A post from Elon Musk last month trumpeted a supposedly startling discovery by his team of government cost-cutters: The Federal Emergency Management Agency had provided $59 million to house undocumented immigrants in New York City. The money, he declared, was “meant for American disaster relief and instead is being spent on high end hotels for illegals!”
But if Mr. Musk’s goal was to funnel more FEMA money to disaster aid, the fallout from his declaration had the opposite effect.
A pair of Trump administration orders, issued soon after the Feb. 10 social media post, aimed to block any agency money from helping undocumented immigrants and “sanctuary” jurisdictions protecting them left FEMA staff without sufficient guidance about how to proceed, effectively freezing payments on billions of dollars in disaster grants, according to two people briefed on the process and an internal document viewed by The New York Times.
While the freeze did not stop aid going directly to disaster survivors, it has disrupted payments to states, local governments and nonprofits, with ramifications being felt across the country.
In Florida, a nonprofit that helps hurricane survivors find housing and other services noticed its promised FEMA payments stopped coming, raising fears that it will have to trim operations. In southeastern Michigan, communities hit by devastating floods two years ago are waiting for federal money to cover the cost of rebuilding.
And in Helene-ravaged western North Carolina, tiny Warren Wilson College, a liberal arts school that specializes in environmental and climate science, has been hoping to hear in recent weeks about an application for aid to repair damaged roofs and clear debris from research fields, but has heard nothing.
“There’s a deep sadness when walking through all that debris, knowing all that was lost,” said Rosemary Thurber, a 22-year-old student at the college whose studies have been disrupted. She said that she and her fellow students were “losing faith in our federal government.”
The funding freeze illustrates the extraordinary power of Mr. Musk, the world’s wealthiest man, who has increasingly pointed his Department of Government Efficiency at exposing funding that benefits undocumented immigrants and whose demands regularly prompt responses from senior government officials.
In this case, Mr. Musk’s 5:03 a.m. post on X, the social media platform he owns, was followed hours later by a memo from Cameron Hamilton, the acting head of FEMA, saying the agency had stopped payments under a variety of grant programs, and given DOGE “full system access to our financial management system.” Nine days later, Homeland Security Secretary Kristi Noem, whose agency includes FEMA, signed the first of two agency orders that took aim at migrant funding and effectively spread the freeze across almost all of the agency’s grants.
After The New York Times submitted a list of detailed questions about the freeze on Monday, Ms. Noem on Tuesday signed a memo authorizing agency staff to exempt certain grants from the immigration-related orders, according to a person briefed on the change. It is not clear when or how quickly FEMA will go about releasing the money, and the Department of Homeland Security did not respond to The Times’s questions.
A representative for the White House and DOGE did not respond to questions this week.
The FEMA press office said in a separate statement last week that it attributed to an unnamed homeland security official: “FEMA is taking swift action to ensure the alignment of its grant programs with President Trump and Secretary Noem’s direction that U.S. taxpayer dollars are being used wisely and for mission-critical efforts.”
The freeze has played out against the backdrop of widespread upheaval at the disaster relief agency, highlighted by Ms. Noem’s assertion during a Monday cabinet meeting that “We’re going to eliminate FEMA.”
Ms. Noem’s office has directed staff to develop a plan to disband the agency, according to a person familiar with internal deliberations who was not authorized to discuss the matter in public.
It is not clear what government agencies, if any, would take over FEMA’s role delivering aid to communities hit by disasters. Mr. Trump has mused about returning those duties to the states, or perhaps having the Defense Department carry more responsibility for responding to disasters.
In the short term, however, many communities that see FEMA grants as a lifeline are still waiting.
“There are projects beyond our ability to address on our own,” Damián J. Fernández, the president of Warren Wilson College, said earlier this month on a campus still covered in debris from the September storm, his voice breaking. “We have followed the rules. But the system is not working.”
