By Adam Pagnucco.
Last week, New York City Comptroller Brad Lander released this statement.
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This morning, my financial team shockingly uncovered that President Trump and his crony Elon Musk illegally executed a revocation of $80 million in congressionally-appropriated FEMA funding from New York City’s bank accounts late yesterday afternoon. This is money that the federal government previously disbursed for shelter and services and is now missing. This highway robbery of our funds directly out of our bank account is a betrayal of everyone who calls New York City home.
New York City cannot take this lying down. I call on the Mayor to immediately pursue legal action to ensure the tens of millions of dollars stolen by Trump and DOGE are rightfully returned. If instead Mayor Adams continues to be President Trump’s pawn, my Office will request to work in partnership with the New York City Law Department to pursue aggressive legal action.
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This statement sent shockwaves throughout state and local government offices all over America. And it was certainly noticed in Montgomery County, Maryland.
The abrupt clawback was a product of two converging factors: President Donald Trump’s determination to crack down on illegal immigration and the access possessed by Trump ally Elon Musk to the U.S. Treasury Department’s payment system. In a post on X, Musk alleged:
The @DOGE team just discovered that FEMA sent $59M LAST WEEK to luxury hotels in New York City to house illegal migrants.
Sending this money violated the law and is in gross insubordination to the President’s executive order.
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.
President Musk uses the iron claw.
New York City officials contested Musk’s characterization of the payments, but it did not matter. Musk’s team decided to clawback the money and POOF! it was gone. The unprecedented move attracted a letter of opposition from Maryland Comptroller Brooke Lierman and a host of other state financial officials, but can anyone stop this from happening again? That question is underlined by the growing prospect of the Trump administration defying court orders.
So could Trump clawback MoCo? The answer is potentially yes. The county government is vulnerable on two issues in Trump’s crosshairs.
Immigration
Montgomery County has long fought its characterization by conservatives as a “sanctuary jurisdiction.” The issue came up again in December when a group headed by former Trump official Stephen Miller sent a threatening letter to the county concerning its alleged sanctuary status. Miller is now the Deputy Chief of Staff for Policy and Homeland Security Advisor in the second Trump term.
The Trump administration is now directly targeting state and local governments over immigration. New Attorney General Pam Bondi has filed lawsuits against the State of Illinois, the City of Chicago and state officials in New York. Bondi’s suit in New York is noteworthy because it targets a state law allowing illegal immigrants to get drivers licenses – a law that Maryland also has.
Also noteworthy is Bondi’s policy memo calling for an end to federal funding for “sanctuary jurisdictions.” Could that establish justification for more immigration-related clawbacks?
Montgomery County’s executive order on immigration policy contains a section vowing compliance with federal law. The County Attorney is no doubt prepared to defend it in court if challenged. But the county still has a target on its back because of its close relationship with CASA, a nonprofit that works on immigration issues. That relationship includes more than 20 years of noncompetitive contracts and a 99-year lease on a county office building backed up by millions of dollars in capital funding. Maryland Matters just reported that one of the county’s highest-ranking managers is married to CASA’s executive director. How would Miller, Musk, Bondi and other Trump minions react to all of this?
As for the State of Maryland, its law forbidding local jurisdictions from entering into contracts on immigrant detention facilities as well as its drivers license law puts it squarely in Bondi’s sights. Maryland Comptroller Brooke Lierman should be checking federal deposits every day. As for Maryland Attorney General Anthony Brown, he may well have work very soon for the federal attorneys he intends to hire.
Diversity, Equity, and Inclusion (DEI)
One of Trump’s first acts in his second term was to target federal diversity, equity and inclusion (DEI) programs for elimination. DEI employees were quickly put on leave. The Washington Post subsequently revealed documents showing a massive plan for purges and layoffs that go into areas far beyond DEI, including civil rights enforcement. Of more direct interest for state and local officials is a 2024 bill by then-Senator (and now Vice-President) J.D. Vance that would have ended funding for governments, schools and contractors with DEI programs. Will this be resurrected as another Trump executive order?
Montgomery County government is awash with DEI initiatives. The county has a $1.6 million, 8.5 FTE Racial Equity and Social Justice office that County Executive Marc Elrich has aggressively expanded. MCPS has a $15.6 million, 103 FTE Division of Equity and Organizational Development. (Superintendent Thomas Taylor wants to add $8 million and 18 more FTEs to this division.) Park and Planning and Montgomery College also have equity programs. All of this is vulnerable to a combined Vance-style executive order backed by Musk clawbacks.
How vulnerable is MoCo to the iron claw of Musk? In a prior post, I estimated that MoCo agencies were due to receive a combined $240 million in federal revenues in FY25 with $155 million going to MCPS. At least some of the MCPS money goes through the Maryland State Department of Education. This federal money accounts for 3.4 percent of the county’s FY25 operating budget.
In the past, hostile presidential administrations would have had to go through the budget process and perhaps Congressional legislation to affect these flows of federal money. But the Musk clawback changes everything. It’s now not impossible to believe that a state or local official could check a federal deposit and POOF! find millions of dollars missing.
It’s an unpredictable, devastating threat aimed at Rockville, Annapolis and other centers of state and local power all across the nation.