COVID-19 EIDLs and $64 billion in PPP funds. Since SBA did not have an established strong internal control environment for approving and disbursing program funds, there was an insufficient barrier against fraudsters accessing funds that should have been available for eligible business owners adversely affected by the pandemic.

In other words, a huge chunk of the fraud Krause says he is looking for was IDed by one of the guys Trump fired on day four.

Marko Elez “Resigned” the Day His Write Access to Payment Systems Was Discovered

According to the currently operative story, Marko Elez — the DOGE [sic] boy who had source code for Treasury’s payments system — resigned in response to a query from WSJ reporter Katherine Long about his social media posts in support of

A key DOGE staff member who gained access to the Treasury Department’s central-payments system resigned Thursday after he was linked to a deleted social-media account that advocated racism and eugenics.

Marko Elez, a 25-year-old who is part of a cadre of Elon Musk lieutenants deployed by the Department of Government Efficiency to scrutinize federal spending, resigned after The Wall Street Journal asked the White House about his connection to the account.

“Just for the record, I was racist before it was cool,” the account posted in July, according to the Journal’s review of archived posts.

“You could not pay me to marry outside of my ethnicity,” the account wrote on X in September. “Normalize Indian hate,” the account wrote the same month, in reference to a post noting the prevalence of people from India in Silicon Valley.

After the Journal inquired about the account, White House spokesperson Karoline Leavitt said that Elez had resigned from his role.

But that belief is only based on correlation, not any proof of causation. Long asked about posts that are in no way exceptional for the far right boys Elon has infiltrated into the government. And Elez resigned that same day.

Sure, Elon implied that Elez quit because the boy’s far right ideology was exposed — he led a campaign for his reinstatement. That campaign — and JD Vance’s support for it — similarly led a lot of people to believe that Elez had been reinstalled at Treasury. But multiple court filings claim that Elez resigned and never came back, at least not to Treasury.

In fact, there are two things that might provide better explanations than the discovery that like Elon himself, Elez is a racist.

As WSJ itself notes, Elez resigned the same day that Colleen Kollar-Kotelly ordered that Elez, then still identified as a Special Government Employee, be granted only read-only access to Treasury’s networks. Once Elez no longer worked for the defendants in that case — starting with Scott Bessent — then any access he had would be exempted from the order.

More importantly, as a court filing submitted yesterday reveals, Elez’ resignation happened the same day that Treasury discovered Elez’s Bureau laptop, “had mistakenly been configured with read/write permissions instead of read-only.” The filing is a declaration from Joseph Gioeli, who has been employed as the “Deputy Commissioner for Transformation and Modernization in the Bureau of the Fiscal Service” since 2023 and is a civil servant first hired in the first year of Trump’s first term.

His declaration describes how the 4-6 week “payment process engagement plan” initiated (per Thomas Krause) on January 26 required giving Elez risky access to payment systems. Gioeli describes how they tried to mitigate those risks.

11. The scope of work as envisioned in the engagement plan required access to Fiscal Service source code, applications, and databases across all these Fiscal Service payment and accounting systems and their hosting environments. This broad access presented risks, which included potential operational disruptions to Fiscal Service’s payment systems, access to sensitive data elements, insider threat risk, and other risks that are inherent to any user access to sensitive IT systems. In light of these risks, BFS and Treasury Departmental Office employees developed mitigation strategies that sought to reduce these risks.

12. These measures included the requirement that Mr. Elez be provided with a BFS laptop, which would be his only method of connecting to the Treasury payments systems, both in connecting with the source code repository and for his read-only access of the systems. He had previously been provided a Treasury laptop from the Department shortly after he onboarded, but due to Bureau security policy, that device was restricted from accessing the BFS systems and services he had requested. BFS used several cybersecurity tools to monitor Mr. Elez’s usage of his BFS laptop at all times and continuously log his activity. Additionally, the Bureau enabled enhanced monitoring on his laptop, which included the ability to monitor and block website access, block the use of external peripherals (such as USB drives or mass storage devices), monitor any scripts or commands executed on the device, and block access to cloud-based storage services. Additionally, the device contained data exfiltration detection, which alerts the Bureau to attempts to transmit sensitive data types. The laptop is also encrypted in accordance with Bureau policy, which, if the laptop were stolen or lost, would prevent unauthorized users from accessing data contained within the laptop.

