The Trump administration reappropriated funds from a New York City bank account without warning, the city alleges.
New York City filed a lawsuit against the Trump administration on Friday for rescinding $80.5 million in grants earmarked for the city’s cost of housing illegal immigrants.
The complaint, which was filed in Manhattan federal court, outlines why New York City rebuffed accusations by federal officials that it misappropriated funds, arguing that the funds were legally appropriated by Congress and were outside the authority of the president to seize them.
The White House on Feb. 11 reclaimed funds originally sent to the city through the Federal Emergency Management Agency’s (FEMA) Shelter and Service Program (SSP)for illegal immigrant aid.
According to the lawsuit, the federal government failed to follow FEMA procedures and federal regulations.
The city argues it applied for and was awarded the funds, which were paid to reimburse expenses it had already incurred while mitigating a stem of illegal immigrants into the city beginning in the spring of 2022.
FEMA sent funds to New York City Feb. 4. A week later the agency recaptured the funds.
In the lawsuit, the city claims the funds were taken back without notice or administrative process, which is in violation of SSP grant terms.
Homeland Security Secretary Kristi Noem announced the move in a post on social media platform X on Feb. 12.
“I have clawed back the full payment that FEMA deep state activists unilaterally gave to NYC migrant hotels.”
New York City requests the court to order the $80.5 million returned, as well as an injunction against similar actions in the future.
“With very little help from the federal government, our administration has skillfully managed an unprecedented crisis, which has seen over 231,000 people enter our city asking for shelter,” New York City Mayor Eric Adams stated in a city press release.
Adams said the city has spent more $7 billion on the migrant crisis in the last three years.
“And that’s why we’re going to work to ensure our city’s residents get every dollar they are owed. Thank you to Corporation Counsel Goode-Trufant and the entire team at the Law Department for working to ensure New York taxpayers can start to be made whole again.”
Elon Musk stated in a Feb. 10 post on X that the Department of Government Efficiency (DOGE) found that $59 million of the $80.5 million was used to house illegal immigrants in luxury hotels.
“Sending this money violated the law and is in gross insubordination to the President’s executive order,” Musk wrote.
Noem also said that the city used the funds to make the Roosevelt Hotel in midtown Manhattan a shelter for illegal immigrants, which resulted in it being used as an operating base for the Venezuelan gang Tren de Aragua.
The city said that Musk’s social post was inaccurate, and that claims about the Roosevelt Hotel were unsubstantiated.
It said the funds were disbursed to the city in order to support sheltering and related activities provided by non-federal entities to relieve overcrowding in short-term holding facilities of the U.S. Customs and Border Protection.
“Today’s suit — filed in the U.S. District Court for the Southern District of New York — argues that the letter is a mere cover to mask the real purpose of defendants’ ’money-grab,’ which — as many have stated publicly — is to withhold the funds permanently because they oppose the purposes for which the funds were appropriated, awarded, approved, and paid,” the city stated in a press release.
The mayor said the city’s immigration system is broken, but rejected the notion that the city should not foot the bill to fix it without federal support.
Adams met Feb. 13 with White House border czar Tom Homan.
“We are now working on implementing an executive order that will reestablish the ability for ICE agents to operate on Rikers Island—as was the case for 20 years—but now, instead, ICE agents would specifically be focused on assisting the correctional intelligence bureau in their criminal investigations, in particular those focused on violent criminals and gangs,” Adams said in a press release after the meeting.