Billionaire businessman Elon Musk said early Monday that President Trump’s administration is seeking to force New York City to return $59 million in federal funding that he claimed the city’s using to pay for migrants to stay in “luxury hotels.”
Musk, whose unconventional role on Trump’s team has given him significant influence over federal government operations, wrote in a post on X that the money was distributed to Mayor Adams’ administration last week. The Department of Government Efficiency, the quasi-government agency Trump tapped Musk to lead, discovered the disbursement, according to Musk, who didn’t identify any luxury hotels in the city where the money’s supposedly being spent.
“Sending this money violated the law and is in gross insubordination to the President’s executive order,” Musk wrote. “That money is meant for American disaster relief and instead is being spent on high end hotels for illegals! A clawback demand will be made today to recoup those funds.”
Spokespeople for the White House didn’t immediately return requests for details on how such a funding reversal would work.
Some migrants, especially families with children, are being housed in hotels in New York — but they aren’t in the “luxury” category, noted Liz Garcia, an Adams spokeswoman. Garcia didn’t immediately provide further comment other than to say Adams’ administration hadn’t as of early Monday afternoon received any official claw-back request from the feds.
Musk’s missive comes as Adams has publicly avoided criticizing Trump and his team. After Trump’s inauguration last month, Adams said the new president has “respect” for his administration and lauded Musk’s focus on bringing “efficiency” to the federal bureaucracy.
“I’m an Elon Musk guy,” Adams said in a Jan. 22 appearance on Stephen A. Smith’s YouTube show.
The funding highlighted by Musk comes from the Federal Emergency Management Agency’s Shelter and Services Program, which reimburses municipalities across the U.S. for costs incurred to house and care for newly-arrived migrants, a source directly familiar with the matter told the Daily News.
The source said the cash sent to New York City last week was allocated under President Biden’s administration. It’s unclear how Trump and Musk would be able to demand back money that has already been legally disbursed.
The $59 million comes on top of the roughly $160 million Biden provided Adams’ administration in 2023 and 2024. In total, Biden’s administration allocated about $237 million in funding for the city’s migrant crisis, portions of which remain outstanding, Garcia said.
To date, Adams’ administration has, since spring 2022, spent nearly $7 billion on housing and providing services for tens of thousands of mostly Latin American migrants, many of whom are fleeing violence and poverty in their home countries in hopes of claiming asylum in the U.S.
Since the city’s migrant influx began, Adams has lamented what he sees as a lack of financial assistance from the federal government. Irking many fellow Democrats, Adams laid blame directly on Biden, including saying in 2023 that the then-president had “failed New York City on this issue.”
Adams has said he won’t criticize Trump publicly, though. Instead, he told reporters last month he’ll discuss any disagreements with Trump privately.
That stance, coming amid Trump’s crackdowns on undocumented immigrants and threats to withhold federal funding, has sparked criticism of Adams on several fronts.
Critics, including candidates challenging him in June’s mayoral primary, have said Adams’ deference to Trump makes it appear as if he’s hoping the Republican president can use his presidential authority to help quash the mayor’s federal corruption indictment.
Most recently, Adams’ legal team has tried to convince Trump’s Department of Justice leaders to drop his corruption case outright. Meantime, Trump has said he’s also considering pardoning Adams, claiming the mayor was treated unfairly by federal prosecutors.
