NEWS: Ex-Janus Henderson analyst convicted over £1M money laundering and insider trading – AML Intelligence

Two lawsuits to prevent the dismantling of the Institute of Museum and Library Services have met with mixed results in the courts. However, the nonpartisan Government Accountability Office quoted at length from both cases in a new report that finds the gutting of the IMLS to be unlawful.

In Rhode Island v. Trump et al.21 states’ attorneys general can claim a measure of victory, thanks to a preliminary injunction in the District Court of Rhode Island. Meanwhile, in American Library Association v. Keith Sonderling et al.a disappointed ALA and American Federation of State, County, and Municipal Employees are rethinking their strategy after a federal judge in the District of Columbia denied their request for a preliminary injunction and questioned whether the case’s grant-related matters belong not in district court but in the U.S. Court of Federal Claims.

New filings in both cases—a revised complaint and summonses to trial in Rhode Island, and a schedule to determine whether or how to proceed in the District of Columbia—indicate a prolonged uncertainty at least through the summer.

On the horizon looms the Republican-led FY2026 budget proposal, which if adopted will starve IMLS and many other federal agencies out of existence regardless of theselegal decisions. FY2025 ends on September 30. If Congress fails to allocate IMLS funding, the agency’s Grants to States program, discretionary grants, and employment will dry up.

Updates to R.I. and D.C. Cases

Both lawsuits were filed in response to a White House executive order demanding that IMLS and other federal agencies be reduced to their minimum statutory functions. To enforce the March 14 EO, the executive branch appointed Keith Sonderling as IMLS acting director, put 85% of IMLS staff members on paid administrative leave, dissolved the agency’s board of directors, and curtailed the administration of grants. The IMLS terminated statutory grants to California, Connecticut, and Washington, but later reversed that decision.

Chief Judge John J. McConnell Jr. of the District Court of Rhode Island ordered a preliminary injunction on May 13, finding the executive branch’s actions to be unconstitutional overreach and in violation of the Administrative Procedure Act. The order required that grants be processed and employees brought back to work. On June 12, the plaintiffs filed an amended complaint, asking the court to rule that the IMLS closure and decisions are “unlawful and/or unconstitutional because they violate the APA and/or the United States Constitution.”

In the meantime, the defendants have assured the court that they are complying with the preliminary injunction by funding grants and reinstating the workforce. Yet an IMLS staffer in contact with PWwho remains anonymous out of fear of reprisal, alleged that returning workers received a May 19 email that “clearly communicated and reinforced attempts to eliminate staff through trauma, force, and malicious compliance.” The staffer said newly reinstated employees, though eager to fulfill the agency’s mission, were offered a deferred resignation plan with a non-disparagement clause; if they simply resigned without signing the agreement, they would receive no severance pay or unemployment benefits. At the present time it is not clear how many people work in the IMLS office.

Proceeding with the case, the Rhode Island court on June 16 issued individual summonses to 11 defendants, including IMLS acting director Keith Sonderling, President Donald Trump, Secretary of Commerce Howard Lutnick, and the Office of Management and Budget director Russell Vought. Because the defendants are either agencies or officers of the federal government, they have 60 days to respond to the summons, which pushes the case well into August.

ALA v. Nerd likewise is unresolved following Judge Richard J. Leon’s June 6 decision to deny the preliminary injunction sought by the plaintiffs. Judge Leon suggested the case might belong in the U.S. Court of Federal Claims, because it pertains in part to federal contracts and grants, including six competitive grants awarded to ALA.

The parties filed a joint status report on June 13 and made motions to proceed, and the court set a schedule for further motions, to last through late September.

A Word from the GAO

As library advocates were reacting to news about the lawsuits, the GAO—whose duty is to support Congress and the exercise of its power of the purse—issued its own findings on the demolition of the agency.

On June 16, the GAO determined that the executive branch violated the Impoundment Act of 1974 when it prevented agency functions. In a 12-page assessment of its findings, the GAO concluded “that IMLS has violated the ICA by withholding funds from obligation and expenditure,” including “funds that were not eligible for withholding under any circumstance.”

GAO general counsel Edda Emmanuelli Perez, who signed the report, reminded readers that “once enacted, an appropriation is a law like any other.”

The GAO noted that it had reached out to IMLS for information, first requesting a response by May 5 and then by May 12. “At present, we have received no response or other communication from IMLS,” the office reported, and so they have “based this decision upon publicly available evidence,” including Sonderling’s sworn declaration about “partial” and “terminated” grants, in the Rhode Island case.

For now, the funds to fulfill IMLS’s statutory and non-statutory obligations are available. In FY2024, Congress appropriated $294,800,000 to IMLS, and FY2025’s appropriation was the same based on the Continuing Resolution (H.R. 1968) passed by Congress on March 15. In the public documents, the GAO also found that IMLS fulfilled $89,866,698 to grantees in the first five months of 2025, compared to more than twice that amount in the same periods of 2024 and 2023. According to the GAO, “the minimal Grants to States allotment is $680,000, but Congress has provided specific metrics for IMLS to increase or decrease this amount as needed in view of IMLS’s appropriation in any given fiscal year.”

Public libraries, archives, and museums, as well as library and information schools and special collections, benefit from the congressionally appropriated funds and competitive grants that IMLS provides. Legal decisions on the fate of IMLS, along with actual compliance by a thus-far intractable administration, would ensure that IMLS functions in the near term.

In a recent email to supporters, library advocacy organization EveryLibrary shared the findings of the GAO report and urged recipients to sign a petition opposing the proposed FY2026 budget, email members of Congress to oppose the budget, and donate to EveryLibrary. “We want to be clear: if the administration wants to shut down IMLS or redirect its mission, it must go to Congress,” EveryLibrary wrote. “The courts in the Rhode Island case and GAO have now affirmed that neither Executive Orders nor internal policy changes are substitutes for the legislative process.”

Library and information science professionals are continuing to watch the case with grave concern. At Cornell University, university librarian and vice provost Elaine Westbrooks told PW that she is the principal investigator on a multi-year IMLS grantawarded through the competitive Laura Bush 21st Century Librarian program in 2023. The research team had intended to apply for “a bigger, more consequential grant” from IMLS, but the national upheaval had them looking to private foundations and state government.

“Eliminating IMLS funding would have a devastating nationwide impact, particularly on local library communities including rural and tribal libraries, and it would further widen the digital divide,” Westbrooks said. If there is any bright side to be found, she added, “This situation has helped us reinforce the importance of libraries, which are a cornerstone of democracy and essential to thriving communities.”

  • Related Posts

    Anti-Money Laundering Roundtable

    An independent artist has filed class action lawsuits against both Sun and Share for allegedly using his music to train their AI models. Both documents make reference to another lawsuit…

    Malaysian court drops money laundering charges against jailed ex-leader Najib Razak

    As the legal fallout of a Texas bankruptcy judge’s undisclosed romance with a local lawyer heads to mediation this week, the most influential player won’t even be in the room.…

    Leave a Reply

    Your email address will not be published. Required fields are marked *