‘Highway robbery’: NYC Comptroller accuses Trump and Musk of illegally siphoning FEMA funding

After weeks of Donald Trump swearing left, right, and sideways that Elon Musk and his team of 20-somethings at the Department of Government Efficiency wouldn’t have direct access to congressional or state funds, a New York City Comptroller is sounding alarms.

Brad Lander held an emergency news conference on Wednesday, Feb. 12 after discovering $80 million missing from the city’s bank account — money granted by Congress in 2023 to help the city house asylum seekers.

The Trump White House claims the funds were misappropriated and were being used for “luxury hotels” to house illegal immigrants. Secretary of State Kristi Noem claims she “clawed back” payment from “deep state activists.” As usual, Republicans are fully on-board with actions Democrats are calling aggressive overreach.

After weeks of Trump goading California Governor Gavin Newsom about withholding FEMA funds for disaster, Republicans are suddenly beyond concerned with helping out average Californians. The only problem? Republicans want the payment to come out of New York City’s cookie jar — and DOGE has taken everything but the crumbs.

Congress allocated that money Musk’s team snatched in September of 2023. Lander asserts the people affected are, “folks who, for the most part, registered with the federal government when they crossed, in many cases got sent here by the federal government. New York City stepped up to provide shelter and services and pay for that,” Lander said.

White House Press Secretary Karoline Leavit said the money was seized because “there are still people in North Carolina and California who have not received FEMA funding” and that “housing illegal immigrants” before helping Americans “is not something that this administration is going to tolerate.”

But this statement flies in the face of FEMA’s funding guidelines and contradicts Leavit’s assertions. The organization has separate funding for the Disaster Relief Fund — FEMA’s main funding for states and people affected by disaster — and for the Shelter and Services Program. The money is allocated separately, and if FEMA is functioning as it should, the streams never cross.

Under New York law, the city must offer shelter to anyone in need, and so far it’s housed 45,000 asylum seekers sent from Texas alone. The sudden influx sent the city scrambling, and NYC City Hall claims that Texas Governor Greg Abbott “used human beings as political pawns and sent thousands of migrants to New York City without any kind of communication or coordination.”

Since 2020, one of the city’s 119 shelters has been The Roosevelt Hotel, a historic business that shuttered its doors for good during the Covid-19 pandemic. The former 5-star hotel seems to be one of the most contentious parts of this whole conversation, based on the firestorm kicking off on X. After closing, the hotel was purchased by Pakistan International Airlines before being leased to the city in 2023. The partnership aims to net $220 million for the Pakistani government by 2026. The Hotel Association of New York City (HANYC), which the Roosevelt is a part of, leases nearly 10,000 rooms to the city for migrant housing, with hotels sheltering families for a maximum of 60 days. According to the comptroller’s office, the city spends roughly $52 a day on a single family. Since the 60-day limit was imposed, 70% of migrants find their own housing before their stay is up.

Rhode Island Judge John McConnell has already ruled in favor of DOGE’s recouping of the funds, saying that, “Because the Defendants are seeking to terminate funding ‘on the basis of the applicable authorizing statutes, regulations, and terms,'” he “sees no need for further clarification.” McConnell then denied a motion for an emergency hearing and affirmed a temporary restraining order that has prevented federal funding freezes across the board.

Musk’s seizing of funds may be uncontested by the courts, but it’s opened a wider conversation around just how much power the billionaire has. After all, if the federal contractor can take $80 million right out of a state’s accounts with no pushback, who might be the next target of such egregious overreach?