13. Additional mitigation measures that were adopted included that Mr. Elez would receive “read-only” access to the systems, and that any reviews conducted using the “read-only” access would occur during low-utilization time periods, to minimize the possibility of operational disruptions. While providing a single individual with access to multiple systems and data records accessed here was broader in scope than what has occurred in the past, this read-only approach is similar to the kind of limited access the Bureau has provided to auditors for other Treasury non-payment systems, though even in those scenarios the availability of production data was significantly limited. [my emphasis]

Gioeli goes on to describe how, starting on February January 28, the Bureau gave Elez source code in a sandbox environment.

16. On January 28, 2025, the Bureau provided Mr. Elez with the Bureau laptop and with copies of the source code for PAM, SPS, and ASAP in a separate, secure coding environment known as a “secure code repository” or “sandbox.” Mr. Elez could review and make changes locally to copies of the source code in the cordoned-off code repository; however, he did not have the authority or capability to publish any code changes to the production system or underlying test environments. This repository was separate from Fiscal Service’s typical code development environment, and unlike the usual code development environment, this new repository was segmented, to ensure that no changes to the operative source code could be made. [my emphasis]

Then, six days after giving him that sandbox access, using the same laptop, they gave him read-only access to first two and then one more systems.

17. On February 3, 2025, consistent with the engagement plan and mitigation measures developed, Mr. Elez was provided with read-only access, through his Bureau laptop, to the certain BFS systems. The read-only access that Mr. Elez was provided gives the user the ability to view and query information and data but does not allow for any changes to that information and data within its source system. While this reduces risk, it does not fully eliminate the risks identified in the assessment (for example, the risk of overburdening the system with a complex read-only query). Specifically, Mr. Elez was provided read-only access to the Payment Automation Manager (PAM) Database, Payment Automation Manager (PAM) File System, and, subsequently on February 5, the Secure Payment System (SPS) Database.

After he got that access, per a review of the logs, Elez copied some files from the active database onto his Bureau laptop, on which he had the source code.

18. ISS configured his network access and assisted him in setting up the necessary tools to connect to the PAM database on February 3. His access was closely monitored by multiple BFS administrators throughout the process on February 3. That same day, he received a “walk-through” demonstration of two BFS payment systems, the PAM database and the PAM file system (the system that controls the payment file “landing zone” discussed above), to see how the systems worked. He logged in with his read-only access to these systems on February 3 during this “walk-through” demonstration. The Bureau is in the process of reviewing the logs of Mr. Elez’s activity on his Bureau laptop, and this review remains ongoing. Based on the preliminary log reviews conducted to date, it appears that on February 3, Mr. Elez copied two USAID files directly from the PAM database to his BFS laptop; on February 4 and 5, Mr. Elez accessed the PAM file system; and on February 5, Mr. Elez accessed the PAM payment processing database. These activities are consistent with the read-only access that Mr. Elez was provided and did not change or alter any BFS payment system or record within their source systems. As noted, reviews of Mr. Elez’s work are still actively occurring; I do not have any more detail to provide at this time about his activities with respect to PAM. [my emphasis]

Then, on February 5, Elez got access to the payment system itself — again, with the same laptop on which he had source code.

19. Due to scheduling constraints, Mr. Elez was unable to meet with Bureau personnel to set up his access to the SPS database until February 5. On that date, lSS held a virtual walk-through session to help him to connect to the SPS database. He accessed this database exclusively under the supervision of Bureau database administrators in a virtual walkthrough session. According to the preliminary review of logs the Bureau has conducted to date, it appears Mr. Elez accessed the SPS database only once during that walk-through demonstration on February 5. It does not appear that he accessed the database again. As part of the ongoing review, additional log reviews are currently underway to confirm this. Mr. Elez never logged into ASAP, CARS, or ITS.gov, as technical access to those systems was never established for him. [my emphasis]

The next day, “it was discovered” (Gioeli does not say by whom, which means we’re not seeing a declaration from that person) that Elez actually “had mistakenly been configured” with read/write access, rather than “read only.”

20. On the morning of February 6, it was discovered that Mr. Elez’s database access to SPS on February 5 had mistakenly been configured with read/write permissions instead of read-only. A forensic investigation was immediately initiated by database administrators to review all activities performed on that server and database. The initial investigation confirmed that all of Mr. Elez’s interactions with the SPS system occurred within the supervised, walk-through session and that no unauthorized actions had taken place. His access was promptly corrected to read-only, and he did not log into the system again after his initial virtual over-the-shoulder session on February 5. To the best of our knowledge, Mr. Elez never knew of the fact that he briefly had read/write permissions for the SPS database, and never took any action to exercise the “write” privileges in order to modify anything within the SPS database—indeed, he never logged in during the time that he had read/write privileges, other than during the virtual walk-through – and forensic analysis is currently underway to confirm this. [my emphasis]

Throughout his declaration, Gioeli stresses that they’re still investigating whether Elez did something unauthorized with his access.

