Labor & Employment Law Daily Wrap Up, FEDERAL LEGISLATION—Taxpayer Data Protection Act would affect federal employees’ access to financial data, (Feb 14, 2025)

By Jonathan Anderson

Access to the data would be allowed only by certain Treasury Department officers, employees, and contractors and certain individuals who hold an appropriate security clearance.

A bill in Congress to restrict access to certain government payment systems holds important implications for federal officials, employees, and contractors. The legislation, sponsored by House Democrats, makes it unlawful for any individual to use, exercise administrative control over, or otherwise access any Treasury Department public money receipt or payment system, or any data from any such system, except by two categories of people: certain Treasury Department officers, employees, and contractors and certain individuals who hold an appropriate security clearance. Anyone with a personal financial conflict who accesses the data could face criminal penalties.

Background. On Feb. 6, 2025, U.S. Rep. Haley Stevens (D-MI), introduced H.R. 1101, the Taxpayer Data Protection Act. The legislation comes amid reports that Elon Musk and individuals working under him, at the behest of President Donald Trump, have accessed federal computer systems and databases containing sensitive data and personally identifiable information about government workers and American citizens.

Limitation on payment system access. The bill prohibits the Treasury secretary from allowing any individual to use, exercise administrative control over, or otherwise access any payment or public money receipt system of the Bureau of the Fiscal Service within the Department of the Treasury, or any data from any such system, except by two categories of people.

Officers, employees, contractors. The first category covers certain Treasury Department officers, employees, and contractors. This exemption applies to Treasury Department officers, employees, and contractors (1) who otherwise are eligible to access such system or data; (2) whose most recent performance ratings were at the fully successful level or higher (or the equivalent thereof); and (3) who, as of the date of such access, occupied a position in the civil service or had been performing under a contract with the department for at least one year.

Security clearance holders. The second category covers any individual: (1) who holds an appropriate security clearance granted pursuant to the procedures established under 50 U.S.C. § 3161; (2) whose access does not constitute a violation of 18 U.S.C. § 208; who is not a special government employee as defined in 18 U.S.C. § 202; whose current continuous service in the civil service as of the date of such access is for a period of at least one year; who has completed any required training or compliance procedures with respect to privacy laws and cybersecurity and national security regulations and best practices; and who has signed a written ethics agreement with either the Treasury Department or the Office of Government Ethics.

Conflict of interest. The act mandates that anyone who accesses the federal government’s central payment system with a personal financial conflict faces criminal penalties, according to U.S. Rep. Hakeem Jeffries (D-NY), the House minority leader.

IG oversight. The bill provides that the Treasury Department’s inspector general shall investigate, and submit a report to Congress on such investigation, each instance of unauthorized use or other access of any payment system. The report shall include a detailed description of the unauthorized use or access, including any actions the individual carried out; a risk assessment of any threat to privacy, national security, cybersecurity, or the integrity of the applicable system as a result of such unauthorized use or access; and a detailed description of any stopped payments during the unauthorized use or access.

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