Mayor Adams and New York City on Friday sued President Trump and the federal government over the “lawless money grab” of $80 million from a city bank account earlier this month.
The suit, filed in Manhattan federal court, accuses the Trump administration of violating federal law by seizing back the grant money, and it argues that the feds must give the funds back and be blocked from dipping their fingers into the city’s pockets again.
“The $80 million that FEMA approved, paid and then rescinded — after the city spent more than $7 billion in the last three years — is the bare minimum our taxpayers deserve,” Adams said in a statement. “And that’s why we’re going to work to ensure our city’s residents get every dollar they are owed.”
The Trump administration revoked from the city the $80.5 million payment, which was congressionally appropriated and issued by the Federal Emergency Management Agency’s Shelter and Services Program on Feb. 11, according to the suit.
That take-back came after Elon Musk previously threatened to claw back funds that he falsely claimed the city had spent on housing migrants in “luxury hotels.”
The feds completed the “lawless money grab with a veneer of administrative process” and then attempted to “mask” that with court filings seeking the ability to withhold FEMA funds, Muriel Goode-Trufant, the city’s top lawyer, wrote in the complaint.
The federal government also sent the city a “noncompliance” letter that did not specifically address any rules broken by the city, but instead relied on unsupported claims that the Roosevelt Hotel, one of many city migrant shelters that receives federal funding, was overwhelmed with crime and gang activity, according to the suit.
The city is seeking orders that would force the feds to give the funds back, stop them from taking more grant money from city bank accounts and prevent them withholding future FEMA funds.
The grant money was disbursed through an Automated Clearing House, or ACH, transfer, the typical way government agencies electronically move money, according to the suit.
City Hall says it has spent around $7 billion in total on migrant services.
The funding drama has played out as the mayor has come under fire over the Trump Justice Department’s order to dismiss his federal corruption case. Acting Deputy Attorney General Emil Bove wrote in his motion that Adams needed to be relieved of the case in order to better help carry out the president’s agenda in New York City.
Adams has been accused of taking a corrupt quid pro quo deal to help Trump in exchange for legal help — a claim the mayor denies.
This suit is the first legal battle between New York City and Trump.
The White House and the Department of Homeland Security, which oversees FEMA, did not immediately respond to requests for comment.
City Comptroller Brad Lander, who is running for mayor, whose office first found the clawback, took credit for the lawsuit in a statement.
“After my office discovered that Elon Musk and his DOGE goon squad stole $80 million out of the city’s coffers, we successfully pressured Mayor Adams to allow the city’s lawyers to sue the federal government to get our money back,” Lander said. “The lawyers who are 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.”
Adams said last week the city was considering taking legal action and that his team had reached out to the White House to explain that the city needed the funds because President Biden’s administration “left us with a huge price tag” relating to the migrant crisis.
Last week, the Department of Homeland Security also fired four FEMA employees “for circumventing leadership to unilaterally make egregious payments” to New York, according to a DHS statement.
Elon Musk publicly credited his Department of Government Efficiency with discovering the disbursement, but neither Musk nor DOGE are named in the lawsuit. A spokesperson for the mayor said this was because it was not clear to the city whether DOGE was included in the decision-making, but that “John Doe” and “U.S. Department or Agency” were included in the suit as possible placeholder plaintiffs.
Secretary of Homeland Security Kristi Noem claimed responsibility for the funding reversal a day after it was complete, writing on social media that she had “clawed back the full payment that FEMA deep state activists unilaterally gave to NYC migrant hotels.”
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