FEMA Diverted $4.071 Billion From Flood Prevention. A Court Called It Illegal.

On April 4, 2025, FEMA issued a press release titled "FEMA Ends Wasteful, Politicized Grant Program, Returning Agency to Core Mission of Helping Americans Recovering from Natural Disasters", announcing the end of Building Resilient Infrastructure and Communities (BRIC) — the agency's main competitive grant program for hardening levees, floodwalls, and power infrastructure before a disaster hits, not after.▸ The internal memo behind the decision offered no data to support the "wasteful" label, asserting only that the grants "have not increased the level of hazard mitigation as much as desired," according to the memo quoted in the states' federal complaint. Fourteen months, one lawsuit, and two court orders later, the program is technically alive again — but the money is not.

BRIC was not obscure or underused.▸ Congress created it in 2020 under the Disaster Recovery Reform Act and later added $1 billion through the Infrastructure Investment and Jobs Act. In every one of its four full funding cycles, applicants asked for far more than FEMA had to give: over $15.665 billion in requests against $4.795 billion made available across FY2020–FY2023 — 325% oversubscribed — according to the Congressional Research Service's April 2026 accounting. FEMA selected 1,940 of those applications for funding, worth roughly $4.6 billion, but had obligated only about $1 billion of it — 21.6% — by the time the CRS report was last updated.

FEMA's April 4 press release said it would return roughly $882 million in unspent BRIC appropriations to the Treasury.▸ That was the public number. The larger one surfaced later: per the states' complaint, FEMA revealed in June 2025 that it had separately "unlawfully diverted $4.071 billion out of the National Public Infrastructure Predisaster Mitigation Fund into the Major Declarations component of the Disaster Relief Fund" — the account used to fund grants after a disaster, not before one. Congress had explicitly barred FEMA from reprogramming grant funds between accounts in its own appropriations acts, the complaint notes, citing 6 U.S.C. § 316(d).

Twenty states — led by Washington and joined by Massachusetts, California, New York, and seventeen others — sued on July 16, 2025, in State of Washington, et al. v. Federal Emergency Management Agency, et al., No. 1:25-cv-12006 (D. Mass.).▸ A federal judge granted a preliminary injunction on August 5, 2025, then ruled on the merits on December 11, 2025 that the termination was unlawful and permanently enjoined FEMA from carrying it out, per the CRS account of the docket. FEMA said it would comply — but set no timetable. The states had to go back to court on February 17, 2026 to force the issue; a second order, on March 6, 2026, gave FEMA 21 days to issue a new funding notice. FEMA complied by combining fiscal years 2024 and 2025 into a single Notice of Funding Opportunity worth $1 billion, funded from carried-over Infrastructure Investment and Jobs Act appropriations and the Disaster Relief Fund set-aside — restoring less than a quarter of the disclosed diversion, and FEMA's own monthly reports show no additional money has been set aside for BRIC since March 2025, per the same CRS report.

The complaint documents dozens of specific projects frozen mid-approval.▸ One: Washington's rural Grays Harbor County had two flood-control projects — North Shore Levee and North Shore Levee West, in Aberdeen and Hoquiam — awarded a combined $97.5 million in BRIC funds after years of environmental review. State and local partners had already spent more than $31 million of their own money on design and permitting. Once built, the levees would have protected 1,354 businesses, 5,100 properties, and more than 3,000 jobs sitting inside the flood zone, and saved residents more than $5 million a year in reduced construction and insurance costs, according to the complaint. Hoquiam's portion cleared its final federal environmental review on March 25, 2025 — ten days before the termination press release.

That was one project in one county.▸ FEMA's own pre-termination pipeline touched every state: electrical-grid hardening in Iowa, Nebraska, and Kentucky; flood mitigation in Ohio, Montana, Idaho, West Virginia, and Indiana; a $100 million pump-station project in Pennsylvania; a water- supply pump station in North Dakota — all named as at-risk projects in the same complaint.

Figures on individual stalled projects (funding amounts, jobs, property counts) come from the plaintiff states' July 2025 federal complaint and describe conditions and estimates as of that filing; some may have since changed as litigation and funding notices proceeded through March 2026.