21. As noted above, the Bureau used several cybersecurity tools to monitor Mr. Elez’s usage and continuously log his activity. While forensic analysis is still ongoing, Bureau personnel have conducted preliminary reviews of logs of his activity both on his laptop and within the systems and at this time have found no indication of any unauthorized use, of any use outside the scope that was directed by Treasury leadership, or that Mr. Elez used his BFS laptop to share any BFS payment systems data outside the U.S. Government.

And his declaration stops short of saying that some mitigation techniques were used. For example, Gioeli says that the enhanced monitoring on Elez’ Bureau laptop had the ability to “block the use of external peripherals (such as USB drives or mass storage devices)” and access to the cloud, but it doesn’t say whether those functionalities was used.

Plus, Gioeli’s declaration makes it clear that they have’t involved Elez in any review of his access. No one has asked Elez, for example, whether he knew he had write access to the payment system.

Similarly, in an earlier declaration submitted in the parallel DC case, Thomas Krause gave a very couched answer about whether Elez had has any ongoing access.

I currently have no reason to believe Mr. Elez retains access to any BFS payment data, source code, or systems.”

Did anyone think to ask the guy? Does anyone know where that guy is? Are you going to interview him? Or is someone deliberately trying to keep him from being questioned further?

Worse still, Thomas Krause declaration submitted in the NY case doesn’t even say that Elez has left Treasury — only that he has resigned from the role of, “working closely with engineers at the Bureau of the Fiscal Service (BFS) on information technology (IT) matters in service of BFS’s mission to promote financial integrity and operational efficiency of the federal government through accounting, financing, collection, payment, and other relevant BFS services.”

On February 6, 2025, Mr. Elez submitted his resignation from this role. On that same day, he turned in his Treasury laptop, BFS laptop, access card, and other government devices; his BFS systems access was terminated; and he has not conducted any work related to the BFS payment systems since that date.

Elez was made a Treasury employee — contrary to early reports, he was not a SGE. That may make it easier to shuffle him off somewhere else.

What Gioeli describes is the panic that ensues when a guy who had high level access quits unexpectedly. And to date, we’ve never been given a formal explanation of why he quit — or whether he was asked to do so. We certainly can’t reconcile the claims that he has been reinstated with claims that he’s not doing what he was doing at Treasury.

Everyone has always assumed that Elez quit because his racism was discovered. But given the timeline, we can’t rule out that he quit because of the access concerns (and ongoing investigation) at Treasury.

Timeline

January 21: Elez hired.

January 23: Krause hired.

January 26: Treasury focuses on USAD. Treasury also adopts a 4-6 week engagement plan.

January 28: Bureau provides Elez with Bureau laptop copies of the source code for PAM, SPS, and ASAP in sandbox.

January 31: Treasury focuses on TAS codes; Elez assists in “automating” manual review of payments. “A high-ranking career official at Treasury also raised the issue of risks from DOGE access in a memo to Treasury Secretary Scott Bessent.”

February 3: Treasury gives Elez access to PAM. Booz threat contractor delivers report warning of grave insider threat.

February 5: Treasury gives Elez access to SPS, the payment system.

February 6 (afternoon): Elez resignation.

February 7: Treasury flags but then approves four payments. WaPo publishes story about Booz report and Booz contractor is fired.

February 8: Paul Engelmeyer limits Krause’s access.

February 10: Millenium Challenge Corporation submits, but then requests not to process, a payment.

Documents

Opposition to Stay

Thomas Krause Declaration: Describing the plan to use technology to provide more oversight over payments (citing three Biden-era GAO reports, not anything DOGE has discovered).

Vona Robinson Declaration: Describing that the only payment that has been intercepted at Treasury was a payment to the Millenium Challenge Corporation.

Michael Wenzler Declaration: Describing the hiring, employment status, revisions thereof, of Thomas Krause and Marko Elez, and also confirming Elez’ resignation from Treasury.

Joseph Gioeli Declaration: Describing the circumstances of Elez’ access and the investigation into what he did with it.

