A federal judge appointed by President Donald Trump ruled against the administration on Monday, finding that it improperly withheld tens of millions of dollars in congressionally approved funding from the National Endowment for Democracy (NED).Newsweek reached out to the White House for comment via email on Monday.Why It MattersNED's lawsuit raised questions about the role Congress plays in managing the country's budget and whether the executive branch has the authority to unilaterally pause funding that has already been approved by the legislature.The NED was also one of several organizations focused on promoting democracy and the rule of law that were targeted by the Trump administration and Elon Musk, then the head of the Department of Government Efficiency, after Trump took office in January. Others, like the U.S. Agency for International Development, the U.S. Institute for Peace, were also systematically dismantled or had their funding gutted over unfounded allegations of widespread corruption and waste, fraud and abuse.What To KnowNED sued the Trump administration over the funds in March, accusing it of illegally withholding the money in violation of the Administrative Procedure Act (APA).The plaintiffs said the halt created a "devastating" cash flow crisis for the organization that forced it to furlough 75 percent of its staff and suspend critical programs while threatening the organization's mission to support pro-democracy movements around the world.NED first asked the court for a temporary restraining order and later for a preliminary injunction enjoining the Trump administration from withholding the remainder of its funding for the 2025 fiscal year.U.S. District Judge Dabney Friedrich, who was appointed by Trump during his first term in 2017, granted the request on Monday."The defendants have likely unlawfully frozen the Endowment's funding," Friedrich, who sits on the federal court in Washington, D.C., wrote in a 15-page ruling.NED, a private, nonprofit organization, was formally recognized in the National Endowment for Democracy Act, which was passed by Congress in 1983.Friedrich wrote that Congress has the "prerogative" to conduct policy-related oversight of the organization and approve its funding, while NED's board of directors is responsible for ensuring it complies with the purposes laid out in the NED Act.The executive branch, Friedrich wrote, is tasked with funding the endowment. But evidence in the case "clearly shows" that the Trump administration is "withholding funding" from NED "for impermissible policy reasons," the judge added.Friedrich also laid out how the Trump administration's decision to halt NED's funding severely hampered the organization's function."It was unable to fund 226 approved grants, 124 grants recommended for approval by the Board, and 53 core institute projects. These are activities that the Endowment, in consultation with Congress, has determined are 'important and time-sensitive' to furthering 'critical election monitoring, helping democracy activists overcome authoritarian censorship, [and] maintain[ing] access to independent news and information,'—in other words, to fulfilling the Endowment's mission," Friedrich wrote. "The defendants have fallen woefully short of providing an 'annual grant' that 'enable[s]' the Endowment to fulfill its statutory purposes."The judge also rejected the government's argument that it withheld NED's funding to "ensure" its "level of funding in the coming fiscal year.""Before and during litigation, the defendants obstructed routine drawdown requests on money already set aside in the Endowment's Treasury account, imposed and then abandoned a novel waiver requirement, and delayed the obligation of apportioned funds," the judge wrote.She went on to note that she did not need to rule on whether the defendants were barred from imposing an "alternative apportionment schedule in all instances.""The Court merely finds that the defendants may not withhold appropriated funds under the present conditions: on the grounds that the Endowment's projects do not align with the Executive's priorities," Friedrich wrote."In sum, subjecting $95 million of the Endowment's funding to 'review for alignment with Administration priorities,' ... is precisely the kind of extra-statutory requirement prohibited by the NED Act," Friedrich wrote. "Accordingly, the Court concludes that the Endowment is likely to succeed on its claim that the defendants violated the NED Act."What People Are SayingPeter Roskam, a former GOP congressman who chairs NED, told the New York Times in an interview after the board voted to sue the Trump administration: "We'd be delighted to learn that this was just an oversight and someone just forgot to hit the send button. But clearly that's not what's going on."Musk attacked NED in an X post in early February, writing: "NED is RIFE with CORRUPTION!! What is going on here?"What Happens NextThe Trump administration has not weighed in on Friedrich's ruling as of publication, but it will likely appeal the decision, as it has done in most major court rulings since Trump took office.Update 8/11/25, 7:32 p.m. ET: This article has been updated with additional information and context.