Heinrich, Luján Slam Trump Administration for Illegally Gutting Agency Dedicated to Growing Local Businesses

Amid Commerce Department’s stonewalling, senators ask GAO to investigate if Trump officials violated the law or engaged in misconduct & what officials are doing with funding Congress appropriated to serve minority enterprises & create jobs

WASHINGTON — U.S. Senators Martin Heinrich (D-N.M.) and Ben Ray Luján (D-N.M.), a member of the Senate Commerce Committee, joined U.S. Senators Maria Cantwell (D-Wash.), Tammy Baldwin (D-Wis.), Lisa Blunt Rochester (D-Del.), and Ed Markey (D-Mass.) to slam the Trump Administration for its illegal dismantling of the Minority Business Development Agency (MBDA). The senators asked the U.S. Government Accountability Office (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.

“On May 2, 2025, the White House released its recommendations on discretionary funding levels for fiscal year (FY) 2026, which expressly acknowledge that the Commerce Department under Secretary Howard Lutnick has ‘fully eliminated’ the MBDA,” the senators wrote in a letter to GAO Comptroller General Gene Dodaro. “Prior to this admission, my colleagues and I repeatedly raised concerns about the Department’s efforts to dismantle the MBDA unilaterally, particularly given Secretary Lutnick’s clear testimony during his confirmation hearing stating he did not support dismantling the agency. We sent multiple letters to Secretary Lutnick and the Department seeking basic information about the current state of the MBDA. To date, the Department has failed to substantively respond to any of our requests, and it is becoming increasingly clear that Department leadership is not taking these concerns seriously.”

The senators have raised concerns and demanded accountability and answers from the Trump Administration since the president issued his unlawful executive order. This letter follows a letter the senators wrote to Keith Sonderling, Acting Under Secretary for MBDA, demanding the Trump Administration detail its compliance with a May 13 federal court injunction ordering it to stop the illegal dismantling of the agency and reinstate its personnel and grantmaking capacities. The senators previously sent a May 1, 2025 inquiry to Sonderling to demand he promptly turn over key documents and information related to the dismantling of the MBDA and recent funding termination notices sent to all grantees by DOGE. On June 3, the senators also sent a letter to the Government Accountability Office (GAO) requesting that they 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.

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 as they create the types of careers New Mexicans can build their families around. 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.

In May, during the Senate Commerce hearing on the nomination of Paul Dabbar to be U.S. Deputy Secretary of Commerce, Luján pressed Mr. Dabbar on the dismantling of the MBDA by the Trump Administration and highlighted the successes of the MBDA. 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, Luján championed legislation to make permanent and expand the reach of the Minority Business Development Agency.

The text of the letter can be found HERE and below:

Comptroller General Dodaro:

We write to request that the Government Accountability Office (GAO) conduct a review of the actions taken by the Trump Administration to dismantle the Minority Business Development Agency (MBDA), despite Congress statutorily authorizing the agency and appropriating funding to further its mission. A robust investigation by GAO would help shed light on whether officials at the Department of Commerce (Department) or elsewhere in the Administration circumvented the directives of Congress, the extent to which the MBDA’s ability to administer its grants and combat potential fraud has been undermined, and whether any officials have engaged in misconduct.

On May 2, 2025, the White House released its recommendations on discretionary funding levels for fiscal year (FY) 2026, which expressly acknowledge that the Commerce Department under Secretary Howard Lutnick has “fully eliminated” the MBDA. Prior to this admission, my colleagues and I repeatedly raised concerns about the Department’s efforts to dismantle the MBDA unilaterally, particularly given Secretary Lutnick’s clear testimony during his confirmation hearing stating he did not support dismantling the agency. We sent multiple letters to Secretary Lutnick and the Department seeking basic information about the current state of the MBDA. To date, the Department has failed to substantively respond to any of our requests, and it is becoming increasingly clear that Department leadership is not taking these concerns seriously.

The MBDA was created by Executive Order in 1969. In 2021, Congress statutorily authorized the MBDA in bipartisan legislation, the Minority Business Development Act of 2021 (MBDA Act), which was enacted as part of the Infrastructure Investment and Jobs Act. In so doing, Congress directed the MBDA to, among other things, “enable the Federal Government to better serve the needs of minority business enterprises.” The bipartisan law also established a new Senate-confirmed position to lead the agency. By making the MBDA and its programs permanent, Congress made a deliberate decision to promote job creation, spur innovation, and support business owners from a variety of backgrounds.

Last Congress, the Congress funded the MBDA pursuant to the Consolidated Appropriations Act, 2024, which contained a $68.25 million appropriation for the “necessary expenses of the Minority Business Development Agency in fostering, promoting, and developing minority business enterprises, as authorized by law.” These investments have paid significant dividends: In FY 2024 alone, the MBDA helped the country’s more than 12 million minority businesses access over $1.5 billion in capital and create or retain approximately 23,000 jobs. That same level of funding has been appropriated through the Full-Year Continuing Appropriations and Extensions Act, 2025 (P.L. 119-4). 