“The Fraudsters Complain the Loudest and the Fastest:” Legacy Media Ignores Import of Gaza Condom Fact Check

At a weird appearance in the Oval Office rife with awkward projections that Elon Musk believes he is more powerful than Trump (here’s the full CSPAN video), a journalist asked Elon how — given the egregious error he made about condoms and Gaza — we should believe anything he said.

 

 

The exchange is bad enough: Elon basically confessed, in front of Trump, that a hoax Elon started that traveled first to Trump propagandist Karoline Leavitt and from there, through Jesse Watters’ exaggerations on Fox News, into several repetitions of the false claim by Trump was wrong.

 

 

The entire point of this presser was to substantiate Trump’s false (and undocumented) claim that DOGE [sic] had found billions of dollars of waste, fraud, and abuse and use that to, first, pressure judges who are putting brakes on DOGE and, then, justify giving DOGE [sic] authority to fire a bunch of people via Executive Order.

When Trump asked Elon to substantiate such claims, Elon instead vaguely pointed to people who were wealthy even though they had meager salaries — not something that should be under his review. He listed other things that are known — and were known, during Trump’s first term — which are archaic but not fraud.

And in that appearance, a journalist called Elon out for inventing something about Gaza that led Trump to lie publicly.

That should have led to stories about how, in Trump’s presence, Elon admitted he makes shit up and Trump repeats them.

For the most part, it didn’t happen:

  • NYT noted that Elon offered no proof of fraud, but did not mention the proof that Elon got caught in a lie.
  • WaPo focused on the EO, but later explained that neither Trump nor Musk offered proof — but didn’t mention he got caught in a lie.
  • Politico focused on the EO, but later noted that Elon said he would police his own conflicts.
  • In an analytical piece, CNN claimed that Elon offered examples of fraud (which is false), but didn’t mention Gaza.

After airing Elon about scrutiny he claimed he was getting, WSJ did mention the Gaza question.

Asked about the Trump administration’s false assertion that the federal government sent $50 million worth of condoms to Gaza, the billionaire acknowledged that he might at times promote erroneous information. “Some of the things that I say will be incorrect and should be corrected,” Musk said. “Nobody is going to bat 1,000.”

But WSJ didn’t pursue the implication of it: that Elon got caught in a false claim.

Indeed, the only specific example that Trump mentioned was funding FEMA spent in NYC to house migrants — something approved by Congress — for which the staffers have been fired (as I’ll return to, Trump’s DOJ is already misrepresenting this in courts), was also based on an Elon lie.

The Trump administration said on Tuesday that it had fired four employees from the Federal Emergency Management Agency, including the agency’s chief financial officer, over their roles in disbursing federal funds to house migrants in New York City hotels.

The firings capped a startling chain of events that began on Monday with an early-morning social media post by Elon Musk who claimed, misleadingly, that FEMA had recently sent $59 million meant for disaster relief to New York City to pay for “high end hotels” for migrants, and who called the expenditure unlawful.

New York City officials raced to clarify that the federal money had been properly allocated by FEMA under President Joseph R. Biden Jr. last year, adding that it was not a disaster relief grant and had not been spent on luxury hotels.

Nonetheless, just two hours after Mr. Musk’s post, FEMA’s acting director, Cameron Hamilton, announced that the payments in question “have all been suspended” — even though most of the money had already been disbursed — and that “personnel will be held accountable.”

By Tuesday morning, roughly 24 hours after Mr. Musk’s post, the Trump administration had followed through on one part of its pledge.

Elon also made a false claim that they had turned on AIDS prevention — in one of the state lawsuits, Washington State presented a case where funds for AIDS prevention programs was being withheld.

This press conference consisted of Elon (and Trump) making false claim after false claim.

It also consisted of Trump lying over and over, without proof, about how one only needed to look for fraud to find it. No one asked why he hadn’t looked in his first term. Indeed, several times he blamed Biden for problems that have existed for decades.

And yet, at best, journalists instead claimed only that Elon and Trump simply presented no proof.

Donald Trump’s Incorrect Shell Game of Appropriated Spending

Yesterday, I argued that Trump would not yet defy courts because he wants to invite the Supreme Court to sanction his dictatorial powers, and so wants a clear appellate record.

Boy howdy was that a short-lived theory. Trump says he is appealing two orders that are not yet ripe for appeal in two lawsuits involving Democratic Attorneys General — RI Judge John McConnell’s order and follow-up order that the government pay grants to the states [appeal] and Paul Engelmeyer’s order ordering Treasury to stay out of the payment system [request for stay pending appeal] — as well as in Special Counsel Hampton Dellinger’s challenge to his dismissal.

