Elon Musk posted Monday on X that the so-called Department of Government Efficiency he heads had uncovered millions of dollars being spent illegally by FEMA to house migrants in New York City. He said the money was meant for American disaster relief and was wrongly spent for “high end” hotels.
The claim, which has spread widely on social media, led FEMA’s acting director to suspend payments sent to house migrants in New York City and the firing Tuesday of four federal employees.
But the post misrepresents the funding, FEMA’s role in dispersing it and how it is being used.
Here’s a look at the facts.
CLAIM: FEMA sent $59 million last week to luxury hotels in New York City to house illegal migrants. Sending this money violated the law and is in insubordination to the President’s executive order. That money is meant for American disaster relief and instead is being spent on high-end hotels.
THE FACTS: FEMA does not send money directly to New York hotels. It does administer money on behalf of U.S. Customs and Border Protection authorized by Congress in 2023 for the Shelter and Services Program. It was created to support local governments and non-government organizations that provide support to noncitizens released by immigration authorities, according to the FEMA website. The money is separate from disaster relief funds.
The office of Mayor Eric Adams said on Monday it received two payments from the federal government related to migrant assistance last week totaling over $80.5 million. One payment was for $58.6 million and the other was for $21.9 million, under two tranches of the Shelter and Services Program, city spokesperson Liz Garcia said. The money covered reimbursements for services delivered between November 2023 and October 2024 and included reimbursement for hotels, security, food and other costs. About $19 million in reimbursement claims were for hotel costs, she said.
Garcia said the city has never paid luxury rates for hotels. That’s backed up by a report last year from City Comptroller Brad Lander, who is now running for mayor in a bid to unseat Adams, which showed that the municipal government has paid on average $152 a night for rooms, the vast majority outside Manhattan. Some of the Manhattan rooms were around $200 per night, but that’s not a luxury rate. Rates for five-star hotels in Manhattan for this coming weekend run from $400 a night to well over $1,000.
The Shelter and Services Program, also known as SSP, is administered by FEMA in partnership with U.S. Customs and Border Protection, under the Consolidated Appropriations Act of 2023. Congress appropriated $650,000,000 for the program in fiscal year 2024 to provide financial support to nonfederal entities. Of that, $640.9 million was “to support sheltering and related activities provided by non-Federal entities, in support of relieving overcrowding in short-term holding facilities of U.S. Customs and Border Protection.” The remaining $9.1 million was for FEMA’s administrative costs.
According to the American Immigration Council, the Shelter and Services Program provided reimbursements to state and local governments and nonprofits in 35 different communities in fiscal years 2023 and 2024.
Numerous social media posts and some news reports claimed that the money should be used to help the victims of Hurricane Helene, which devastated parts of western North Carolina. But the funds for disaster assistance are administered separately.
Yael Schacher, director of the Americas and Europe at Refugees International, agreed that Musk is likely referring to the Shelter and Services Program and said there is “no substance” to his claim that money for disaster victims is being given to migrants, as each fund is appropriated separately by Congress.
“It is absolutely correct to say these funds would not have gone to disaster relief if they hadn’t gone to the SSP program,” she explained. “The funds just wouldn’t have been appropriated by Congress at all. The Shelter and Services Program is a separate line item in the federal budget and does not draw from FEMA’s Disaster Relief Fund.”
She continued: “Congress has specifically set aside funding for FEMA to administer the Shelter and Services Program, ensuring that it does not pull any resources from FEMA’s other work.”
Congress has authorized 140 times more funding for the Disaster Relief Fund than the Shelter and Services Program, according to the American Immigration Council. Schacher added that grants for the latter program have “strict cost requirements for how the money should be spent.”
Four federal employees — FEMA’s chief financial officer, two program analysts and a grant specialist — were fired Tuesday over the payments to reimburse New York City, Department of Homeland Security officials said. The workers are accused of circumventing leadership to make the transactions. Officials did not give details on how the four had violated any policies.
Cameron Hamilton, acting FEMA administrator, said the payments made by the employees were suspended.
In court documents filed Tuesday, Hamilton said the administration yanked funding from the Shelter and Services Program because of concerns the money was “facilitating illegal activities” at a Manhattan hotel used to house migrants. Hamilton’s comments came as part of a lawsuit seeking to block the Trump administration’s freeze on federal grants and loans. The freeze, just days into the new administration, threw states, communities and organizations that rely on federal funding into mass confusion, and was rescinded two days later.
U.S. District Judge John McConnell in Rhode Island ruled on Wednesday that the government’s bid to withhold FEMA money sent to New York to house migrants was not subject to an order, still in effect, that’s aimed at preventing a sweeping Trump administration pause on federal funding.
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