DHS unlawfully favored certain states in counterterrorism grant awards

(CN) — A Rhode Island federal judge on Monday prohibited the Department of Homeland Security from making state counterterrorism grant funding contingent on cooperation with ICE operations.

“Defendants’ wanton abuse of their role in federal grant administration is particularly troublesome given the fact that they have been entrusted with a most solemn duty: safeguarding our nation and its citizens,” U.S. District Judge Mary S. McElroy, a Donald Trump appointee, wrote in her 48-page opinion.

In March, the Department of Homeland Security revised the requirements governing all federal grants to comply with an executive order signed by President Donald Trump that DHS anti-terrorism grants and federal disaster aid are conditioned on compliance with the administration’s aggressive immigration agenda.

A coalition of more than a dozen states sued DHS and the Federal Emergency Management Agency in May over those new requirements, which U.S. District Judge William Smith, a George W. Bush appointee, permanently barred the agencies from enforcing in September.

The department, however, did not stop applying the conditions to all federal grants it oversees, prompting another lawsuit in late September challenging the reallocation of millions in counterterrorism grant funds from blue states to red states.

On Monday, McElroy ordered the department to allocate funds based on the 2025 notice of funding opportunity, which was issued before the reallocation decision.

McElroy wrote that the reallocation decisions were particularly troubling in the wake of the Brown University shooting on Dec. 13, which is within the court’s jurisdiction.

“Some of these programs were likely involved in the response to the tragic mass shooting at Brown University that recently occured,” McElroy said. “To hold hostage funding for programs like these based solely on what appear to be defendants’ political whims is unconscionable and, at least here, unlawful,”

The states’ primary challenge is to the reallocation of Homeland Security Grant Program funds from blue states to red states following a FEMA memo that modified how awards are calculated so that “sanctuary jurisdictions receive only the minimum funding required by the statute.”

The memo recommended the remaining funds be reallocated to “jurisdictions that comply with federal immigration and law enforcement cooperation policies,” according to the opinion.

The Department of Homeland Security later issued a notice of funding opportunity — which is a public announcement establishing allocations for federal grant funding — that dramatically cut allocations to blue states and redistributed the remaining funds to red states.

The new directive failed to define “sanctuary jurisdiction” or explain how the calculations were changed to produce awards, which were substantially different from previous funding opportunity notices from earlier this year, according to McElroy.

The judge found that the reallocations were clearly intended to punish sanctuary jurisdictions, and were so vague and arbitrary that they violate the Administrative Procedure Act.

The Homeland Security Grant Program was established by Congress after 9/11 to strengthen national security through grant funding to state, local, tribal and territorial governments. Awards under this program are administered by FEMA and DHS, and are based on metrics like population density and vulnerability.

In total, the reallocation represented a $240 million loss in counterterrorism funding for places designated as sanctuary jurisdictions. It also arbitrarily increased the weight given to the metric for “transnational organized crime” and reduced the weight of population density.

McElroy wrote that all evidence points to what is ultimately jurisdictional favoritism, with line-item awards to unfavored applications reduced from millions of dollars to just one dollar.

The order also eliminates a new condition DHS imposed onto awards under the Emergency Management Performance Grant Program that requires states to provide certification of their population as of Sept. 30, certify that the reported population does not include individuals that have been deported by immigration officials and “explain the methodology used to determine its population.”

This department imposed this condition three days after it had already distributed awards and froze funds until the requirements are met.

Federal law dictates that any population-based allocation formula must use the most recent Census data, according to McElroy. Absent of any contemporaneous rationale for the last-minute change to the terms of the grant awards, the new condition also violates the Administrative Procedures Act, according to McElroy.

On the question of relief, McElroy reasoned that simply instructing the Department of Homeland Security to recalculate the grant awards would rely too heavily on the administration’s “good faith.” Instead, the order reverts the grant calculations to those laid out in an Aug. 1 funding opportunity notice that reflected substantial cuts to some plaintiff states compared to 2024 but did not adjust for the administration’s favored jurisdictions.

Although this remedy may not be ideal, McElroy said, it may just be the best course to ensure the plaintiff states can support life-saving counterterrorism programming, including programs for school safety, 2028 Summer Olympic events, bomb squads, border security operations, terrorism watch desks and communication systems.

For similar reasons, McElroy also permanently enjoined the Department of Homeland Security from any mention or application of the new and unexplained population verification requirements.

Representatives for the department could not immediately be reached for comment.

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