DOGE, Baited & Switched

Don’t look now, compliance professionals, but remember the DOGE commission’s promises to streamline federal regulation and improve efficiency? That’s all falling apart. Now it’s just another Elon Musk slash-and-burn campaign to break everything and let others clean up the mess. At least some of those others will likely be you.

It seems like just weeks ago — oh, wait; it was just weeks ago — that Musk and his former DOGE leader, Vivek Ramaswamy, wrote an expansive open letter in the Wall Street Journal about how DOGE would work to identify regulations that could go into the dustbin, which would then lead to a smaller workforce, which would then lead to less government spending.

Well, so much for those promises. Ramaswamy was sent packing, and DOGE was shoehorned into the U.S. Digital Service, an agency nobody ever even heard of until just now and don’t you deny it. Now DOGE’s purpose seems to be (a) getting rid of as many government workers as possible, as soon as possible; and (b) seizing control of the payments system at the Treasury Department, so that Musk can use the power of the purse to make everyone dance along to whatever tune he (and who knows, maybe even President Trump too) wants you to sing. 

Folks, that is not regulatory reform. That is not putting the federal bureaucracy on a weight-loss and exercise program, which is indeed much needed. It is performing gastric bypass surgery on the federal government without anesthesia, using a surgical team staffed by Fox News talk show hosts, right-wing podcast guests, and Ayn Rand libertarian fanboys.

None of what we see so far will lead to the easier regulatory burden that DOGE originally promised. On the contrary, corporate legal, compliance, and risk management teams are likely to be even more confused as you try to deal with the government, since “the government” will be a bunch of under-staffed, overworked employees led by a bunch of ill-informed ideologues lurching from one arbitrary decision to another — or, just as likely, not doing anything at all; because at least if the bureaucrat  does nothing, he’ less likely to make a mistake that upsets the Dear Leader and costs him his job. 

Bottom line: whatever DOGE originally purported to be, this ain’t it.

So What About Deregulation, Then?

Well, funny you should ask — the Trump Administration is still lunging forward on that front, too. On Friday night the Administration said it issued an executive order requiring that whenever an agency promulgates a new rule, regulation, or guidance, it must identify at least 10 existing rules, regulations, or guidance documents to be repealed. Sounds great, right? 

Except, so far the Administration hasn’t published the actual text of that order; it only released a summary of what the order supposedly will do, larded with all the usual hagiographic praise of Trump. The only points we know are as follows:

• Whenever an agency promulgates a new rule, regulation, or guidance, it must identify at least 10 existing rules, regulations, or guidance documents to be repealed.  
• The director of the Office of Management and Budget will ensure standardized measurement and estimation of regulatory costs.
• For fiscal year 2025, the total incremental cost of all new regulations, including repealed regulations, must be “significantly less than zero.” 

We can poke so many holes into that language. First, notice that it doesn’t say an agency must actually repeal 10 existing rules or regulations before adopting a new one; agencies only need to identify 10 other rules that should be repealed. There’s no guarantee that those 10 rules ever will be repealed — a process that takes time and money, and can be challenged in court. 

Second, we don’t yet know which areas of rulemkaing might be exempt from the order. In that case, it’s instructive to look at Trump’s previous deregulation executive order, issued in 2017 at the start of his first term. That time around, Trump exempted any regulations “issued with respect to a military, national security, or foreign affairs function of the United States.”

If Trump applies a similar standard now, presumably that will exempt any rules related to sanctions, anti-money laundering, cybersecurity, and even defense contracting. In other words, all the issues most relevant to corporate compliance functions would not be addressed by this 10-to-1 kill order. 

That 2017 order also exempted any regulations “related to agency organization, management, or personnel.” That would exempt the Justice Department’s guidelines for an effective compliance program, since technically that guidance is aimed at federal prosecutors rather than corporations; and it takes the form of questions they should be asking themselves as they evaluate your program.

And what’s that bit about “guidance documents” all about? Will that extend to the speeches and resource guides that compliance officers pore over obsessively? Or to the legal settlements we parse for any scintilla of wisdom and nuance? I bet not. Trump and his minions made pretty much the same promise to crack down on guidance in 2018, and the results fell far short of the promise then. I see no reason to change those expectations now.

What we have, really, is Elon Musk giddily hacking away at the procedures of governance, which will be mighty frustrating for businesses that want clarity and certainty in their interactions with government. 

At the same time, the standards of good corporate conduct that your business must be able to achieve — because in this brave new world, you never know when your business might fall out of favor with Elon or Trump, or simply be collateral damage in the cross-fire of whatever new tweet the president shoots off — that’s all likely to be as sticky as ever.