Don’t Be Fooled; There Won’t Be a DoGE Dividend

Indiscriminate Cuts are Harmful to the Bottom Line

President Trump is a great storyteller. But his stories are often twisted. He spins tales that can simultaneously warp the truth and yet sound quite reasonable. He has mastered the dark art of repeating falsehoods often enough until people start to believe him. Not always, but often enough. And the distortions can come at great cost to the country; costs that may not be realized for months or years to come.

This week’s stories include the suggestion that Ukraine began the current war with Russia; that “He who saves his Country does not violate any Law;” and that the cuts to federal employment being orchestrated by Elon Musk’s DoGE team will be a huge savings to the federal government and the American people. The President even said he wants to use those DoGE savings to send taxpayers checks and repay the national debt, a so-called “DoGE Dividend.” It all sounds great. Who is against finding the value proposition in the U.S. Government? And who is against getting a rebate check?

But the indiscriminate firing of thousands of federal workers will not save money. Do you really think laying off 6,000 employees at the Internal Revenue Service, announced this week, will yield a financial return ? Will it lead to more accurate tax returns and more tax compliance? There’s plenty of history and research that say otherwise. Firing IRS workers may feel good to some. But whatever savings will be realized from the firings will be negated many times over by tax cheats who go undiscovered.

We’re not here to defend the value for money of every single federal government employee or every department of government. We were government lawyers for many years, and trust us, we know there’s waste and cuts to be had. But we also know that arbitrary cuts won’t help the government’s bottom line. And we know that hacking away at the Justice Department and the Inspectors General will actually hurt the bottom line. OPM’s “forking” view — that, “The way to greater American prosperity is encouraging people to move from lower productivity jobs in the public sector to higher productivity jobs in the private sector” — is just wrong. Here are a few examples of the “low productivity” work that our former DOJ colleagues do on behalf of the American taxpayer —

The federal government spends over a trillion dollars a year on health care, and there are a lot of bad actors who attempt to defraud the program. Since 2007, the Health Care Fraud unit of the Justice Department’s Criminal Division Fraud Section has charged more than 5,400 defendants with fraudulently billing Medicare, Medicaid, and private health insurers for more than $27 billion. The Department’s Health Care Fraud Strike forces across the country work together with the Department of Health and Human Services’ Office of Inspector General (HHS-OIG) to investigate, prosecute, and exclude crooked doctors and others from participating in federal health care programs. In June 2024, the Health Care Fraud unit and U.S. Attorneys’ Offices across the country charged nearly 200 defendants with committing over $2.7 billion in health care fraud. In FY 2024, HHS-OIG’s investigative and audit work was expected to yield $7.13 billion in recoveries. The recovered funds go back to Medicare and other programs. If anything, we need more of this enforcement. Trump summarily fired the HHS Inspector General, explaining, “Some people thought that some [IGs] were unfair or some were not doing their job.”

About ten days ago, the Vice President visited East Palestine, Ohio, site of the horrific 2023 train derailment that spewed hazardous materials, including hydrogen chloride and phosgene, into the air of his home state. The Vice President vowed that, “the environmental cleanup has to get done,” calling it a “tragedy and a shame” that the Biden Administration didn’t do it. What he left out was that the Justice Department’s Environment and Natural Resources Division (ENRD) obtained a $310 million settlement in May 2024, requiring Norfolk Southern to pay for past and future cleanup costs, enhance rail safety, secure health monitoring, and remediate other harms of the accident. The DOJ team was composed of approximately eight attorneys – that comes out to about $38,000,000 recovered per lawyer. ENRD and EPA have been prime targets for DoGE. And don’t forget, too, a decade ago these ENRD attorneys helped obtain a $20 billion settlement against BP to clean up the Deepwater Horizon spill in the Gulf of Mexico America.

In October last year, TD Bank pled guilty for failing to maintain adequate anti-money laundering safeguards, which, Department of Justice prosecutors showed made it an easy target for transnational criminal organizations, kleptocrats, cyber criminals, terrorists, drug cartels, and other bad actors to launder their illicit proceeds through the U.S. financial system. The bank agreed to pay over $1.8 billion in penalties. Prosecutors had earlier obtained nearly $9 billion from BNP Paribas for sanctions violations and opening its accounts to adversary countries. Also last year, the Justice Department distributed the final payments to victims of the Bernie Madoff Ponzi scheme, paying out over $4.3 billion in forfeited funds to defrauded investors. It paid out about $6 billion to victims of terrorist attacks. And it prosecuted Binance – yes, crypto – which pled guilty and agreed to pay $4 billion to resolve anti-money laundering charges.

In 2024, settlements and judgments obtained by the DOJ’s Civil Division under the False Claims Act exceeded $2.9 billion. The False Claims Act imposes liability upon federal contractors who defraud government programs and incentivizes whistleblowers to come forward. The Civil Division continues to recoup taxpayer losses due to fraud related to pandemic-related programs, has sued defense contractors ripping off the Pentagon, and has gone after fraud to return funds to Medicare, Medicaid, and TRICARE.

The DOJ’s Tax Division has fewer than 400 attorneys who prosecute and sue the nation’s most egregious tax cheats. The Division is funded at a cost of about $130 million but averages $300 million in annual affirmative recoveries and defends close to $10 billion of refund litigation. The Division has prosecuted and obtained billions of dollars in fines and restitution against Swiss Banks who conspired to aid U.S. taxpayers dodge their taxes, and together with the IRS, compelled tens of thousands of Americans with offshore accounts to emerge from the shadows and pay back nearly $11 billion in taxes on previously hidden income.

And if you still think DoGE cuts are about saving money and improving productivity, remember that among the first steps DoGE took was to rescind offers to hundreds of law students who were ready to volunteer for DOJ this summer. For those attorneys who actually get paid, at the top of the GS scale, a DOJ attorney earning a GS-15 salary maxes out at around $76/hour in base pay. At high-end white shoe law firms that defend clients against these prosecutors, a first year associate fresh out of law school can be billed out at $850/hour.

These are just a few examples of the hidden – and not-so-hidden – value of federal workers. There are prosecutors who go after violent criminal gangs, terrorists, child predators, human traffickers, corruption, uphold disability rights, and prosecute hate crimes where the value added is more opaque. While it’s certainly worth asking how they directly contribute to cash flow, without them, there would be more crime at great cost to American citizens. And remember too that when the lawyers in the Civil Rights Division take bad and corrupt cops off the street, they save millions of dollars in lawsuits for cities across the country.

The Justice Department is a great value for the American people. So is the IRS. So are most other federal agencies. Yes, cuts may be needed, but remember that the federal work force accounts for only around 4% of the budget. Indiscriminate hacking at the federal workforce will be a money loser for the government. The returns on investment already produced by our former colleagues are tremendous and have paid real dividends back to the national fisc. The President tells a good story. It’s just often wrong.