DOGE Put Him in the Treasury Department. His Company Has Federal Contracts Worth Millions

WIRED

21-02-2025

Feb 21, 2025 5:01 PM Experts say the conflicts posed by Tom Krause's dual roles are unprecedented in the modern era. Photograph:Over the past couple of decades, a number of US government officials have left their roles for lucrative jobs at tech companies. Plenty of tech executives have also departed to take leadership positions inside federal agencies. But four experts who track the federal workforce tell WIRED they were stunned last week by a development unlike any other they could recall: The Department of Treasury internally announced that Tom Krause had been appointed its fiscal assistant secretary, but that he would simultaneously continue his job as CEO of the company Cloud Software Group.
Krause is now in charge of both a sensitive government payment system and a company that has millions of dollars worth of active contracts with various federal agencies through distribution partners, according to a WIRED review of searchable spending records. The Department of Treasury alone accounts for a dozen ongoing contracts tied to Krause's company that are together valued between $7.3 million to $11.8 million. These include licenses for the data visualization tool ibi WebFocus and purchases of systems called Citrix NetScaler that help manage traffic to apps. (Some publicly posted procurement records do not break out contract details, so actual figures may be even higher.)
Critics have expressed concern about the alleged conflicts of interest posed by Krause's decision to keep his role in the private sector. Cloud Software could benefit from extending its federal contracts or securing additional ones, though there is no public evidence that Krause has done anything improper with his dual roles. Existing federal regulations also bar actual and apparent unjust favoritism in contracting. 'Public trust in those safeguards is nonnegotiable,' says Scott Amey, general counsel at the Project On Government Oversight, a nonpartisan watchdog group.
As Krause moves forward with two jobs, he could have to potentially navigate not only contracting conflicts, but also dueling crises. 'What would happen if a Citrix emergency emerges at the same time as Treasury obligations?' says Jeff Hauser, founder and executive director of the Revolving Door Project, which researches federal appointees. 'Generally, the thicket of restrictions on full time employees would make a CEO role impossible in an administration which took adherence to ethics laws seriously.'
Krause, the Treasury Department, and Cloud Software didn't respond to requests for comment. Cloud Software investors also didn't respond to a request for comment.
The Treasury Department has told Congress that Krause is a 'special government employee'—a type of temporary role—that is supposed to be held to 'the same ethical standards of privacy, confidentiality, conflicts of interest assessment, and professionalism of other government employees.' In a foreword to a code of conduct policy posted on Cloud Software's website, Krause states, 'Cloud Software Group is committed to ensuring that its business is conducted ethically, in compliance with the law, and according to its values of integrity, honesty and respect.'
Krause is among a group of several dozen veteran tech executives, mid-level tech operations managers, and fresh-out-of-school software coders who have been recently installed across a series of federal agencies under the auspices of the self-styled Department of Government Efficiency. DOGE's authority is being challenged by some Democratic state attorneys general. In the meantime, its representatives have been carrying out an order from President Donald Trump to cut costs and modernize technology across the government.
There is some precedent for corporate executives to simultaneously work in the US government. When the US was at war in the early 1900s, the federal government recruited business leaders to fill key posts. They retained their private sector jobs and wages; the government pitched in a $1 annual salary to the executives who became known as 'dollar-a-year men.' Congress later raised concerns that some of them had engaged in self-dealing.
Since then, other executives have continued to retain their jobs as they serve on government boards and commissions, typically in a part-time capacity. But maintaining a day-to-day operational role in both the federal government and at a corporation is now virtually unheard of, says David E. Lewis, a political scientist who wrote a book on appointed government bureaucrats. 'Most persons in regular executive positions divest themselves of private interests before government service,' he says.
Trump, according to his company, has handed management of his businesses, including hotels and golf courses, to his children for the duration of his presidency (though he reportedly still takes meetings that have raised questions among ethics experts). Musk, who is CEO of Tesla and SpaceX and has oversight of four other companies, including X and Neuralink, has been a vocal figure in DOGE's operations, but the White House has said he's not actually in charge—without specifying who is leading the project. Some of the other individuals associated with DOGE are otherwise unemployed, have taken leave, or maintain dual roles but at lower levels than chief executive.
Krause is the only Trump administration official identified so far as being a CEO and a day-to-day decision maker inside one particular agency. After years of working as an executive at chip companies, Krause joined Florida-based Cloud Software Group in 2022. The company was created that year as part of a private equity-backed acquisition of Citrix, followed by a merger with Tibco, another tech company. At the time, Citrix was saddled with an extensive amount of debt and generating essentially stagnant revenues, and while Tibco had not recently publicly disclosed its finances, analysts had considered the company's outlook to be 'negative.'
The US government, including state and local agencies, is expected to spend $287 billion on technology this year, or about 14 percent of overall US tech spending, according to Forrester, a research and advisory company. Whether DOGE's efforts to boost the quality and efficiency of federal IT systems will lead that spending to increase or decrease isn't clear. So far, DOGE has both tried to purchase emerging technologies and moved to cancel some existing contracts. But Krause's inside access could potentially provide an advantage to Cloud Software at a pivotal moment for the company.
Over the past couple of years, Cloud Software has laid off thousands of people and faced accusations that it potentially became lax with cybersecurity. Cloud Software's most well-known offering, Citrix, enables groups of workers to access data and run apps that are located on a remote machine. But increasing adoption of tools that can operate on any device has chipped away at some of Citrix's dominance, according to Will McKeon-White, senior analyst for infrastructure and operations at Forrester. There are other options now, he says, including from Microsoft and smaller companies such as Island.
Cloud Software's Tibco program, which helps workers automate tasks such as adding a new user to multiple internal databases, is often mentioned in the wrong sort of conversations these days, according to David Mooter, a Forrester principal analyst. 'They tend to come up more when somebody wants to abandon them,' he says.
That said, some Cloud Software services are more affordable than alternatives for governments, and they also are better suited for the older infrastructure used by some agencies. Last year appears to have been one of Citrix's best in a long time financially, says Shannon Kalvar, a research director for enterprise systems management and other areas at IDC. One reason for the upswing is that Citrix has put more emphasis on catering to the feature demands of its largest customers, including governments.