NYC sues Trump after FEMA claws back $80 million migrant housing grant

New York City sued President Trump on Friday after his administration clawed back $80 million sent to the city for housing migrants.

Citing concerns of “illegal activity,” the Trump administration took back the sum as it seeks to crack down on the program, which is funded by Congress and administered by the Federal Emergency Management Agency (FEMA).

The federal government disbursed $80.5 million to New York City’s central bank account on Feb. 4 but took back the payment without warning on Feb. 11, the lawsuit states.

After the program came under fire this month, fueled by Elon Musk and posts on social media, administration officials announced they were suspending payments.

“No lawful procedure permits Defendants—as they did here—to take back grant funds previously approved and paid without legitimate basis and without first following and complying with the steps required under the applicable rules, grant terms and conditions,” reads the complaint.

“Defendants have acted lawlessly, but have attempted, after the fact, to mask this fact with a semblance of following procedure,” it continued.

The Hill has reached out to the Justice Department for comment.

As migrant encounters on the southern border increased, Congress in 2019 authorized the Shelter and Services Program (SSP). It enables FEMA to deliver grants to nonprofits and local governments assisting with an influx of migrants released into the country by federal immigration authorities. The grants can cover food, transportation, basic medical care and shelter.

The program has come under increasing criticism as Musk looks to massively slash government spending as part of his Department of Government Efficiency. Much of the condemnation has focused on how New York City houses some migrants in the Roosevelt Hotel.

The program has also become the subject of false claims that it is diverting funds away from people suffering from natural disasters, like the victims of Hurricane Helene in North Carolina. SSP is a separate pot of funding from FEMA’s main disaster relief fund.

Friday’s lawsuit was filed in federal court in Manhattan by the New York City Law Department, which handles the city’s legal affairs.

The lawsuit pushes back on the administration's justification that it pulled the funding because the grant wasn't being used in compliance with federal law, describing the clawback as a "money-grab."

"Simply put, the 'noncompliance' letter is pretextual, a cover for Defendant's real
intent, which—as they've stated publicly—is to withhold the funds permanently because they
oppose the purposes for which the funds were appropriated, awarded, approved, and paid," the complaint states.

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