Civil Suit Argues NEH Was Complicit in DOGE’s ChatGPT-Fueled $100 Million Slashing of “DEI” Grants and Employee Terminations

Deposition videos and discovery materials released as part of a civil lawsuit related to Elon Musk’s Department of Government Efficiency (DOGE) funding cuts reveal the now defunct department used ChatGPT to identify more than $100 million in grants related to diversity, equity and inclusion (DEI) that were later cancelled. The cuts were the largest mass termination of federal grants in the history of the National Endowment for the Humanities (NEH), one of largest funders of humanities programs in the US. DOGE also terminated 65 percent of NEH employees and closed related programs as part of its slashing spree, all with the consent of Michael McDonald, NEH acting chair from March 2025 to January 2026.

The new materials reveal DOGE succeeded in gutting 97 percent of NEH grants in just 22 days. McDonald told deposition lawyers he was the “final decider” for all grant terminations and took responsibility for the decisions. But documents show that DOGE staff terminated grants his team had recommended the agency keep. “As you’ve made clear, it’s your decision on whether to discontinue funding any of the projects on this list,” McDonald wrote to the DOGE team in an email from April 1, 2025.

Two young DOGE employees with no government experience testified that they used OpenAI’s ChatGPT and terms like DEI, DEIA, Equity, Inclusion, BIPOC (black, indigenous, people of color) and LGBTQ to determine which grants might be cut. Nate Cavanaugh, one of the employees, said he was part of the effort to cut “useless agencies” to reduce the federal deficit.

“Why is a documentary about Holocaust survivors DEI?” an attorney asked DOGE employee Justin Fox. “It’s a gender-based story that’s inherently discriminatory to focus on this specific group,” Fox said of the project, which documents violence against women during the Holocaust.

“Did you ever find it problematic that you were, alongside Nate, short-listing for termination projects that had hits on words like Black, homosexual, LGBTQ+?” an attorney asked Fox.

“We were identifying wasteful spend in the government based on administration direction,” said Fox. “That was the whole reason we were there, was to find savings.”

An attorney asked Cavanaugh if he had any regrets about the ramifications of his actions, including people losing jobs and financial support.

“No,” said Cavanugh. “I think it was more important to reduce the federal deficit from $2 trillion to close to zero.” When asked if DOGE had successfully reduced the federal deficit, Cavaugh responded, “No, we didn’t.”

The lawsuit was filed by the Modern Language Association (MLA), the American Council of Learned Societies and the American Historical Association. It calls the employee terminations “unconstitutional” and claims NEH violated the First Amendment by targeting grants for their viewpoints and perceived political associations.

It also argues that NEH violated the equal protection clause by flagging grant descriptions as “DEI” solely because they included terms such as “BIPOC,” “homosexual,” “LGBTQ” or “Tribal.” The NEH and its leaders are also accused of violating the separation of powers by allowing DOGE to carry out the termination of grants, which was done without Congressional approval.

The lawsuit also reveals DOGE staff drafted and sent termination letters to grantees on McDonald’s behalf that contained factual errors. The notices referred to an executive order as the basis for termination that mandated the NEH “eliminate all non-statutorily required activities and functions.” No executive order exists. McDonald said in the deposition that he did not review the letter “as closely as perhaps I should have.” 

Fox sent the termination notices himself, using a Microsoft email account. McDonald testified it was the first time he could recall in his decades at NEH that the agency’s duties were carried out by another part of the federal government.

“The facts in this case have exposed the administration’s total disregard for the democratic process and for the value of the humanities that the NEH exists to promote,” said Paul M. Krebs, executive director of the MLA, in a statement. “Through this lawsuit, we have been able to document in detail the haphazard and unlawful actions of DOGE as these unqualified agents undermined the separation of powers and denied the American people access to vital public programming and research.”