NYC files suit against Trump administration for taking back more than $80 million in reimbursement for migrant shelters

New York City on Friday filed suit against the Trump administration to recover $80.5 million in FEMA emergency funding for migrants that the federal government clawed back from the city’s coffers after Congress had appropriated it.

The Department of Homeland Security had approved the funding to reimburse the city for money it spent in 2022 on shelter and other services to alleviate overcrowding in short-term migrant facilities run by the Department of Customs and Border Protection.

The city applied for two grants appropriated by Congress to help with the large influx of migrants that were shipped up to the city from border states under the Shelter and Special Services Program.

A balance of $37 million was also granted to the city but has yet to be allocated.

The federal government transferred the money into the city’s bank accounts on Feb. 4, but then a week later "grabbed the money back without any administrative process whatsoever."

In a letter to the city, the Trump administration accused the city of mismanaging the funds and spending them on "illegal activities."

Trump’s efficiency czar Elon Musk posted unsupported claims on social media that the city had spent $59 million on luxury hotels for migrants. Homeland Security Secretary Kristi Noem echoed the claim that "FEMA deep state activists" had "unilaterally" given the money to migrant hotels.

"That money is meant for American disaster relief and instead is being spent on high-end hotels for illegals!" Musk posted on X.

Contrary to the profligate spending characterized by the Trump administration, the lawsuit says that the city had to adhere to rigorous "performance measures" and copious paperwork attesting to how the money had been spent.

In fact, the lawsuit says, the White House, Musk and the Department of Homeland Security pulled back the funding "lawlessly" because it doesn’t support spending money housing migrants.

The lawsuit comes amid a groundswell of calls for Mayor Eric Adams to resign for his cooperation with the Trump administration’s immigration enforcement crackdown.

Adams recently allowed Immigration and Customs Enforcement officers to look for undocumented migrants on Rikers Island, the city’s main jail.

The mayor, who is currently under indictment on federal public corruption charges, has been accused of striking a deal with the Trump administration to drop the criminal case against him in exchange for cooperation with the White House immigration crackdown. 

Adams pleaded not guilty in his criminal case and denied that he offered any quid pro quo to have the case dismissed.

"The $80 million that FEMA approved, paid, and then rescinded — after the city spent more than $7 billion in the last three years — is the bare minimum our taxpayers deserve," Adams said in a statement.

The White House did not immediately respond to a request for comment.