A federal judge on Tuesday blocked the Environmental Protection Agency under the Trump administration from terminating $14 billion in grants awarded to three climate-focused groups, rejecting the agency's claims of fraud and mismanagement. The decision preserves access to funds critical to advancing clean energy projects while legal proceedings continue.
U.S. District Judge Tonya Chutkan ruled that the EPA's allegations lacked sufficient evidence. "At this juncture, EPA Defendants have not sufficiently explained why unilaterally terminating Plaintiffs' grant awards was a rational precursor to reviewing" the program, Chutkan wrote. She also ordered Citibank, which holds the grant funds on behalf of the EPA, not to transfer the money to the government or any other entity.
The grants, totaling $20 billion, were authorized under the 2022 Inflation Reduction Act to support clean energy initiatives. Of that amount, $14 billion had been awarded last year to three nonprofit groups: Climate United, the Coalition for Green Capital, and Power Forward Communities. The EPA Administrator, Lee Zeldin, had frozen the grants earlier this year, alleging fraud, self-dealing, and mismanagement by the recipients.
Climate United, which was awarded nearly $7 billion, sued alongside the Coalition for Green Capital, which received $5 billion, and Power Forward Communities, linked to Democrat Stacey Abrams, awarded $2 billion. The plaintiffs argued that the termination was unlawful and based on unfounded accusations.
Beth Bafford, CEO of Climate United, welcomed the judge's ruling. The judge's decision was "a step in the right direction," Bafford said. "In the coming weeks, we will continue working towards a long-term solution that will allow us to invest in projects that deliver energy savings, create jobs, and boost American manufacturing in communities across the country."
Zeldin reiterated his position on X, stating that the grants were distributed "in a manner that deliberately reduced the ability of EPA to conduct proper oversight." He added, "I will not rest until these hard-earned taxpayer dollars are returned to the U.S. Treasury."
Zeldin has repeatedly described the grant program as a "gold bar" scheme, asserting that "$20 billion of your tax dollars were parked at an outside financial institution, in a deliberate effort to limit government oversight - doling out your money through just eight pass-through, politically connected, unqualified and in some cases brand-new NGOs."
Judge Chutkan declined the nonprofits' request to compel Citibank to unfreeze the funds, opting instead to preserve the status quo while the case proceeds.
The Greenhouse Gas Reduction Fund, commonly referred to as the "green bank," was designed to finance clean energy projects and reduce greenhouse gas emissions. Republicans have criticized the fund as a politically motivated "slush fund," voting unanimously against the legislation that created it.
