The Trump Environmental Protection Agency‘s efforts to cancel money granted to nonprofit organizations to fund clean energy projects in low-income communities are unlawful and could cause irreparable harm to the awardees, the nonprofit groups argued in federal court on Wednesday.
A federal court in Washington, D.C., heard arguments from three nonprofit groups that were granted $20 billion from the Greenhouse Gas Reduction Fund: the Climate United Fund, Coalition for Green Capital, and Power Forward Communities.
The EPA “has a right to manage its own grants, of course, but they must do so within the means and balance of the law,” the plaintiffs’ attorney said.
The plaintiffs argued that the EPA’s efforts to terminate the funding violate a number of statutes, including the Inflation Reduction Act, the 2022 law passed by Democrats and signed by President Joe Biden that provided hundreds of billions of dollars in clean energy subsidies, including for the Greenhouse Gas Reduction Fund.
EPA Administrator Lee Zeldin has claimed the previous administration had improperly distributed the Greenhouse Gas Reduction Fund by routing the money through Citibank to avoid oversight.
Zeldin has called the funds “gold bars,” referencing an undercover video filmed last year in which a former EPA employee said the Biden administration was trying to distribute the promised funds before the new administration.
“It truly feels like we’re on the Titanic, and we’re throwing like gold bars off the edge,” the former employee says in the video.
District Judge Tanya Chutkan in Washington, D.C., last month temporarily blocked the EPA from terminating the funds, saying that the agency did not provide sufficient evidence to back claims that the grants were mismanaged and fraudulent.
In the hearing on Wednesday, the government did not provide any new evidence to back its claims of fraud and mismanagement.
The Department of Justice lawyer representing the EPA, Marcus Sacks, argued that the original grant agreement stated that the agency could terminate the grants for agency priority. Chutkan questioned whether Sacks was abandoning the claims that there was waste, fraud, and abuse, as cited in the EPA’s termination letter.
The termination letter addresses “the idea of lack of account controls, a need for better regulation and control over the money at issue here and agency priorities – all of that is a part of the basis for termination,” Sacks said.
In addition, the plaintiffs’ lawyers warned that the organizations could go out of business if the funding remains delayed. The plaintiffs added that, without the granted money, the groups will not be able to fund projects, which include those consistent with the Inflation Reduction Act.
The program was given a total of $27 billion to help fund climate projects in low-income communities. The three nonprofit groups suing the EPA and Citibank to release the funds were granted $14 billion under the program’s National Clean Investment Fund.
The other $6 billion went to five other organizations under the Clean Communities Investment Accelerator.
The third fund in the program is the Solar for All program, which remains untouched by the EPA.
