By Jonathan Stempel
NEW YORK (Reuters) -New York City sued the Trump administration on Friday for clawing back $80.5 million of grants intended to cover part of the city’s cost of housing migrants.
In a complaint filed in Manhattan federal court, New York City rejected claims by federal officials that it was misusing the funds, and said the February 11 “money grab” thwarted Congress’ purpose in appropriating the money.
City officials sued after the funds paid on February 4 by the Federal Emergency Management Agency, part of the Department of Homeland Security, went missing from a bank account, having been clawed back by the agency.
Kristi Noem, the homeland security secretary, posted on the social media platform X on February 12: “I have clawed back the full payment that FEMA deep state activists unilaterally gave to NYC migrant hotels.”
The White House did not immediately respond to a request for comment on the lawsuit. New York City wants the $80.5 million returned and an injunction against similar further takings.
President Donald Trump, a Republican, has accused FEMA of wasting taxpayer money in Democratic-led areas.
Trump adviser Elon Musk said, without providing evidence, in a February 10 post on X that his government efficiency team had found that $59 million of the $80.5 million went toward housing migrants in “luxury” hotels.
“Sending this money violated the law and is in gross insubordination to the President’s executive order,” Musk wrote.
Noem and a FEMA official also asserted that the city misused FEMA funds to turn the Roosevelt Hotel in midtown Manhattan into a migrant shelter, and allowed the Venezuelan gang Tren de Aragua to use the hotel as a base of operations.
The city said Musk’s post was “filled with inaccuracies,” while statements by Noem and the FEMA official that migrants housed at the Roosevelt had engaged in criminal activity were “unsupported.”
In a statement announcing the lawsuit, New York City’s Democratic mayor, Eric Adams, said “our immigration system is broken,” but the cost of fixing it should not overwhelmingly fall on the city alone.
“The $80 million that FEMA approved, paid and then rescinded – after the city spent more than $7 billion in the last three years – is the bare minimum our taxpayers deserve,” Adams said.
Adams separately faces criminal corruption charges brought last September under the Biden administration. Trump’s Department of Justice wants to dismiss that case, to free Adams to help Trump crack down on illegal immigration.
(Reporting by Jonathan Stempel in New York; Additional reporting by Jasper Ward in Washington, D.C.; Editing by Chris Reese and William Mallard)
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