Unions representing federal workers sued the Treasury Department and its head, Scott Bessent, on Monday in an effort to block Elon Musk and his team from accessing the federal payment system, saying that it amounted to an unlawful disclosure of the personal and financial information of millions of people.
The suit was the latest effort by unions to push back against a flurry of Trump administration directives aimed at undermining the federal bureaucracy. Administration officials have made offers to most of the civilian federal work force seeking resignations, and the dispute over the federal payment system was part of a wider effort to restrict the disbursement of money for programs approved by Congress.
Mr. Musk and his lieutenants, representing an outside advisory group aimed at reducing waste in the federal government, the so-called Department of Government Efficiency, gained access to the Treasury Department’s payment system late Friday.
The move immediately became a key skirmish in Mr. Musk’s wider war on the federal bureaucracy. The Trump administration pushed out a top Treasury Department official who had refused to give Mr. Musk’s team access to the payment system, and former Treasury officials said they were not aware of a political appointee ever before seeking access to its details.
Monday’s lawsuit said that the system, which sends out money on behalf of the entire federal government and disbursed more than $5 trillion in fiscal year 2023, includes sensitive information needed to send payments like tax refunds, veterans’ benefits, salaries for workers and Social Security payments. Federal law heavily restricts disclosure of that data.
The suit accused Mr. Musk and his team that gained access to those records of violating the Privacy Act and the Internal Revenue Code, laws that restrict access to taxpayer and other personal information unless the person is an employee engaged in official duties that require having access to those records. The suit also said Mr. Bessent’s giving Mr. Musk’s team access to the payment system was “arbitrary, capricious,” and exceeded his statutory authority.
Mr. Musk’s allies who were given access to the payment system were made Treasury employees, passed government background checks and obtained the necessary security clearances, according to two people familiar with the situation, who requested anonymity to discuss internal arrangements.
“The scale of the intrusion into individuals’ privacy is massive and unprecedented,” said the 19-page suit, filed in the Federal District Court in Washington. “Millions of people cannot avoid engaging in financial transactions with the federal government and, therefore, cannot avoid having their sensitive personal and financial information maintained in government records.”
It continued, “Secretary Bessent’s action granting DOGE-affiliated individuals full, continuous and ongoing access to that information for an unspecified period of time means that retirees, taxpayers, federal employees, companies, and other individuals from all walks of life have no assurance that their information will receive the protection that federal law affords.”
The American Federation of Government Employees, the largest union of federal employees, representing more than 800,000 workers, filed the suit alongside the Service Employees International Union and Alliance for Retired Americans, a group that represents the interests of retired union workers. All three groups are affiliated with the A.F.L.-C.I.O., an umbrella group of more than 50 unions representing more than 12.5 million workers.
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