One storm leads to another
FEMA’s existential crisis arguably began last fall, when Hurricane Helene killed more than 100 people in North Carolina and damaged more than 73,000 homes. The destruction was shocking, especially in a region not accustomed to hurricanes, and quickly became part of the presidential campaign.
Within a week of the hurricane reaching North Carolina, FEMA had provided more than $45 million in disaster relief and sent more than 1,500 personnel, according to the agency. But as survivors struggled to regain access to basic services, many concluded that FEMA was failing to do enough.
That message was amplified by Mr. Trump and Mr. Musk, who began criticizing FEMA for spending its money to house illegal immigrants rather than help hurricane survivors.
“Kamala spent all her FEMA money, billions of dollars, on housing for illegal migrants,” Mr. Trump claimed at a rally soon after the storm, referring to Kamala Harris, then the vice president and his rival in the presidential race.
Mr. Trump appeared to be referring to the Shelter and Services Program. Congress approved it under the Biden administration, directing FEMA to run a program for housing migrants who entered the United States and were released by federal officials.
Congress gave the program $650 million last year for cities, states and nonprofits, but Mr. Trump’s comments were inaccurate. FEMA’s spending on migrants does not mean FEMA has less money to spend on disaster survivors. The money for migrants comes from the budget of Customs and Border Protection, not out of FEMA’s budget. Money for disaster survivors comes directly from Congress. There is no overlap between those two funds.
Soon after his return to the White House, Mr. Trump made Mr. Hamilton acting FEMA director. A former Navy SEAL and congressional candidate who campaigned on an anti-illegal immigration message, Mr. Hamilton did not have experience running a state or local emergency management agency.
DOGE members arrived at the agency’s downtown Washington headquarters in early February to begin going through contract and grant payments.
Then came Mr. Musk’s post.
“The @DOGE team just discovered that FEMA sent $59M LAST WEEK to luxury hotels in New York City to house illegal migrants,” Mr. Musk wrote, exaggerating the quality of hotel rooms that were used. He added that FEMA had in his view violated an executive order from Mr. Trump, which ordered the agency to pause money supporting undocumented migrants. “A clawback demand will be made today to recoup those funds,” he wrote.
The Trump administration response was swift.
Ms. Noem accused “deep state activists” of going rogue and circumventing her leadership to “unilaterally” transfer money to the city in the first place. FEMA took the extraordinary step of abruptly clawing back $80 million in federal shelter funds from a New York City-owned bank account, including the $59 million Mr. Musk posted about, leading the city to sue the Trump administration. And Mr. Hamilton publicly pledged to punish anyone involved in the transfer of the money, leading FEMA to fire four people, including the agency’s chief financial officer, Mary Comans.
Privately, however, Mr. Hamilton offered a different account.
In his Feb. 10 memo, distributed after Mr. Musk’s post, he explained that a top homeland security official on Jan. 30 had given FEMA permission to keep making payments to state and local governments, which included funds for the migrant shelter program, according to a copy of the memo reviewed by The Times.
In that memo, which laid out the steps FEMA had taken to halt funding after the Musk post, Mr. Hamilton also wrote that the FEMA officials who had signed off on payments for the migrant program “believed they were acting in good faith and in line with intent and direction received” from D.H.S., President Trump and Mr. Musk’s DOGE team.
Mr. Hamilton did not respond to a request for comment.
Ms. Comans is now suing FEMA, claiming the agency made her the scapegoat for a policy that the agency reversed after Mr. Musk complained about it. “My client was actually following the directions of D.H.S./FEMA leadership,” said Mark S. Zaid, Ms. Comans’s lawyer.
But instead of backing off, Ms. Noem cracked down further. On Feb. 19, she issued a memo directing FEMA and other agencies within DHS to cut off funding for what she called “sanctuary jurisdictions” — cities or states that fail to help federal authorities track down, arrest or hold migrants. On Feb. 28, FEMA imposed a “manual review” on all grants, according to copies of the memos reviewed by The Times.
