DENVER — Denver has joined a lawsuit against the Trump administration after it rescinded $24 million in federal grants because the city continued to shelter new immigrants in 2024.
The city intended to use those millions to help off-set the costs incurred when nearly 43,000 of the newcomers arrived in the city between late 2022 and the fall of 2024.
In addition to Denver, the City of Chicago and Pima County, Arizona, have also joined the lawsuit. All three claim that the federal government's actions are unconstitutional and are attempts to override Congress’ constitutional authority to appropriate the funding, and that the Trump administration has violated the Administrative Procedure Act by not providing a reason for the rescission.
Denver7 obtained the lawsuit on Friday morning. You can read the document below.
The Trump administration initially threatened to remove this funding in March, as Denver7 reported. The Federal Emergency Management Agency (FEMA) had threatened to withhold $32 million in grant money over accusations that city officials misused it when sheltering the new immigrants. The letter FEMA sent to the City and County of Denver — dated March 11, 2025 — asked Denver to provide names and contact information for the new immigrants served by the city, along with a "detailed and descriptive list of specific services provided" and proof of such within 30 days. Funding would be held during the review, the letter reads.
Denver was promised the $32 million through FEMA's Shelter and Services Program for housing those new arrivals. Of that, about $8 million has already been received.
You can read the March 11, 2025 letter from Cameron Hamilton, acting administrator of FEMA, to the City and County of Denver in its entirety below.
After the city received this letter, Denver7 sat down with Denver Attorney Lisi Owen and contacted a city spokesperson to get some answers.
"I would be very interested to know what facts the federal government is relying on in order to even accuse Denver of this misconduct in the first place," Owen told us.
A city spokesperson told us that the city was reviewing the letter and assured that "Denver has committed no violation and will continue to comply with local, state, and federal laws.”
The Trump administration followed through on its threat to rescind the funds, as outlined in a letter sent to the city dated April 1, 2025.
"The Department, consistent with President Trump's direction, is focused on advancing the essential mission of enforcing immigration laws and securing the border. Consequently, grant programs that support, or have the potential to support, illegal immigration through funding illegal activities or support for illegal aliens that is not consistent with DHS's enforcement focus do not effectuate the agency's current priorities."
Read the full letter from FEMA Acting Administrator Hamilton to the City of Denver about terminating the city's grant awards in the PDF below.
The Department of Homeland Security and FEMA terminated three Denver-bound grants in the Shelter and Services Program, which totaled roughly $32 million. During a Denver City Council meeting on April 28, Budget Director Justin Sykes said about $8 million was already in-hand, so the remaining amount of roughly $24 million would not be reimbursed to the city.
In a press release Friday morning, Denver called the termination of funds "improper" and Denver Mayor Mike Johnston accused the Trump administration of trying to divide the country instead of seeking bipartisan solutions on immigration.
“The Shelter and Services Program was intended for the sole purpose of reimbursing cities who did exactly that while following all federal, state, and local laws," his statement reads. "Now, the Trump administration is illegally trying to punish cities who did the work the federal government couldn’t. I am incredibly proud of how our city responded to this crisis and will continue to fight for the funding we were awarded but have not received.”
Denver7 reached out to Rep. Lauren Boebert to hear her thoughts on this move. In a statement, she told us:
"Instead of obeying the law and ending their sanctuary city policies, Mayor Johnston would rather grandstand and flush taxpayer dollars down the drain with another lawsuit. It's no wonder residents and small businesses continue to leave Denver in droves; the city's leaders do not respect the rule of law."
We also contacted the Colorado Union of Taxpayers about the lawsuit, and they sent us a statement that reads:
“Mayor Mike Johnston, his administration, and prior city administration’s agendas, regarding welcoming people to Denver who have come to America illegally, is significantly hurting Denverites. Mayor Johnston has looked and is looking to the federal government (money collected from citizens across the country and federal debt) to bail him out and fund his ideological agenda. It is time for Mayor Johnston to grow up and learn that there are consequences to his poor decisions. Instead of using Denverites hard-earned money to sue the federal government, Johnston should cut spending, lower taxes and fees, reverse course on his sanctuary city policies for illegal immigrants, and begin to find real solutions for the issues facing the people of Denver.”
In fiscal year 2024, the U.S. Department of Homeland Security said it would award $641 million to off-set costs incurred for services connected to the large groups of new immigrants arriving in communities across the United States.
Many of the 43,000 new immigrants who arrived to Denver over the past few years came into the country through Texas, and Texas Gov. Greg Abbott began bussing them to other cities, including Denver. In Friday's press release, the city said many arrived with "nothing but the clothes on their backs and no opportunity to work."
"Denver responded to this crisis — that we neither created nor asked for — to prevent thousands of families from living on our streets in the cold, maintain public safety, and ensure the city continued to run smoothly," the city's press release continues.
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