So by the time Republicans figure out how they’re going to use reconciliation to pass Trump’s policies, SCOTUS may have already agreed to gut Congress’ power of the purse.

But the record in the spending cases is anything but clean.

In one of the two cases challenging DOGE’s [sic] access to Treasury systems — the DC case before Colleen Kollar-Kotelly — DOJ decided after the fact that Marko Elez, the DOGE [sic] boy who had been granted a copy of Treasury systems to sandbox, was actually a Treasury employee.

With the benefit of more time to investigate the facts over the weekend, Defendants came to understand that Marko Elez, who, at the time of the hearing was employed by the Department of the Treasury, had not, in fact, been designated by the Treasury Department as a Special Government Employee (SGE), as counsel stated at the February 5 hearing. Mr. Elez, was, however, a Treasury Department employee. Treasury hired Mr. Elez as Special Advisor for Information Technology and Modernization, Departmental Offices, Office of the Chief of Staff, under Treasury’s authority to establish temporary transitional Schedule C positions. See 5 C.F.R. § 213.3302. Although Mr. Elez could have been designated as an SGE because he was slated to perform temporary duties either on a full-time or intermittent basis for not more than 130 days, the Treasury department Ethics office did not designate Mr. Elez as a Special Government Employee, meaning that he in fact had to comply with additional ethics requirements that are not required for SGE positions.

[snip]

Defendants also wish to notify the Court that, as stated in the Declaration of Thomas Krause, Jr., filed yesterday, in State of New York v. U.S. Department of the Treasury, Case No. 25 Civ. 01144 (JAV) (S.D.N.Y.), Mr. Elez resigned from Treasury on February 6, 2025, and he returned all Treasury and BFS equipment and credentials the same day. See Exhibit 1, ¶ 11. Moreover, in that case, on February 8, the Court entered a temporary restraining order restricting who may access Treasury systems. See Ex. 2. Those restrictions are in addition to those imposed by this Court’s Order entered February 6.

This filing included Thomas Krause’ declaration (submitted in the Treasury suit filed by states, which Trump is appealing) describing that Elez had resigned (but not addressing whether he has been reinstated; in retrospect, it seems the declaration was written specifically to avoid calling Elez a DGE). But it didn’t include the underlying filing in the case, which in a footnote confesses that Elez had a full copy of the BFS system in a sandbox, falsely claiming that Krause addressed this in his declaration.

2 Since January 20, 2025, one other Treasury employee—Marco Elez—had “read only” access to or copies of certain data in BFS payment systems, subject to restrictions, and access to a copy of certain BFS payments systems’ source code in a “sandbox” environment. Krause Decl. ¶ 11. Mr. Elez resigned on February 6, 2025 and returned all Treasury and BFS equipment and credentials the same day. Id

This means that this correction doesn’t correct another false claim DOJ made to Kollar-Kotelly: that Elez’ access had been “read only.” And DOJ hasn’t told Judge Jeanette Vargas (to whom the New York case was assigned after Engelmeyer issued the TRO) that Elez is a full Treasury employee and so, if he has been reinstated, potentially excluded from Engelmeyer’s order.

In the USAID case, where Trump might believe he can coax a favorable ruling from his own first term appointee, Carl Nichols, Peter Marocco submitted a long, obnoxious declaration claiming they had to shut down USAID because of widespread insubordination among USAID employees. (I’d quote from it but the declaration breaks local rules requiring OCR filings.)

But after Marocco submitted that filing, the career AUSAs on the case submitted a declaration that included this correction.

Additionally, although Secretary Rubio’s January 24, 2025 directive only froze future contract obligations, id. ¶ 3, payments on existing contracts were paused as well as part of efforts by agency leadership to regain control of the organization’s spending and conduct a comprehensive review of its programs. See id. ¶¶ 5–10. Counsel for Defendants was unaware of this development prior to the hearing. [my emphasis]

Marocco confesses that existing contracts “were paused” by him this way:

Furthermore, many of USAID’s pre-existing programs were in conflict with the directives and priorities of the President and Secretary, and therefore were inconsistent with the public interest and foreign policy judgments of the Executive Branch. Given the scale of these programs, an ad hoc review of these conflicting programs would unduly burden the execution of the President’s other foreign policy priorities. A blanket pause with a waive-in process was the more efficient and effective path.

