Attorney General Raoul joins lawsuit challenging Trump’s termination of
federal grants
[June 26, 2025]
By Peter Hancock
SPRINGFIELD – Attorney General Kwame Raoul announced this week he has
joined another multistate lawsuit challenging the Trump administration’s
decision to withhold billions of dollars in federal funds that had
previously been approved for states and other grantees.
The complaint, filed Tuesday in U.S. District Court in Massachusetts,
challenges several actions the administration has taken since Trump
returned to office Jan. 20 that involved terminating federal grants that
had previously been approved by various agencies.
Each of those actions, the lawsuit argues, were based on a misuse of a
single clause in one regulation under the federal Office of Management
and Budget. That clause allows agencies to terminate a grant if the
agency determines the award “no longer effectuates the program goals or
agency priorities.”
“The Trump Administration has claimed that five words in this Clause —
‘no longer effectuates . . . agency priorities’ — provide federal
agencies with virtually unfettered authority to withhold federal funding
any time they no longer wish to support the programs for which Congress
has appropriated funding,” the lawsuit alleges.
The suit is one of more than a dozen Raoul has joined as part of a
coalition of Democratic attorneys general who have been battling the
administration since Trump’s second inauguration in January.
Speaking Monday to a congressional panel made up of Democratic members
of the U.S. House and Senate judiciary committees, Raoul joined three
other members of that coalition to explain their litigation campaign.
“Whether or not I disagree with President Trump on his policy agenda, he
must act in a lawful way that is consistent with the Constitution and
the laws that Congress has enacted,” Raoul said. “Unfortunately, the
president and his administration have chosen, with many of their
actions, to ignore the Constitution and federal law. And when
constitutional guarantees are ignored, all Americans are at risk.”
Grants affected by cuts
The lawsuit challenges three specific funding cuts that have directly
affected the state of Illinois. Those include:
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Attorney General Kwame Raoul testifies at a Democratic congressional
forum Monday, June 23, about litigation that he and other Democratic
state attorneys general have filed challenging actions of the Trump
administration. (Screenshot from U.S. House Judiciary Committee
Democrats livestream)
The U.S. Department of Agriculture’s decision in March to halt
reimbursements under the Local Food Purchase Assistance Program,
which provided funding for nonprofit organizations to buy locally
grown food products from farmers for free distribution to vulnerable
communities.
A decision by the Federal Emergency Management Agency to terminate
two Shelter and Services Program Grant awards to the Illinois
Department of Human Services totaling $29 million. The money was
intended to reimburse Illinois for the cost of providing food,
shelter and medical care to migrants whom the U.S. Department of
Homeland Security had released to relieve overcrowding at federal
detention facilities.
And a decision in May by the U.S. Department of Labor to terminate
grants totaling $28.8 million to the Illinois Department of
Employment Security for modernization of the state’s unemployment
insurance system.
According to the lawsuit, OMB first adopted the regulation in 2020,
near the end of the first Trump administration. At the time,
according to the Federal Register, the agency said the clause was
intended to allow agencies to end a grant program under specific
conditions, but that it was not intended to let them terminate
grants “arbitrarily.”
The clause was later updated to include its current wording in 2024,
near the end of Joe Biden’s administration. However, according to
the complaint, “OMB never suggested, in either the 2020 or 2024
rulemaking, that a grant could be terminated even though the grant
was continuing to serve the very goals for which the monies had
initially been awarded, merely because the agency’s priorities
shifted midway during the use of the grant—let alone with no advance
notice.”
As of Wednesday, the case had not yet been scheduled for a hearing.
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