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CNN
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An employee tasked with implementing the firings of hundreds of staffers at the Consumer Financial Protection Bureau testified in court Tuesday that she believed the plan to dismantle the agency was still on — appearing to undermine a narrative set forth by the Justice Department a day earlier.
The employee, who testified under the pseudonym Alex Doe out of fear of retaliation, said she attended meetings last week where her team, along with officials at the Office of Personnel and Management, discussed how they would implement Phase 2 of a plan to wind down the CFPB. That step would come after a Phase 1, during which an initial 1,200 employees would be fired, Doe said, but mass terminations are on pause under a court order in the case.
The testimony comes in a case brought by a federal employee union and other groups to challenge President Donald Trump’s efforts to dissemble the bureau, which was created by Congress after the 2008 financial crisis and has long been in the crosshairs of conservatives.
Doe’s testimony countered the picture painted by CFPB Chief Operating Officer Adam Martinez, who spoke as a witness for the administration Monday and Tuesday. Martinez — who is Doe’s supervisor — testified that the Department of Government Efficiency had acted aggressively over one week in early February to try to dismantle the agency. But he said those efforts had been slowed down by political appointees, namely acting CFPB head Russ Vought and legal adviser Mark Paoletta, who became more engaged by mid-February.
Tuesday’s hearing ended with Judge Amy Berman Jackson calling it an “illuminating” two days of testimony and telling the parties she was “concerned about the factual situation.” She stressed that she had not decided whether to issue a preliminary injunction, as the challengers have requested, but she sought input from both sides for how she could write an order that would allow the agency to “hobble” along while the litigation over its potential dismantling continued.
“I want to preserve an agency that could be revived, if necessary,” she said.
Doe’s testimony detailed plans set out in mid-February to quickly lay off the bulk of the CFPB staff, shuttering entire offices of the agency, and then wind down the remaining operations.
She said the plan for mass layoffs and eliminating entire offices “had not changed” as of a February 20 meeting she attended. She also detailed meetings she attended on March 4 and March 6 to discuss unwinding the agency.
She was given the task of implementing the mass layoffs on February 13, a few days after DOGE representatives arrived at the agency, Doe testified, with a goal of laying off the 1,200 employees the following day. Doing so that quickly meant eliminating entire offices and units of the agency, Doe said, without regard to whether those offices served a CFPB function required by statute. There was no discussion about whether the administration needed to Congress’ approval to do so, she said.
Much of Doe’s testimony focused on February 14, which was also the day the legal challenge had its first hearing before Jackson. She testified that she emailed Martinez about 30 minutes before the hearing to suggest they slow down their work, given a court may soon be intervening.
Instead, according to her testimony, she received an instruction from another supervisor directing her to speed things up. At the court hearing that afternoon, the unions and the Justice Department reached an agreement, ratified by court order, to pause mass terminations. Doe testified that she reached out to another senior adviser to inform them of the order, but the adviser told her to move forward with the plans to lay off 1,200 employees that evening because the adviser had not heard otherwise from the agency’s political leadership.
“I said these [termination notices] cannot go out today and that I hope that Mark Paoletta knows how to read a court order,” Doe testified, referring to one of the Trump appointees now at the agency. She was told, according to her testimony, that DOGE was pressuring the team to send out the notices despite the court order. Work continued on the termination notices until 10 p.m., she testified, though they were ultimately not sent out.
Martinez, in his testimony Monday, said he had no reason to believe that the rush to complete the terminations was related to the court case and that his sense was that DOGE generally just wanted to layoffs done as soon as possible.
Much of the Justice Department’s questions for Martinez highlighted that, after Vought ordered the agency to stop work on February 8, Paoletta at Vought’s instruction was green-lighting the reactivation of CFPB work that is required by law. However, when Martinez was questioned by the judge Tuesday about the possibility those functions would eventually just be moved to other agencies, he acknowledged he did not know what the end goal is of the restructuring.