The result: a freeze on payments that FEMA owed beneficiaries on grants valued at more than $100 billion, many of which are designed to stretch across multiple years.
Real-world consequences
For some, the impact of the freeze has been profound.
French Broad Electric Membership Corporation, a small utility outside Asheville, N.C., spent about $18 million through the end of last year to pay workers and contractors for repairs to power lines, poles and wiring after Helene knocked out power to all of its 43,000 customers.
The co-op got approved for an expedited grant under FEMA’s public assistance program in early February, according to Jeff Loven, the co-op’s general manager and CEO. It was supposed to get $9 million by the middle of last month, he added, but was still waiting for the money as of Wednesday afternoon.
“We’ve had to borrow money on short-term lines of credit to be able to pay these folks, as well as the vendors who supplied these materials,” Mr. Loven said. If the freeze continues, he added, “we have to go borrow more money and get further in debt.” The interest on that line of credit is about $250,000 a month, Mr. Loven said, and that cost could end up falling on their customers unless the co-op gets the FEMA money soon.
In Florida, when Hurricane Ian struck Fort Myers in September 2022, it destroyed the rental house that Hayley Riotto was living in. Ms. Riotto, who was then a 22-year-old single mother, wound up living out of her car with her two children, who were three and four. At one point, she found a campground and told her children they were on an extended camping adventure.
Ms. Riotto eventually found her way to Compass 82, a nonprofit that connects survivors with charities and government services. The group helped her secure a deposit for a new rental home, as well as beds, dressers and a table to put in it, and clothing for her and her children. Once Ms. Riotto had a home again, she was able to get a job. “My kids are just flourishing,” she said.
Compass 82 has about 50 case managers who are working with more than 750 hurricane survivors around Florida, according to Susan Marticek, the group’s executive director. But that work is funded by FEMA.
On Wednesday, the group got a small payment, possibly a sign of the freeze being lifted. But Ms. Marticek said she is still waiting on about $1.3 million in reimbursements, for work done in November, December and January. Without that money, she said she expects she’ll need to start laying off staff in two or three months — just as hurricane season starts.
Pacific Gateway Center, a nonprofit in Hawaii that helps survivors of the 2023 Lahaina wildfire get back on their feet, last got money from FEMA in December, according to its executive director, Matthew Johnson. He had expected additional reimbursements to come early this year, but as of Wednesday that money had not yet arrived. He estimated that his group can hold out for maybe one or two months before it starts cutting case workers.
FEMA’s grants also pay part of the budgets for state and local emergency management agencies, the same offices that Mr. Trump has said he wants to shoulder more of the burden for responding to future disasters.
Michigan’s state emergency management agency was waiting on $112 million in funds, according to Lauren Thompson, a spokeswoman for the agency. Maryland’s emergency management department was waiting for $81 million in frozen FEMA grants as of Wednesday, according to Jorge Castillo, a spokesman.
At Warren Wilson College, staff got a call from FEMA in mid-March, two months after filing their application. Those “expedited” applications are usually processed within 30 days, according to Christian Montz, vice president of emergency management at High Street Consulting, a group that helped the college work with FEMA.
But FEMA wasn’t calling to say the grant had been approved. Rather, an agency representative said FEMA had missed its internal deadline for processing the application. The college would need to file it again.
Officials within FEMA who consider grant applications have been reluctant to issue approvals since Mr. Musk’s Feb. 10 post about migrants and Ms. Comans’s firing, for fear of being punished by the agency’s leadership, according to three people inside FEMA who spoke on the condition of anonymity to discuss internal dynamics.
While the college waits, its research fields are still unusable, causing much of Rosemary Thurber’s studies to be disrupted. Outdoor classrooms near the river trail remain covered with debris that seemed to come from someone’s kitchen, mixed with washed-up toys and shoes.
“I really look forward to times when we can be growing food out there again,” she said.
