DHS Withdraws $80 Million from New York City, Citing Misuse of Funds
New York City recently faced an unexpected financial setback when the Department of Homeland Security (DHS) removed $80 million in federal funding from the city’s accounts without prior notification. City officials discovered the missing funds on February 12.
According to DHS Secretary Kristi Noem, the decision to retract the funds was due to allegations of misuse involving FEMA funds to accommodate undocumented migrants at the Roosevelt Hotel. Noem stated in a social media post on February 13, “I have clawed back the full payment that FEMA deep state activists unilaterally gave to NYC migrant hotels.”
Noem’s statement, however, does not fully align with the facts. The $80 million was initially received by New York City in late January as part of the Shelter and Services Program. This program, created by Congress, reimburses local governments for providing aid to migrants. Although it is administered by FEMA, the funds originate from a different section of the federal budget.
The Shelter and Services Program enabled New York City to offer approved services to migrants, for which the city was compensated with the federal funds.
In response to the withdrawal, New York City Comptroller Brad Lander expressed confusion during an interview with MSNBC’s Chris Hayes. Lander remarked, “They gave us this money and Congress authorized it. We sent them an invoice detailing all the expenses … they sent us the money and approved the invoice. But lo and behold, they yanked it right back. It is highway robbery.”
This incident marks an unprecedented move by the Trump administration, as it was the first time federally disbursed funds were retracted after being issued. Although the payment was still in a probationary phase, Lander described the revocation as “unprecedented.”
Noem’s assertions regarding the Roosevelt Hotel have been contested. The hotel, a 100-year-old establishment, closed in 2020 and reopened in 2023 with the aim of providing migrants access to case workers, basic medical care, and temporary housing, contrary to claims of it being a luxurious accommodation for undocumented individuals.
New York City has found itself under increased scrutiny from the Trump administration in recent weeks. Allegations have emerged that the White House pressured federal prosecutors to drop criminal charges against Mayor Eric Adams in return for his cooperation with deportation efforts. Both Mayor Adams and the White House deny these allegations.
The Adams administration initiated a lawsuit against the federal government on February 15, seeking restitution for the revoked funds. Additionally, Brad Lander is set to challenge Mayor Adams in the upcoming 2025 New York City mayoral election.
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