Elon Musk has taken to his elevated role in the federal government with glee, rummaging through numerous agencies in search of allegedly misused funds in the name of his newly created Department of Government Efficiency. Now the Tesla CEO’s slash-and-grab tactics have hit New York City under the guise of reeling in government waste.
On Wednesday, Comptroller Brad Lander said his office discovered that the Trump administration had clawed back $80.5 million in FEMA-allocated funds from the city the previous day. Lander said the money stems from the Shelter and Services Program, which was established in 2023 and is funded by Congress.
“This is money that the federal government previously disbursed for shelter and services and is now missing. This highway robbery of our funds directly out of our bank account is a betrayal of everyone who calls New York City home,” Lander said in a statement.
Who committed that robbery isn’t much of a mystery. On Monday, Musk claimed on X that the federal government had previously sent $59 million to the city to house migrants in hotels. “Sending this money violated the law and is in gross insubordination to the President’s executive order. That money is meant for American disaster relief and instead is being spent on high end hotels for illegals!” he exclaimed.
Musk’s comments prompted a response from new FEMA administrator Cameron Hamilton who announced that the payments have been suspended and said that responsible personnel “will be held accountable.” The Department of Homeland Security later announced that four FEMA employees had been fired Tuesday, alleging that they had “circumvented” leadership to provide payments for migrants to stay in luxury hotels but providing no additional information into their claims. Per the press release, the employees released include the agency’s chief financial officer, a grant specialist as well as two program analysts.
Musk’s claims about the intended purpose of the allocated funds appears to be inaccurate. The American Immigration Council notes that though the Shelter and Services Program is distributed through FEMA, its funding comes from a part of the budget that’s separate from disaster relief.
Mayor Eric Adams confirmed that his office learned about the revoked funds this morning, saying in a statement that the FEMA grants had been allocated under the Biden administration but only disbursed last week. The mayor said that City Hall has “already engaged with the White House about recouping these funds” and has requested an emergency meeting with FEMA to discuss the issue. “The Corporation Counsel is already exploring various litigation options,” he added.
Though legal action appears to be on the table, it would be a markedly different shift in Adams’s own relationship with the Trump administration, which has grown friendlier in recent months. Since Trump was elected, Adams has made significant overtures to the president, refraining from any criticism of him and vowing to work with his team despite their opposing political parties. Earlier this week, the mayor learned that the Justice Department had directed prosecutors to dismiss the pending bribery case against him. Adams is set to meet with Trump’s border czar, Tom Homan, on Thursday, where he is expected to raise the funding issue.