He describes this notice Marco Rubio sent to Congress, which makes no mention of pausing ongoing work. Then he continues to describe how existing programs “were paused” by him.

The first step of this review, in essence, involved the majority of USAID pausing a substantial portion of its ongoing work — going “pencils down” — so the Secretary and USAID leadership could gain control of the organization that included some employees who had refused to comply with lawful directives by the President and Secretary, directives designed to identify wasteful or fraudulent programs or those contrary to the foreign policy interests of the United States. The pause of ongoing work and use of paid administrative leave have enabled Agency leadership to begin a thorough review of USAID’s operations and align its functions to the President’s and Secretary’s priorities, without continued noncompliance by former Agency leadership and management undermining those priorities. Pausing a majority of USAID’s work was, and remains, necessary to continue this thorough review into the noncompliance issues first identified, as well as to continue to examine USAID’s processes and the manner in which USAID funds its programs.

In other words, the people that Marocco calls noncompliant are noncompliant because they’re following the law, a law uncontroverted by Trump’s order or even Rubio’s notice to Congress.

As Nichols said when he issued the TRO ordering USAID to reinstate employees, whether or not this involved existing or only prospective contracts was an issue of some contention in the hearing.

Plaintiffs finally seek a TRO as to Secretary Rubio’s January 24, 2025 order freezing funding to USAID’s contractors. As a threshold matter, the Court notes that there are significant factual questions about what the practical effect of that order is. The government argued at the hearing that the order only prevents USAID from entering “new obligations of funding”—leaving it free to pay out contracts that it entered into prior to January 24, 2025—and indeed, the text of the order does seem to permit that result. Dep’t of State, Memo. 25 STATE 6828. Yet, plaintiffs maintained at the TRO hearing that payments on existing USAID grants have been frozen, preventing certain “contracting officers” employed by USAID from using agency funds to fulfill monetary commitments that the agency had already made.

This factual dispute is relevant to plaintiffs’ TRO arguments, but ultimately is not dispositive of them. Plaintiffs allege that, by some legal mechanism, USAID contracting officers can be held personally liable for existing contractual expenses that USAID is supposed to, but does not, pay. Plaintiffs thus argue that those officers face irreparable harm as a result of the funding freeze because they will be left “holding the bag” when USAID imminently fails to disburse funds. Separately, plaintiffs argue that the general population of USAID employees will be emotionally harmed by the agency’s inability to pay its contractors because they will be stuck “watching a slow speed train wreck” as the agency reneges on its humanitarian commitments.

Even assuming the funding freeze indeed prevents payments on existing grants in the way plaintiffs claim (instead of merely preventing USAID from entering new obligations, as the government suggested during the hearing), the Court concludes that plaintiffs have not demonstrated resulting irreparable harm.

But because this suit involves employees, rather than states or other recipients of funds from Treasury (as is the case in the two suits where DOJ has said it will appeal), these plaintiffs themselves are not being injured because they’re still being paid.

DOJ is hiding behind career AUSAs making claims they likely do not know are false so as to shut down appropriations that have already been approved.

And they are appealing each instance in which a plaintiff has genuinely been injured (the states and Hampton Dellinger’s firing) in hopes — or maybe expectation? — after the Circuits deny appeals that are not yet ripe, SCOTUS will step in and render Congress impotent.

Update: USAID Inspector General somehow managed to put together a report on the damage the chaos is having. Among other things, it finds that the cuts have incapacitated any means of vetting disbursements to keep them out of the hands of terrorists.

USAID describes partner vetting as a risk-mitigation tool to “ensure that American taxpayer funds do not benefit terrorists and their supporters.” Currently, partner vetting is required for programming in Afghanistan, Iraq, Lebanon, Pakistan, Syria, West Bank/Gaza, and Yemen where designated terrorist organizations such as Hamas, Hezbollah, ISIS, and Ansar Allah (also known as the Houthis) operate. Before the Agency awards a contract, grant, or cooperative agreement in these locations, the proposed awardee must submit to USAID data needed to vet the organization and its key personnel. The same vetting must be undertaken before an aid organization issues a subaward. While USAID OIG has previously identified gaps in the scope of partner vetting, 10 USAID staff have reported that the counter-terrorism vetting unit supporting humanitarian assistance programming has in recent days been told not to report to work (because staff have been furloughed or placed on administrative leave) and thus cannot conduct any partner vetting. This gap leaves USAID susceptible to inadvertently funding entities or salaries of individuals associated with U.S.-designated terrorist organizations.