By Pam Martens and Russ Martens: January 28, 2025 ~

Last Friday night, when federal employees thought they could escape to a weekend of relief from Donald Trump’s rewriting of the Constitution by Executive Edict, emails went out to at least 16 Inspectors General – the fraud and abuse watchdogs of Federal agencies – informing  them that they were terminated “immediately,” without citing any grounds for dismissal, a legal requirement since 2022.

What is particularly strange about the mass firings is that many of these IGs were appointed by Trump himself in his first term as President, raising the suspicion that Trump’s current demands for personal loyalty have taken an even darker turn in Trump 2.0.

Mark Lee Greenblatt, the IG of the Interior Department (which Trump now seems eager to sacrifice to the fossil fuel industry) took to LinkedIn on Saturday to express his reaction to being fired as a government watchdog – after work hours, by email. Greenblatt, appointed by Trump as IG in 2019, wrote this:  

“President Trump fired me last night, along with a number of other Inspectors General.

“I poured my heart and soul into my DOI OIG team and the broader IG community. I tried to be the best IG and the best CIGIE Chair I could possibly be. I am incredibly proud of our high-impact work in the highest-risk areas facing the Department and the IG community. We made a difference for the American people.

“I’m just trying to process this right now. It’s all just so surreal.”

“Surreal” may be a bit of a stretch. This is surreal. Trump firing watchdogs is the sine qua non of his presidential career. Also see our report on the Trump 1.0 Friday night ouster of Federal prosecutor Geoffrey Berman here.

If Trump was expecting this cruel destruction of careers and livelihoods by email to frighten other federal workers into submission, it appears to have backfired. There are numerous comments under Greenblatt’s post on LinkedIn by current Interior Department employees, applauding Greenblatt’s performance and appearing to give a thumbs down to his ouster by Trump.

The news of the mass firings made their way to Senator Sheldon Whitehouse (D-RI), the Congressional expert on the corrupting influence of megadonor money in Washington. Whitehouse posted at X (Twitter):

“Corruption 101: Clear out the cops before you send in the thieves.”

The news also outraged 21 ranking (Democratic) members of House Committees, who whipped off a letter to Trump on Saturday, crisply advising him that his mass firings of IGs were illegal. The ranking members wrote:

“The Inspector General Act of 1978, amended in 2022 with broad bipartisan support, requires the President to notify Congress 30 days prior to removal of an inspector general and provide ‘substantive rationale, including detailed and case-specific reasons’ for such removal. The email terminating the inspectors general fails to provide the required notice and a legitimate rationale, as required by law.

“Firing inspectors general without due cause is antithetical to good government, undermines the proper stewardship of taxpayer dollars, and degrades the federal government’s ability to function effectively and efficiently. We urge you to withdraw your unlawful action and comply with your obligations to the American people.”

The Congressional Research Service, the research arm of Congress, has a policy paper on IG removal and updated it expressly to include Trump’s mass firings on January 24. It explains:

“The 30-day notice requirement was established under the Inspector General Reform Act of 2008 (P.L. 110-409), and the requirement that notice include a ‘substantive rationale’ was added by the Securing Inspector General Independence Act of 2022 (Title LII, Subtitle A, of P.L. 117-263)…

“President Trump’s January 2025 action appears to be a direct challenge to the enforceability of Congress’s removal procedures under the IG Act. If this matter is litigated, the executive branch may seek to curtail Congress’s options to control even procedural requirements for removals. A judicial decision limiting Congress’s authority to impose such rules could substantially impact fundamental oversight of agency programs, spending, and staff.”

The White House issued no press release on the firings, leaving media outlets in the position of having to call individual Inspectors General to learn if they had been fired. Thus far, terminations of IGs at the following federal agencies have been reported: Department of Agriculture; Department of Commerce; Department of Defense (now in the hands of Trump appointee Pete Hegseth, accused by multiple persons of being routinely drunk in public); Department of Energy; Environmental Protection Agency; Health and Human Services; HUD; Department of the Interior; Department of Labor; Small Business Administration; Social Security Administration; Department of State; Department of Transportation; Veterans Affairs; and White House Office of Personnel Management.

