FEMA paralyzed by Noem and Lewandowski, blocking $15B in disaster funds

CNN published a major investigative report on May 31, 2026 documenting more than a year of paralysis at FEMA under DHS Secretary Kristi Noem and her informal chief of staff, Corey Lewandowski. The investigation found that the pair held back more than $15 billion in disaster funds and drove out roughly 20% of the agency's workforce during the 13 months Noem ran the Department of Homeland Security.

The dysfunction was not accidental. Noem and Lewandowski made deliberate decisions to centralize control over an agency designed to move fast in emergencies. Career officials who warned them from the start saw the results coming.

In June 2025, Noem issued a directive requiring her personal sign-off on any FEMA expenditure over $100,000. For an agency that routinely issues multi-million dollar reimbursements to states for debris removal and emergency services, senior FEMA officials predicted immediately that the rule would sow chaos. A September 2025 Senate Democratic report documented that the approval requirement had delayed at least 1,000 FEMA contracts, grants, and disaster reimbursements.

The rule also gave Noem a mechanism to steer money politically. Sources told CNN that Noem and Lewandowski flat-out blocked some blue states while fast-tracking funds to allies' states after private meetings.

Corey Lewandowski held the formal title of special government employee — a status meant to limit service to a small number of days per year — but operated as Noem's de facto second-in-command at DHS. He had no emergency management background. Congressional investigators found that Lewandowski routinely overrode career officials, directed personnel actions, and in at least one instance signed off personally on billions in grant funding.

House Democrats on the Oversight Committee escalated a probe into what they called Lewandowski's 'suspected pay-to-play operation' with DHS contracts. Palantir, the data analytics firm, told investigators it had complained about its interactions with Lewandowski as it sought DHS work.

Noem and Lewandowski installed an outside contractor named Kara Voorhies as a senior adviser at FEMA in spring 2025. Voorhies had a background in financial consulting — not emergency management — and she 'emerged out of nowhere,' according to officials. Before any FEMA spending request could reach Noem, it had to first clear Voorhies, who officials described as the agency's true gatekeeper. 'We could not do anything without Kara approving it,' one official told CNN.

Voorhies targeted specific categories of grants for cancellation: funds allocated to Muslim groups, diversity and equity initiatives, climate change programs, and the state of California. Federal regulations generally prohibit contractors from making binding decisions on core agency functions like awarding grants and approving budgets. After Noem's removal, DHS investigators seized Voorhies' government-issued equipment and documents.

North Carolina bore some of the most direct pain. Hurricane Helene struck western North Carolina in late September 2024, and the state was still waiting for billions in recovery reimbursements when Noem's approval bottleneck took hold in June 2025. Gov. Josh Stein said federal support covered barely 9% of the state's estimated $59.6 billion in damages, far below the 70%+ the federal government covered for Katrina, Sandy, and Maria. The Washington Post obtained documents showing DHS was delaying millions in pre-approved North Carolina recovery funds despite the disaster declaration.

The political backlash cut across party lines. Republican senators Thom Tillis and Ted Budd of North Carolina placed holds on three DHS nominees — the general counsel, the CISA director, and the undersecretary for science and technology — to force movement on blocked Helene aid. At a March 3, 2026 Senate hearing, Tillis confronted Noem directly, telling her: "You're violating the law" and citing the Homeland Security Act of 2002, which expressly prohibits the DHS Secretary from restricting or diverting FEMA resources from its mission.

Senators Murray and Peters also formally demanded Noem revoke the personal sign-off policy, calling it an unprecedented intrusion into congressionally mandated disaster relief.

Trump fired Noem on March 5, 2026 — two days after Tillis's Senate rebuke — and announced Sen. Markwayne Mullin of Oklahoma as her replacement. On April 1, 2026, Mullin's first major action as DHS Secretary was to rescind Noem's $100,000 approval requirement. The International Association of Emergency Managers praised the move immediately. But the majority of the $15 billion backlog had not yet been released at the time Mullin acted.

The DHS Office of Inspector GeneralInspector GeneralAn independent official embedded in a federal agency who investigates waste, fraud, and abuse, and reports findings to both the agency and Congress.Key ConceptInspector GeneralAn independent official embedded in a federal agency who investigates waste, fraud, and abuse, and reports findings to both the agency and Congress.Open conceptBookmark launched what sources describe as a 'sweeping' investigation into contracting practices under Noem and Lewandowski. The IG is examining whether Lewandowski improperly sought payment from contractors seeking DHS work — including from Palantir — and whether any of the contracting decisions crossed into criminal conduct. Investigators from the IG's office seized Voorhies' government-issued equipment shortly after Noem's departure.

ProPublica documented a concrete example of the political favoritism the CNN investigation described. After Noem implemented the $100,000 approval bottleneck that left thousands of communities waiting, the city of Naples, Florida found a faster path: its mayor reached out to Sinan Gursoy, a cardiologist who had donated at least $25,000 to Noem's 2022 gubernatorial campaign. Within 24 hours of Gursoy's intervention, Naples received word that FEMA intended to expedite more than $11 million to rebuild the city's storm-damaged pier. Noem flew to Naples on a government plane and had dinner with Gursoy at a French restaurant.

At least 19 states with Democratic attorneys general presented federal court evidence that they were being systematically denied congressionally approved FEMA funds. A judge found FEMA had withheld grants in violation of a court order. California received only $830,000 from FEMA between July and late 2025; Colorado received nothing. Meanwhile, FEMA's workforce shrank from roughly 29,000 to about 23,000 as staff departed through buyouts, firings, and attrition.

With hurricane season starting June 1, 2026, acting FEMA chief Bob Fenton told reporters: 'We are playing catch-up.' Cameron Hamilton — fired in May 2025 after testifying that FEMA shouldn't be eliminated — was renominated by Trump on May 11, 2026, to lead the agency for a second time. His confirmation would make him FEMA's first permanent administrator of Trump's second term.