In an unexpected move, New York City officials discovered an $80 million shortfall in their bank accounts, a result of the Department of Homeland Security (DHS) retracting funds without prior notice. The city was blindsided by this financial withdrawal, which occurred on February 12.
DHS Secretary Kristi Noem took to social media on February 13 to justify the action, stating that the funds were retracted as a punitive measure against New York City for allegedly misusing FEMA funds. According to Noem, these funds were being used to house undocumented migrants at the Roosevelt Hotel.
Noem’s social media post declared, “I have clawed back the full payment that FEMA deep state activists unilaterally gave to NYC migrant hotels.” She further alleged that the Roosevelt Hotel was a base for the Tren de Aragua gang and linked it to a recent criminal incident.
However, this narrative doesn’t fully align with the facts. The $80 million in question was received by New York City at the end of January as part of the Shelter and Services Program. This program, while administered by FEMA, is funded through a distinct section of the federal budget, designed to reimburse localities for migrant-related expenses.
Through this program, New York City had provided services to migrants, which were approved and reimbursed by the federal government. The sudden revocation has left city officials puzzled.
New York City Comptroller Brad Lander expressed his confusion during an interview with MSNBC’s Chris Hayes, saying, “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This incident marks the first time the Trump administration has withdrawn federal funds after disbursement. Lander characterized the move as “unprecedented,” despite the funds technically being in probationary status.
The validity of Noem’s claims concerning the Roosevelt Hotel is also questionable. Despite Republican narratives, including those from President Donald Trump, painting the hotel’s use as providing “luxury accommodations” to undocumented migrants, the hotel actually reopened in 2023 to offer migrants essential services such as case management, medical care, and temporary housing following its closure in 2020.
New York City has found itself in the crosshairs of the Trump administration lately. Allegations have surfaced accusing the White House of coercing federal prosecutors to dismiss criminal charges against Mayor Eric Adams in return for his cooperation in mass deportations—a claim both Adams and the White House refute.
The Adams administration responded by legally challenging the federal government over the fund revocation on February 15. As this unfolds, Lander is also positioning himself as a contender in the 2025 New York City mayoral race.
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