Heinrich, Luján Demand Further Investigation into Trump Administration’s Unlawful Dismantling of the Minority Business Development Agency

WASHINGTON - U.S. Senators Martin Heinrich (D-N.M.) and Ben Ray Luján (D-N.M.) sent a letter demanding the Government Accountability Office (GAO) investigate potential violations committed during the U.S. Department of Commerce's illegal dismantling of the Minority Business Development Agency (MBDA), the only federal agency tasked with promoting the growth and competitiveness of minority-owned businesses. As a member of the Senate Commerce Committee, Senator Luján called on the Trump's Commerce Department to provide an update on the status of the MBDA which the administration has tried to illegally dismantle.

On March 14, 2025, President Trump issued an Executive Order aimed at eliminating the MBDA and other federal agencies. Despite an earlier commitment from U.S. Department of Commerce Secretary Howard Lutnick that he would not eliminate the MBDA, following Trump's Executive Order, the Commerce Department proceeded to carry out the illegal dismantling of the MBDA.

In April 2025, 21 State Attorneys General filed a lawsuit seeking to put a stop to the destruction of the MBDA. In May 2025, the federal district court issued a Preliminary Injunction that prohibited further implementation of Trump's Executive Order and directed the Commerce Department to reverse its dismantling of the MBDA. In November 2025, a Permanent Injunction ordered the Trump Administration to reverse its actions and restore MBDA's personnel and grantmaking capacities. The Commerce Department ignored these court orders and took several actions to dismantle the MBDA, including terminating the funding for at least nine MBDA business centers and sending Reduction in Force (RIF) notices to terminate the last 24 employees still working at the agency.

"[N]ew information has come to light indicating Secretary Lutnick and other Department officials may have violated - and may continue to violate - a May 13, 2025, Preliminary Injunction and subsequent November 21, 2025, Permanent Injunction issued by a federal district court ordering the Trump Administration to reverse its actions against the MBDA and restore its personnel and grantmaking capacities," the senators wrote to GAO Comptroller General Orice Williams Brown. "Congress has a compelling interest in ensuring executive branch officials comply with court orders guarding against unlawful attempts to dismantle federal agencies like the MBDA, which Congress statutorily authorized and funded on a bipartisan basis."

"Although the Department later rescinded the RIFs after Congress passed legislation requiring it do so and before the district court could rule on whether the Department's actions violated the court's order, the court admonished the Administration 'that it is never acceptable to violate a court order' and warned any such violations may 'warrant further Court action,'" the senators continued. "These developments, coupled with the Department's lack of transparency regarding its actions toward the MBDA, raise serious questions about the sufficiency of the Department's protocols for ensuring compliance with the district court's orders and whether Department leadership is violating the court's clear commands."

The senators concluded their letter by urging the GAO to expand its investigation to include possible violations of federal district court orders by Commerce Department leadership and to assess whether the Department has taken adequate steps to ensure compliance.

The letter was led by U.S. Senator Maria Cantwell (D-Wash.). Alongside Heinrich and Luján, the letter was signed by U.S. Senators Maria Cantwell (D-Wash.), Ed Markey (D-Mass.), Tammy Baldwin (D-Wisc.), and Lisa Blunt Rochester (D-Del.).

The senators' letter follows a June 2025 letter in which Heinrich and Luján slammed the Trump Administration for its illegal dismantling of the MBDA and asked the GAO to investigate whether actions by Trump Commerce Department officials or others in the Administration violated Congressional directives, the extent to which they undermined MBDA's Congressional mandate, and whether any officials have engaged in misconduct.

Senator Luján championed an amendment in the Bipartisan Infrastructure Law to make the MBDA permanent. He also secured passage of a provision to double the funding level for the MBDA's Rural Business Development Center Program and to expand this program's eligibility to include all Minority-Serving Institutions, which will expand opportunities for New Mexico's colleges and universities. Additionally, in 2021, Senator Luján championed legislation to make permanent and expand the reach of the Minority Business Development Agency.

In May 2025, Heinrich sent two letters to Keith Sonderling, Acting Under Secretary of the MBDA, demanding he turn over key documents and information related to the dismantling of the MBDA and that he detail the Trump Administration's compliance with a federal court injunction blocking their illegal dismantling of the agency.

In October 2024, Heinrich led the unveiling of a new, larger office space for the New Mexico Minority Business Development Center in Albuquerque to expand support for local businesses across the state. Heinrich wrote the legislative provision that established and funded the New Mexico Business Center in 2020, securing more than $2.5 million in federal resources through the U.S. Department of Commerce's Minority Business Development Agency for its staffing and programming.

The full text of the letter is available HERE and below.

