WASHINGTON — The Consumer Financial Protection Bureau Chief Operating Officer Adam Martinez painted a hectic picture of the days when representatives of the Department of Government Efficiency attempted to, as he put it, "wind down" the bureau.
The evidentiary hearing
"We're talking about whether there's an ongoing effort to have the agency move forward for its mission or whether this is an effort to dismantle it," Berman Jackson said.
Berman Jackson is considering whether to issue a preliminary injunction to pause the Trump administration's
Berman Jackson ordered another hearing for Tuesday at 1:30 p.m. Martinez will be cross examined, and two witnesses for the CFPB union will be called.
Martinez's testimony is key to this decision. He testified that the Department of Government Efficiency — a rebranded version of the U.S. Digital Service known as DOGE and putatively run by White House advisor and billionaire entrepreneur Elon Musk — came in with the clear intention to shutter the CFPB, as he understood it. DOGE has made aggressive moves in the early days of the Trump administration to dramatically reduce the number of civil service employees and slash public services.
"How do you close the agency and do statutorily required work?" Berman Jackson asked.
Martinez said that his understanding was that the CFPB might still have a small presence, with some statutorily required individuals, and that some of the statutory work would go to other regulators.
He said that he, at one point, told his team that he didn't know what would be left of the CFPB.
"You admitted at that time, you talked about closure of the agency and wind-down mode, whether or not that turned out to be true, [DOGE] led you to believe that would be true?" Berman Jackson asked.
"They led me to believe that, absolutely," Martinez responded.
As DOGE
"Somebody on our career staff team said we need to move to the next room over where the window is covered," Martinez said. "I had stayed behind to check an email, and then all of a sudden I heard just the sheer chaos going on next door. One of our employees unfortunately walked directly into the conference room, started to question everyone around the table."
Martinez also described a mass canceling of contracts that many people, including himself, raised concerns would impede the CFPB's ability to do basic functions and fulfill its legal obligations. While some of those contracts were reinstated, although Martinez could not say from direct experience how many or if the canceled contracts related to statutorily required functions.
"It's like shoot first and ask questions later?" Berman Jackson asked.
"That's what it felt like," Martinez said.
A key point of consideration for Berman Jackson as she considers whether to order the preliminary injunction isn't just how DOGE acted at the agency, but how acting Director Russell Vought and the Office of Management and Budget, which Vought also leads, is leading the agency and whether, looking forward, the bureau's leadership would harm the CFPB
Brad Rosenberg, a Department of Justice special counsel who represented the government in the questioning of Martinez, asked questions that sought to distinguish the actions that DOGE took from those of the OMB and Vought's direct representatives at the bureau, including Mark Paoletta, the chief legal officer at the CFPB and general counsel at OMB.
"DOGE came in with a very hard fist, so to speak," Martinez said in response to one of Rosenberg's questions. "When the OMB directors came in, it felt like the adults were at the table."
"It became increasingly clear that there was misalignment between the DOGE people and the OMB people," Martinez said later.
Berman Jackson appeared at times to have little patience with the points that Rosenberg sought to make.
When asking for a justification for why, before the court order pausing the Trump administration's plans for mass firings of CFPB employees, the new CFPB leadership tried to reduce the number of days for a reduction in force from 60 days to 30, Martinez said that he told OMB the required "emergency" situation was spurred by both President Donald Trump's executive order and the fact that many CFPB employees were on
Berman Jackson said that it was that order "that said you can't work, that became the emergency to justify a [reduction in force]."
"Just to clarify, it was one of two justifications that you provided to OPM, the other one being the president's executive order," Berman directed to Martinez, who confirmed.
Berman Jackson also listed out a series of questions to determine whether the work stoppage or the Trump administration's actions at the CFPB are "normal," a key point of the government's argument against a preliminary injunction. Those actions included the no work order, canceling contracts before analysis, firing all probationary employees, implementing a reduction in force before a new director is put into place and putting employees on administrative leave.
Martinez answers no, these actions are not typical in presidential transitions.
"This is obviously a very unique situation," he said.
Jennifer Bennett, a principal at Gupta Wessler LLP, who questioned Martinez for the CFPB employees group, highlighted at Martinez, in his role, didn't have direct insight into what certain actions taken by the Trump administration — like canceling contracts — would have on the ability of the agency to carry out statutorily required functions.
In response to Bennett's questions, Martinez said that the CFPB is not
Bennett also pointed out that Martinez's first sworn declaration to the court on this issue, issued in February, omitted many of the details that he testified to in court about DOGE's attempts to aggressively shutter the agency.
Martinez knew about plans for mass firings, canceled contracts and canceled purchase cards, terminating the headquarters and eliminating regional offices, Bennett said, adding that he told another employee that he wasn't sure how the agency would recover from the actions taken over the last week. Martinez agreed on these points.
Yet in his declaration — which was given with Martinez's knowledge of those aforementioned conflicts — he supported Vought's moves to fire employees, cancel contracts and shutter the agency's headquarters as part of an orderly transition that is common in presidential administration changeovers.
"You did not mention any of this in your declaration," Bennett said.
"I did not," Martinez responded.
