A federal judge is assessing whether the Environmental Protection Agency (EPA) violated the law by abruptly halting $20 billion in grants meant for nonprofits involved in a green bank initiative, allegedly neglecting procedural norms and citing unfounded claims of fraud and misuse.
During a detailed three-hour session, U.S. District Judge Tanya Chutkan pointed out that the EPA presented no significant new evidence of misconduct by the nonprofits. Discussions centered on procedural fairness and jurisdiction, questioning if Judge Chutkan is the appropriate authority for the case.
The legal action against the EPA involves Climate United Fund and allied organizations, who also included EPA Administrator Lee Zeldin and Citibank in their lawsuit. They claim the funds, designated for advancing clean energy and climate projects, were unlawfully withheld, hindering their operational capacity. They seek Judge Chutkan’s intervention to restore their access to the funds.
Judge Chutkan articulated the plaintiffs’ contention that EPA failed to comply with due procedures and instead coerced a funds freeze without adherence to legal stipulations. She noted that this approach seemed to bypass established protocols.
The green bank in question was part of initiatives funded by the 2022 Inflation Reduction Act. However, opposition to climate-oriented policies from the Trump administration, which favored fossil fuels, posed challenges. Administrator Zeldin criticized the grants as being part of a dubious scheme, suggesting potential corruption and conflicts of interest.
In video commentary, Zeldin criticized the allocation of substantial taxpayer dollars to external financial entities, suggesting that the process minimized government oversight and favored politically connected and inexperienced nonprofits.
The nonprofits argue that the termination of their grants was unwarranted and driven by ideological biases rather than legal breaches. They criticized the EPA’s lack of transparency and abrupt actions, including instructing Citibank to suspend funds without prior notification.
The judge questioned the legality of such actions, to which Justice Department attorney Marc Sacks defended the EPA’s decisions as lawful though conceding they may not have been ideal.
While the EPA declined to comment on the ongoing lawsuit, earlier judicial reviews temporarily halted the termination process pending further evidence. However, immediate reactivation of the fund was not ordered.
The Trump administration has maintained that discontinuing the grants was a legitimate response to oversight issues and government policy shifts. It argues the nonprofits’ legal claims are overstated and misapplied, framing the conflict as a conventional contract dispute.
The government suggests that if the case is deemed a contract dispute, it should be resolved in a separate jurisdiction, limiting potential outcomes to financial damages rather than compelled continuation of the grants. Officials insist no legal or constitutional obligations exist to mandate these specific groups receive funding.
Notably, within the Power Forward Communities coalition, member organizations such as United Way Worldwide and Habitat for Humanity International opted out of the legal challenge, choosing instead to divert focus to their core missions. United Way emphasized the need to prioritize its resources in alignment with its charitable objectives, while Habitat for Humanity similarly refrained from engaging in the lawsuit.
Despite these setbacks, the remaining nonprofits argue that the EPA’s abrupt actions disregarded legal norms, potentially pressuring legal officials and Citibank to suffer financial freeze challenges. Meanwhile, Power Forward Communities acknowledges the tough decisions made by its members in light of the situation.