US Government Efficiency Agency Restructured After Privacy Scandal
The US Department of Government Efficiency (DOGE) initiative is being folded into the Office of Personnel Management following the departure of Elon Musk and a major privacy scandal. According to a recent podcast report, DOGE employees shared sensitive Social Security data on non-secure servers, prompting lawsuits and calls from lawmakers like Rep. Laurie Trahan for a complete overhaul of the 1974 Privacy Act.
- The Department of Government Efficiency (DOGE) was created by an executive order on January 20, 2025, replacing the existing United States Digital Service to modernize federal technology and slash regulations. Elon Musk, who initially proposed the idea to Donald Trump, led the initiative as a "special government employee" before departing in May 2025. - The 1974 Privacy Act was passed in the post-Watergate era for a world of "file cabinets and mainframe computers." Representative Trahan's modernization blueprint aims to address current technologies like cloud storage, AI, and the federal government's increasing use of commercial data brokers. - A key proposal in the push to reform the Privacy Act is "algorithmic disgorgement," which would mandate the deletion of algorithms and AI systems that were developed using unlawfully obtained government data. - The Office of Personnel Management, which is set to absorb DOGE's functions, has a history of significant cybersecurity vulnerabilities. In 2015, OPM experienced one of the largest-ever breaches of U.S. government data, compromising the security clearance records and personal information of 22.1 million people, an attack attributed to Chinese state-sponsored actors. - The United States lacks a single comprehensive federal data privacy law equivalent to the European Union's GDPR. Instead, it relies on a mix of sector-specific laws, such as for healthcare or finance, creating a fragmented regulatory landscape compared to the EU's rights-based framework. - During its operation, DOGE teams were given administrative access to agency information systems to terminate contracts and facilitate mass layoffs. A lawsuit filed by the Electronic Privacy Information Center alleged the initiative violated the Federal Information Security Modernization Act (FISMA) by using unsecured hardware to access and store sensitive government data. - Before Musk's appointment to lead DOGE, federal agencies had at least 32 open investigations into his companies. His actions within the government efficiency initiative led to the termination of many of those investigations.