Acting Comptroller Brown:

On June 3, 2025, we requested the Government Accountability Office (GAO) conduct a comprehensive review of the actions taken by the Department of Commerce (Department) under the leadership of Secretary Howard Lutnick to unilaterally dismantle the Minority Business Development Agency (MBDA). Since then, new information has come to light indicating Secretary Lutnick and other Department officials may have violated-and may continue to violate-a May 13, 2025, Preliminary Injunction and subsequent November 21, 2025, Permanent Injunction issued by a federal district court ordering the Trump Administration to reverse its actions against the MBDA and restore its personnel and grantmaking capacities. Congress has a compelling interest in ensuring executive branch officials comply with court orders guarding against unlawful attempts to dismantle federal agencies like the MBDA, which Congress statutorily authorized and funded on a bipartisan basis. Accordingly, we request GAO expand its ongoing inquiry to evaluate whether Secretary Lutnick or other Administration officials have violated the court's orders and assess the adequacy of the policies and protocols the Department has implemented, if any, to ensure compliance.

On January 29, 2025, Secretary Lutnick appeared before the Senate Committee on Commerce, Science, and Transportation and testified he did not support dismantling the MBDA. However, on March 14, 2025, President Trump issued Executive Order (EO) 14238, which purported to eliminate the MBDA and other federal agencies. Notwithstanding his testimony, Secretary Lutnick proceeded to unilaterally dismantle the agency-terminating almost all of MBDA's staff and canceling its grant programs. Of the 40 individuals employed at the MBDA before the EO, only five employees remained working at the agency after Secretary Lutnick began implementing the order.

On April 4, 2025, 21 State Attorneys General filed a lawsuit seeking an injunction against any further implementation of the EO. As part of that case, an MBDA employee submitted a sworn declaration to the court explaining how the remaining five employees would "not be capable of carrying out MBDA's statutorily mandated functions, administering its existing programs, or spending its appropriated funds" because it was "not possible for five employees to monitor the existing portfolio of grants for waste, fraud, and abuse, or to ensure that they are being used for authorized purposes consistent with the grant award," all of which "requires consistent contact with grantees to monitor and evaluate grantee performance, train, conduct site-visits, and to ensure compliance" with the grants' terms. The MBDA employee also informed the court that "MBDA allowed its contract with Salesforce to expire," making it "particularly difficult" to adequately monitor grants without this management platform.

On May 13, 2025, the federal district court issued a Preliminary Injunction that both prohibited any further implementation of the EO and ordered the Department to reverse its implementation. This included "tak[ing] all necessary steps to restore" MBDA employees "involuntarily placed on leave or involuntarily terminated" and "resum[ing] the processing, disbursement, and payment of already awarded funding" and any "funds previously withheld" to the States due to the EO. Following the district court's order, multiple Senators sent a letter to the Acting Under Secretary for MBDA seeking information about how the agency intended to comply with this Preliminary Injunction-but, consistent with Secretary Lutnick's pattern of stonewalling Congress, the Department has refused to provide any relevant information.

Despite the court's clear order, the Department has taken several actions that appear to violate its terms. First, in a September 2, 2025, letter to the Office of Inspector General, the Acting Director of MBDA Business Centers revealed that the Department had "terminated or discontinued" funding for at least nine MBDA business centers as of August 29, 2025-months after the district court's order took effect. Then, on October 10, 2025, the Department sent Reduction in Force (RIF) notices to the 24 employees who then-remained working at the MBDA stating their positions were being eliminated due to supposed "lack of funding" and because their functions "are not consistent with the Secretary's priorities."

The Department implausibly claimed the RIF-which would eliminate every employee working at the MBDA and leave only one political appointee responsible for carrying out all of the agency's required functions -would "not prevent the Department from fulfilling its statutory obligations." In a sworn declaration, an MBDA employee explained to the court how effectuating these obligations requires "experienced MBDA employees to expend approximately 20 hours per week per grant" and affirmed it is "not feasible that one or two political appointees who lack training and experience in grants management" could carry out those duties. Although the Department later rescinded the RIFs after Congress passed legislation requiring it do so and before the district court could rule on whether the Department's actions violated the court's order, the court admonished the Administration "that it is never acceptable to violate a court order" and warned any such violations may "warrant further Court action."

These developments, coupled with the Department's lack of transparency regarding its actions toward the MBDA, raise serious questions about the sufficiency of the Department's protocols for ensuring compliance with the district court's orders and whether Department leadership is violating the court's clear commands. Therefore, to supplement the review requested in our June 3, 2025 letter, we request GAO also examine and provide a detailed report on the Department's compliance-or lack thereof-with the May 13, 2025, Preliminary Injunction and November 21, 2025, Permanent Injunction issued by the District Court of Rhode Island in State of Rhode Island v. Trump, and any policies or protocols the Department has implemented to ensure its compliance.

Sincerely,

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