Department of Homeland Security authorities announced the dismissal of four government employees on Tuesday for making payments to reimburse New York City for migrant accommodation costs. The workers are accused of bypassing leadership to carry out transactions, which have been a standard practice for years under a program that helps cover costs for managing increased migration. However, officials did not explain how the four workers violated any policies. 

On Monday, Elon Musk wrote on X that his team had found payments made with funds meant for disaster relief that were used to put migrants in opulent hotels. The payments were deemed blatant insubordination by Musk, who also targeted the Homeland Security agency, the Federal Emergency Management Agency. FEMA's acting administrator, Cameron Hamilton, later stated that the payments had been stopped and that the employees responsible for approving them would face consequences. “The terminated employees were FEMA's chief financial officer, two program analysts and a grant specialist,” a Homeland Security statement said. The statement said that employees made excessive payments to luxury hotels in New York City to accommodate migrants. DHS emphasised that it would not stand by and would allow hidden political groups to jeopardise the safety and wishes of the American people.

The statement did not provide further details, and officials did not respond to emails requesting comments. However, in court documents filed on Tuesday, Hamilton stated that the administration withdrew funding from the Shelter and Services Program due to concerns that the money was being used for illegal activities at a Manhattan hotel housing migrants. Hamilton made these comments during a lawsuit aimed at stopping the Trump administration's decision to freeze federal grants and loans. This freeze, implemented just days after the new administration took office, caused widespread confusion among states, communities and organisations that depend on federal funding. However, it was lifted two days later. Currently, the Department has put a hold on the funding for the Shelter and Services Program due to serious concerns that the money may be going to organisations involved in or supporting illegal activities, Hamilton stated. 

Hamilton referenced a story in the New York Post about the Venezuelan gang Tren De Aragua using the Roosevelt Hotel, which houses migrants in New York, as a recruiting ground and a base of operations to strategise various crimes. Hamilton claimed that if FEMA payments keep up, they will probably be used to finance illegal behaviour. In 2023, New York City began using the Roosevelt Hotel as a centre to help homeless migrants. The hotel had closed in late 2020 due to the COVID-19 pandemic but was reopened to assist with the increasing number of arrivals. By law, the city must provide shelter to anyone in need, and the regular shelters were full. Now, the Roosevelt Hotel serves as both a processing centre where migrants apply for services and a temporary shelter for hundreds of families, who can stay for up to 60 days.

According to Hamilton, FEMA is contacting New York to obtain additional information and "ensure that federal funds are not being used for illegal activities." If recipients fail to comply with the terms, the federal government has the authority to halt or terminate payments. The Shelter and Services Program, which is funded by Congress and run by FEMA, has come under fire from Republicans who falsely accuse it of stealing money from victims of floods or storms. 

The money is different from FEMA's disaster relief fund, which is its primary source of funding to assist people and governments affected by disasters. Meanwhile, Trump's Republican administration is increasing pressure on FEMA, proposing that it should be dissolved and that disaster funds should be given directly to states instead.