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The City of New York has initiated legal action against the federal government, alleging the unlawful withdrawal of over $80 million in previously allocated FEMA funds. The lawsuit, filed in the U.S. District Court for the Southern District of New York, names multiple federal agencies and officials as defendants.
According to the city’s legal department, FEMA disbursed the funds on February 4 as reimbursement for expenses incurred in providing shelter to asylum seekers. However, on February 11, the federal government allegedly removed the funds from a city-controlled bank account without prior notice or explanation. It was not until February 19 that FEMA notified the city that the payments were being temporarily withheld.
New York City seeks both the return of the withdrawn funds and an injunction to prevent further unauthorized deductions or withholding of allocated federal monies.
Mayor Eric Adams emphasized the financial burden placed on the city, stating, “While our immigration system is undoubtedly in need of reform, the responsibility of managing an international humanitarian crisis should not fall disproportionately on one municipality. Our administration has managed an unprecedented situation with over 231,000 individuals seeking shelter in our city, largely without sufficient federal assistance. FEMA initially approved and disbursed the $80 million before retracting it—despite the city having spent more than $7 billion over the past three years. These funds represent the bare minimum our taxpayers deserve, and we will pursue every legal avenue to ensure our city receives what it is owed.”
City Comptroller Brad Lander echoed this sentiment, commending the legal department for pursuing the matter.
FEMA, in its letter to city officials, cited concerns regarding alleged gang activity and criminal behavior at a hotel housing asylum seekers. Federal officials have defended the fund withdrawal, asserting that no FEMA resources should be allocated in ways that compromise public safety. New York City officials, however, dispute these claims, maintaining that the concerns are unfounded.
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