Judge Stops Trump Administration from Cancelling $14 Billion in ‘Green Bank’ Grants

 

Judge Halts Trump Administration’s Attempt to End $14 Billion in ‘Green Bank’ Grants

A federal judge on Tuesday temporarily blocked the Trump administration from canceling $14 billion in grants allocated to three climate organizations under the Biden administration, stating that the government’s "vague and unsubstantiated assertions of fraud are insufficient."

The ruling by U.S. District Judge Tonya Chutkan prevents the Environmental Protection Agency (EPA) from terminating the grants, which were part of a $20 billion program. Additionally, the judge prohibited Citibank, which manages the funds on behalf of the EPA, from transferring the money to the government or any other party.

EPA Administrator Lee Zeldin had accused the grant recipients of financial mismanagement, fraudulent practices, and conflicts of interest, leading to a freeze on the grants. However, after evaluating the case, Chutkan determined that Zeldin’s claims lacked sufficient justification.

"At this juncture, EPA Defendants have not sufficiently explained why unilaterally terminating Plaintiffs’ grant awards was a rational precursor to reviewing" the green bank program, Chutkan wrote.

This decision marked the third judicial ruling of the day against the Trump administration. The series of rulings unfolded amid an escalating dispute, with President Donald Trump calling for the impeachment of another judge who had briefly halted deportation flights. Trump's remarks prompted an unusual public response from Supreme Court Chief Justice John Roberts.

The lawsuit was filed by Climate United Fund, along with other environmental groups, against the EPA, Zeldin, and Citibank. They argued that they had been unlawfully denied access to $14 billion in grants awarded through the Greenhouse Gas Reduction Fund, a "green bank" established under the 2022 Inflation Reduction Act to support clean energy and climate projects.

Impact of the Grant Freeze

The grant recipients, including Climate United, the Coalition for Green Capital, and Power Forward Communities, asserted that the funding freeze had severely hindered their ability to finance new environmental initiatives and could potentially lead to staff layoffs. They dismissed allegations of financial misconduct as entirely baseless.

The plaintiffs also sought a court order to compel Citibank to unfreeze the funds, but Judge Chutkan declined this request. Instead, her ruling maintains the status quo while the legal case continues.

Climate United had been awarded nearly $7 billion, while the Coalition for Green Capital received $5 billion, and Power Forward Communities was granted $2 billion. The grant program was strongly opposed by Republican lawmakers, who unanimously voted against the legislation that created it and criticized it as an unchecked "slush fund."

Following the funding freeze, the EPA took steps to revoke the grants altogether.

Reactions to the Ruling

Beth Bafford, CEO of Climate United, welcomed the judge’s decision, calling it "a step in the right direction."

"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," Bafford said.

EPA Administrator Zeldin defended the decision to freeze the grants, arguing on X (formerly Twitter) that they had been awarded "in a manner that deliberately reduced the ability of EPA to conduct proper oversight."

"I will not rest until these hard-earned taxpayer dollars are returned to the U.S. Treasury," he stated.

Zeldin has characterized the grant program as a "gold bar" scheme riddled with potential fraud and ethical concerns.

"Twenty 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" nonprofit organizations, Zeldin said in a previously posted video.

Climate United, however, has strongly disputed these claims, asserting that the grant terminations were unlawful and that the federal government has failed to present any evidence of waste, fraud, or abuse.