Why Elon Musk’s battle for US treasury data has sparked legal and security concerns

Musk has positioned himself as a cost-cutting watchdog for the federal government. On his social media platform X, he has claimed that his efforts have led to billions in cancelled contracts and grants.

His primary concern? Fraud in government entitlement payments. Musk claims that over $100 billion per year is paid to individuals without valid Social Security numbers (SSNs) or temporary IDs, and he alleges that at least half of that - 50 billion per year - is outright fraud.

To tackle this, Musk and his team proposed changes, including requiring payment categorisation codes and detailed explanations for every outgoing government payment. However, it remains unclear how much of Musk’s claims are based on verified Treasury data versus internal estimates from his team.

Legal challenges and court restrictions

Last week, US District Judge Colleen Kollar-Kotelly issued a temporary restraining order that restricted Musk’s DOGE team’s access to certain Treasury payment systems, limiting them to read-only access. However, a more significant ruling followed when US District Judge Paul A. Engelmayer imposed a full block on Musk’s team from accessing any personal or financial data at the Treasury Department.

The lawsuit against Musk’s access was filed by 19 state attorneys general, who sued Trump, the Treasury Department, and Treasury Secretary Scott Bessent. The judge ruled that allowing Musk’s team to continue accessing federal financial data would cause irreparable harm and create a serious risk of disclosing confidential information.

In addition to blocking future access, the court ordered that anyone who accessed Treasury data since Trump took office (January 20) must immediately destroy all copies of the material downloaded.

Security concerns

Internal reports from the Treasury suggest that Musk’s DOGE team poses a major security risk. According to US media reports, an internal Treasury assessment described Musk’s team’s access as “the single biggest insider threat the Bureau of the Fiscal Service has ever faced.”

The concerns stem from:

• The sensitivity of the financial data involved, which includes government payment records and agency bank information.


• The fact that Musk’s team is composed of political appointees and external hires, raising fears about misuse or leaks.


• The risk that unverified fraud claims could be used to justify major policy changes, potentially harming vulnerable citizens who rely on government aid.
  Musk’s response: ‘Corrupt Judges’ and a broken system.

Musk did not take the court ruling lightly and fired off multiple posts on X, calling the judge’s decision an attempt to ‘protect corruption’ and accusing the system of allowing fraud to go unchecked.

He claimed that Treasury employees at the working level agreed with his findings but were unable to act because previous leadership ignored the problem to avoid complaints. Musk argued that fraud was allowed to persist because “people who receive money don’t complain, but people who don’t receive money (especially fraudsters) complain loudly.”

Musk and his allies, including Vice President JD Vance, have also pushed for the rehiring of Marko Elez, a DOGE team member who was fired over past racist comments.

What’s next?

The current legal restrictions remain in place until at least February 14, when a court hearing will determine whether they should be extended or revised. Until then, Musk’s team is barred from accessing further Treasury data, and the future of his cost-cutting mission remains uncertain.