The City of New York has filed a federal lawsuit against President Donald Trump, members of his administration, and multiple U.S. government agencies for what city officials describe as the unlawful seizure of over $80 million in FEMA funds.
The lawsuit, filed on Friday in the U.S. District Court for the Southern District of New York, accuses the federal government of wrongfully withdrawing funds intended to support the city’s efforts to shelter asylum seekers.
Why Did New York City File the Lawsuit?
According to the city’s legal filing, the Federal Emergency Management Agency (FEMA) reimbursed New York City with $80 million on February 4, 2025, to cover the costs the city had already incurred in housing and supporting asylum seekers.
However, just a week later, on February 11, federal officials reportedly withdrew the funds from the city’s bank account without notice or explanation. It wasn’t until February 19 that FEMA notified the city that the payment was being temporarily withheld.
New York City’s Demands:
- Immediate return of the $80 million in FEMA funds.
- A court order preventing the federal government from seizing or withholding any additional funds from city bank accounts.
“With very little help from the federal government, our administration has skillfully managed an unprecedented crisis,” said Mayor Eric Adams. “The $80 million that FEMA approved, paid, and then rescinded — after the city spent over $7 billion in the last three years — is the bare minimum our taxpayers deserve.”
The Cost of NYC’s Asylum Seeker Crisis
New York City has spent over $7 billion over the past three years to manage the ongoing asylum seeker crisis. The city claims the 231,000 people who have arrived in search of shelter have put immense pressure on public services, especially without consistent federal assistance.
Mayor Eric Adams’ Response:
Mayor Adams criticized the federal government’s decision to pull the funds, arguing that the responsibility of addressing a humanitarian crisis should not fall solely on one city:
“Our immigration system is broken, but the cost of managing an international humanitarian crisis should not fall overwhelmingly onto one city alone.”
FEMA’s Reason for Withholding Funds
The federal government claims the fund seizure was driven by concerns over how the money was being spent. According to FEMA:
- The funds were allegedly used to house migrants in luxury hotels, including the Roosevelt Hotel.
- There were reported links to gang activity involving Tren de Aragua, a Venezuelan criminal organization.
- Officials also cited concerns that the hotel was linked to individuals involved in violent crimes, including the killing of Laken Riley.
A spokesperson for the Department of Homeland Security (DHS) stated:
“There will not be a single penny spent that goes against the interest and safety of the American people.”
City’s Response to Federal Claims:
City officials have called these allegations “unfounded” and argue that there is no evidence linking the hotels used for migrant housing to organized crime.
Political Reactions: Accusations of Corruption and Collusion
City Comptroller Brad Lander accused both President Trump and Mayor Adams of collusion, suggesting that the seizure of funds was politically motivated:
“The lawyers standing up to President Trump and Eric Adams’ collusion deserve praise, and we look forward to Donald Trump returning the money he stole from New York.”
Elon Musk, now head of the White House’s Department of Government Efficiency (DOGE), claimed the funds were misused to provide luxury accommodations for migrants instead of addressing public safety concerns.
