NEW YORK (1010 WINS) — Mayor Eric Adams and New York City filed a federal lawsuit on Friday challenging the Trump administration’s seizure of $80 million in funding previously distributed by the Federal Emergency Management Agency (FEMA) for migrant services.
City Hall said that the funds were applied for, awarded, approved and paid to reimburse NYC for expenses it has incurred during the asylum seeker humanitarian crisis. The suit alleges that the over $80 million disbursement that was made on Feb. 4 was removed from a city bank account on Feb. 11 without notice or any administrative process, violating federal regulations and terms of the Shelter and Service Program (SSP) grant.
The SSP grant was part of a program to assist cities bearing the brunt of costs while providing shelter to people released by the Department of Homeland Security. The lawsuit alleges that the seizure is a “lawless money-grab” meant to permanently withhold funds because the Trump administration opposes the purposes for their use.
According to Adams, the city has spent more than $7 billion on services for over 231,000 people who have sought asylum in NYC over the last three years, and the FEMA funds would help make up for the “very little help” provided by the federal government thus far.
“Without a doubt, our immigration system is broken, but the cost of managing an international humanitarian crisis should not overwhelmingly fall onto one city alone,” Adams said. “The $80 million that FEMA approved, paid, and then rescinded … is the bare minimum our taxpayers deserve. And that’s why we’re going to work to ensure our city’s residents get every dollar they are owed.”
One day before the funds were clawed back, Elon Musk accused FEMA on social media of granting millions to NYC for it to house undocumented migrants in “luxury” hotels.
“That money is meant for American disaster relief and instead is being spent on high-end hotels for illegals! A clawback demand will be made today to recoup those funds,” Musk wrote, also calling the disbursement a “gross insubordination to the President’s executive order.”
The DHS sent a “noncompliance” letter to the city Department of Management and Budget on Feb. 19 but did not list any specific rules broken by the city that initiated the clawback. Instead, the DHS relied on claims that the Roosevelt Hotel—one of many migrant shelters that utilizes federal funding—was experiencing high levels of crime and gang activity. It also states that DHS is “concerned” that entities receiving payment from the grant may be guilty of aiding and abetting illegal immigration.
“DHS/FEMA has a responsibility to ensure that it does not make payments that fund criminal activity,” the letter said.
The city’s lawsuit seeks orders that would force the federal government to return the funds, stop it from taking more grant money from city bank accounts and bar it from withholding future SSP funds.
“The Trump administration, without any notification or administrative process, and in violation of federal regulations and grant terms, unilaterally took back more than $80 million, which they attempted to justify in a belated ‘noncompliance’ letter,” NYC Corporation Counsel Muriel Goode-Trufant said. “We are seeking relief to recoup the money and prevent this from happening again.”
FEMA’s total expected contribution to NYC’s migrant response is $237.3 million, with $74.4 million already received, including $25.5 million from the SSP and $49 million from the Emergency Food and Shelter Program (EFSP).
The lawsuit comes as Adams is under fire for an alleged quid pro quo deal to help President Donald Trump implement his administration’s immigration agenda in exchange for the dropping of his federal corruption case. The mayor denies these claims and invoked the city's lawsuit filed Friday as evidence.
Judge Dale Ho on Friday decided to cancel Adams’ corruption trial and appoint counsel to advise the court about the Justice Department’s request to drop charges against the mayor. The written order indicates that Ho won’t decide before mid-March whether he will grant the dismissal.