Note that the Inspector General of the Securities and Exchange Commission (SEC) is not listed in the above tally of firings. Given that Trump and First Lady Melania each issued their own crypto coins just days before moving into the White House, whose trading charts now look like pump and dump schemes, and the SEC is one of the federal agencies that oversees crypto, one would have suspected that its Inspector General would have been the first to be ousted.

As it turns out, the SEC Inspector General is not appointed by the President but by the SEC itself. Deborah Jeffrey has been the Inspector General of the SEC since 2023. She arrived during the tenure of Gary Gensler, a President Biden appointed SEC Chair for whom Donald Trump has had less than kind words. Trump’s stable of crypto megadonors have had even less kind words for Gensler.

Prior to government service, Jeffrey spent 23 years at the law firm of Zuckerman Spaeder LLP, where she defended both government and corporate individuals in criminal investigations. One of her high-profile clients was Lou Pai, the former Chairman and CEO of Enron Energy Services (EES), one of the few top Enron executives to avoid prison time. Pai also had the distinction of being nimble enough to cash out over $268 million of Enron stock before the stock price collapsed and the high-flying energy company filed for bankruptcy protection.

On July 30, 2008, Pai agreed to settle civil insider trading charges brought against him by the SEC for $31.5 million. The SEC wrote the following in its announcement of the settlement:

“Had Enron reported EES’s contract-related losses in its Retail Energy Services segment, that segment would have shown a quarterly loss of at least $60 million, rather than a profit of $40 million as falsely reported in Enron’s Form 10-Q for the first quarter of 2001. Pai knew or should have known that he could not sell Enron stock without first disclosing such material, nonpublic information. By selling Enron stock without disclosing this information, Pai breached his fiduciary duty to Enron shareholders.

“The Commission’s complaint further alleges that Pai avoided substantial losses from these sales when the price of Enron stock collapsed in the fall of 2001. Enron’s stock price averaged approximately $53.78 per share during the time of Pai’s sales, but closed at $0.40 on December 3, 2001 – the day after Enron filed for Chapter 11 bankruptcy protection. By selling his shares in May and June 2001 before the collapse of Enron’s share price, Pai avoided millions of dollars of losses.”

Given this background, it will be interesting to see if Jeffrey is one of the Inspectors General who remains in the Trump 2.0 administration.

The always insightful Robert Reich had some interesting thoughts on the future of the SEC and its regulation of crypto now that Trump has made himself a crypto billionaire with his crypto coin. Reich wrote this on Substack:

“Trump is putting crypto-friendly people into place at key federal agencies, boosting its prospects. In December, he picked Washington lawyer Paul Atkins, a known crypto booster, to chair the Securities and Exchange Commission, America’s main financial regulator. [Atkins has yet to be confirmed by the Senate.]

“Last week, the Securities and Exchange Commission altered its guidance so that financial institutions no longer have to account, on their own balance-sheets, for crypto assets held on behalf of customers. The SEC rolled back accounting guidance that had deterred banks from getting involved with crypto.

“Trump has tapped the venture investor and digital currency enthusiast David Sacks to oversee administration policies on crypto (and artificial intelligence).

“Then, this past Thursday, Trump issued an executive order committing the Trump administration to ‘protecting and promoting’ the crypto industry:

‘The digital asset industry plays a crucial role in innovation and economic development in the United States, as well as our nation’s international leadership. It is therefore the policy of my administration to support the responsible growth and use of digital assets.’

“The order gives his administration authority to establish a national cryptocurrency stockpile — a stash of digital coins that the crypto industry has spent months lobbying the new administration for because it further legitimizes crypto and adds to the demand for it.

“Trump’s order also prohibits the creation of a ‘central bank digital currency’ overseen by the government. And the order promises ‘fair and open access to banking services’ for crypto (responding to complaints from crypto companies that banks have denied them accounts).

‘In effect, Trump is writing the rules for a business venture from which he and his family are personally profiting. It could earn them hundreds of billions of dollars.”

Trump’s view that crypto plays “a crucial role in innovation and economic development” is countered by more than 1600 scientists and experts who call both crypto and blockchain a sham.