White House says some employees were fired by mistake

Former U.S. Office of Government Ethics director David Huitema -- who was dismissed by President Donald Trump from his role on Monday -- joined ABC News Live Prime Wednesday, voicing concerns for the future of the agency.

The agency oversees government officials' compliance with ethics and conflict-of-interest rules.

Huitema was confirmed by the Senate in December for a five-year term, but his dismissal was abruptly announced on Feb. 10 in a single sentence on the Department of Government Efficiency website.

"We're entering a new phase now... where real substantive concerns about ethics and integrity can arise. And my sense is that the president just doesn't want an Office of Government Ethics that's empowered to take those issues seriously and speak to them," Huitema alleged.

-ABC News' Maria Olloqui

As Elon Musk’s Department of Government Efficiency works to dismantle the Consumer Finance Protection Bureau (CFPB), the Trump administration on Wednesday was hit with a third lawsuit challenging the legality of the effort.

The filing -- from the City of Baltimore and a local nonprofit -- alleges the administration is attempting to leave the CFPB "defunded and dead in the water" and is acting without congressional approval.

The lawsuit specifically called out the Trump administration for attempting to utilize the CFPB’s statutory funding mechanism to effectively starve the agency.

With the CFPB drawing its funding directly from the Federal Reserve System, the Trump administration plans to stop drawing the funds necessary to support the CFPB’s work, according to the lawsuit.

The lawsuit asked the court to block acting CFPB director Russell Vought from taking any steps to defend the CFPB.

-ABC News' Soo Youn and Peter Charalambous

New York Attorney General Letitia James said she is ready to defend her state from the Department of Justice's lawsuit against New York over its alleged resistance to supporting the Trump administration’s crackdown on illegal immigration.

"Our state laws, including the Green Light law, protect the rights of all New Yorkers and keep our communities safe. I am prepared to defend our laws, just as I always have,” James said in a statement Wednesday.

The Green Light law allows New York residents to get a driver's license regardless of citizenship or legal status.

-ABC News' Aaron Katersky

As the Office of the Secretary of Defense continues to examine its policy on transgender troops, the Department of the Army disclosed new guidance that notably directs the Army not to initiate any adverse personnel action solely because of a soldier's transgender status.

The policy -- revealed in a court filing in a case challenging the executive order -- also directs the Army leadership to allow any soldier to continue receiving medical care to transition or treat their gender dysphoria.

"At this time, do not initiate any medical board or adverse personnel action solely related to transgender status. Policy and implementation guidance related to current executive orders will be published when available," read the unclassified memo titled "Implementation of Executive Orders Related to Transgender Military Service."

The policy also instructed service members not to use any personnel or medical system to identify transgender soldiers.

"All service members will be treated with dignity and respect at all times," the memo said.

-ABC News' Peter Charalambous and Luis Martinez