Adams sues Trump over $80M seized from NYC
Photo courtesy of Michael Appleton/ Mayoral Photography Office on Flickr
New York City sued the Trump administration last week over the $80 million in federal funding the White House took back without consent. The city’s Law Department said it was challenging the president’s decision to revoke Federal Emergency Management Agency funding approved to reimburse the city for migrant housing expenses. The lawsuit seeks to recover the funds and prevent the federal government from improperly revoking or withholding future funding that the city is entitled to receive.
City Comptroller Brad Lander’s office first noticed the funds missing from the city’s private bank accounts on February 11.
According to the New York Times, FEMA rescinded payments via the Automated Clearing House, or ACH, from the city’s Citibank account. The administration never notified the city before taking the funds back.
Mayor Eric Adams, who has been accused of complying with Trump’s immigration policies in exchange for having his federal bribery and fraud charges dropped by the Justice Department, announced the lawsuit on Friday.
“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.
“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. The $80 million that FEMA approved, paid, and then rescinded — after the city spent more than $7 billion in the last three years — is the bare minimum our taxpayers deserve. And that’s why we’re going to work to ensure our city’s residents get every dollar they are owed.”
The suit argues that the funds—which were already reviewed, approved, and distributed by FEMA—were unlawfully removed from a city bank account without any notice or administrative process.
According to the lawsuit, this action violates federal regulations and the terms of the Shelter and Services Program (SSP) grant, marking an abuse of the federal government’s authority to implement congressionally approved and funded programs.
“As alleged in the complaint, 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 in a press release. “We are seeking relief to recoup the money and prevent this from happening again.”
FEMA first disbursed the $80,481,861.42 in funds to the city of New York on February 4 under SSP, a Congress-funded program to “support sheltering and related activities provided by non-federal entities, in support of relieving overcrowding in short-term holding facilities of the U.S. Customs and Border Protection.”
The agency awarded NYC the grants to ensure “the safe, orderly, and humane release of noncitizen migrants from DHS short-term holding facilities.” However, on February 11, the federal government revoked the funds without notice.
Then, on February 19, it issued the city a belated “noncompliance” letter that failed to identify any actual violations but instead raised “unfounded concerns,” misrepresenting how the city has managed the migrant crisis.
The city’s suit argues the letter serves as a “mere cover” to conceal the administration’s true intent, which is to withhold funds simply because they oppose the purposes for which the money was approved and awarded.
The Law Department also argues withholding these funds is “arbitrary and capricious, contrary to law, ultra vires, and in excess of authority without observance of lawful procedures.”
Additionally, the department says the Trump administration’s actions violate the Due Process Clause, the separation of powers doctrine, and the Spending Clause of the U.S. Constitution.
NYC is seeking a preliminary and permanent injunction, along with a temporary restraining order from the court ordering the defendants to return the $80 million to the city’s bank account. The suit also aims to prohibit the defendants from withdrawing any additional SSP grant funds and to prevent them from withholding future SSP funding.
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