Despite Congress’s clear statutory directive, on March 14, 2025, President Trump issued an Executive Order effectively eliminating the MBDA and certain other federal entities. In so doing, the Executive Order called for the head of the MBDA to submit a report to the Office of Management and Budget within seven days “confirming full compliance with this order and explaining which components or functions of the governmental entity, if any, are statutorily required and to what extent.” In the weeks that followed, the Trump Administration has unilaterally dismantled the MBDA—terminating effectively all its staff, canceling its grant programs, and removing its signage from the Department.

As part of these efforts, our offices reviewed a funding termination notice that was sent to an MBDA grantee by a member of Elon Musk’s so-called Department of Government Efficiency (DOGE) named Nate Cavanaugh, who was purportedly acting “Under the Authority of Keith Sonderling, Acting Undersecretary of MBDA.” In the notice, the Department claims the grant is being terminated because it “is unfortunately no longer consistent with the agency’s priorities and no longer serves the interests of the United States and the MBDA Program.” The termination notice further states that “MBDA is repurposing its funding allocations in a new direction in furtherance of the President’s agenda.” The notice is silent about why the grants are inconsistent with the MBDA’s priorities and programs, which Congress, not the Department, set by statute. And the notice also suggests that the Department of Commerce or others in the Administration may be using funding appropriated for the MBDA for other, unrelated purposes.

Fortunately, on May 13, 2025, a federal district court issued a Preliminary Injunction requiring the Trump Administration to reverse its actions to eliminate the MBDA, including by restoring agency employees to their status prior to the Executive Order issued on March 14, 2025. However, the Trump Administration quickly appealed this order, making clear it intends to continue pursuing its efforts to fully eliminate the MBDA notwithstanding Congress’s clear directives.

It is essential that Congress and the public understand how the Trump Administration’s recent actions have affected the MBDA’s ability to carry out its statutory mission and obligations and to understand how funds appropriated to the MBDA are being used. Therefore, we are requesting your assistance to investigate activities that have occurred at MBDA since January 20, 2025, and report on the following:

1. A detailed review of all actions taken by the Department of Commerce, including any acting leadership, to “fully eliminate” or otherwise dismantle the MBDA, including any efforts to pause or halt MBDA work functions, lower or eliminate the agency’s budget, or otherwise reduce the resources available to MBDA to complete its work.

2. A detailed review of all actions taken by the any member of DOGE, including any volunteers, special government employees, contractors, or Department employees affiliated with DOGE, to “fully eliminate” or otherwise dismantle the MBDA, including any efforts to pause or halt MBDA work functions, lower or eliminate the agency’s budget, or otherwise reduce the resources available to MBDA to complete its work.

3. A detailed review of actions taken by the Department of Commerce, including MBDA leadership and acting leadership, to pause, halt, or terminate any grants or funding that were administered or approved by the MBDA as of January 20, 2025. Please include information on the involvement of DOGE or DOGE-affiliated employees, including any volunteers, special government employees, and contractors, in decisions to pause, halt, or terminate MBDA grants or funding.

4. A detailed review of the status of all MBDA grants, including:
   1. The extent to which grants have been terminated or funds continue to be disbursed;
   2. A description of the types of funded activities that are considered “consistent with the agency’s priorities” and that “serve the interests of the MBDA program”; and
   3. A detailed explanation of how the MBDA intends to repurpose its funding allocations in a new direction in furtherance of the President’s agenda, including any specific program or activity that has received or is expected to receive repurposed funding.

5. A detailed review of actions taken by the Department of Commerce, including MBDA leadership and acting leadership, to reduce the MBDA’s workforce after January 20, 2025. Please include information on the involvement of DOGE or DOGE-affiliated employees, including any volunteers, special government employees, and contractors, in decisions to reduce the MBDA’s workforce.

6. A detailed review of the effects of recent Department of Commerce and DOGE actions on:
   1. The operations of the MBDA’s statutorily created offices, how responsibilities are being allocated to any remaining staff, and the status of physical office space; and
   2. The ability of the agency to fulfill its statutorily required functions under the Minority Business Development Act of 2021 (Division K of the Infrastructure and Investment and Jobs Act, Pub. L. 117-58), including but not limited to:

                                                              i.      The MBDA’s statutory responsibilities for private and public sector development;

                                                           ii.      The MBDA’s efforts to conduct research and provide outreach and educational services;

                                                         iii.      The operation of the MBDA’s Business Center Program, Rural Minority Business Center Program, and the national network of public-private partnerships;

                                                          iv.      The administration of the minority business development grants program;

                                                            v.      The functioning of the Minority Business Enterprises Advisory Council; and

                                                          vi.      The extent to which the Administration’s actions regarding MBDA are consistent with the statutory obligations under the Minority Business Development Act of 2021.

1. The ability of the agency to effectively administer its current grants, detect and prevent potential fraud in its programs, and cooperate with any investigations into potential fraud or other wrongdoing. 

7. A detailed review of the Commerce Department’s or MBDA’s development and implementation of plans to reorganize, restructure, or eliminate the MBDA’s work, and how these plans may affect the Administration’s ability to meet its statutory responsibilities, including a review of which “components or functions” of the MBDA the Trump Administration found to be “statutorily required and to what extent,” pursuant to President Trump’s March 14, 2025, Executive Order on “Continuing the Reduction of the Federal Bureaucracy.”

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