Judge blocks Trump’s EPA from terminating $14 billion in ‘green bank’ grants after accusations of fraud

A federal judge on Tuesday blocked the Environmental Protection Agency from terminating $14 billion in grants awarded to three climate groups by the Biden administration.

U.S. District Judge Tonya Chutkan ruled that the federal government’s “vague and unsubstantiated assertions of fraud are insufficient.” The order prevents the EPA from ending the grant program, which totaled $20 billion. The judge also blocked Citibank, which holds the money on behalf of EPA, from transferring it to the government or anyone else.

EPA Administrator Lee Zeldin claimed the grant recipients engaged in mismanagement, fraud and self-dealing in announcing that he froze and moved to terminate the grants, but the judge said Zeldin’s allegations were inadequate.

“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.

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A federal judge blocked the EPA from terminating $14 billion in grants awarded to three climate groups by the Biden administration. (iStock)

The grant recipients sued the EPA, Zeldin and Citibank, arguing that they had illegally denied the groups access to $14 billion awarded last year through the Greenhouse Gas Reduction Fund, commonly referred to as a “green bank.” The program, which consisted of two initiatives worth $14 billion and $6 billion, respectively, was approved by Congress under the 2022 Inflation Reduction Act to support clean energy and climate-friendly projects.

Three groups — Climate United, the Coalition for Green Capital and Power Forward Communities — said the frozen grants prevented them from funding new projects and might force them to lay off staff. The groups said the allegations of mishandling funds were meritless.

The groups also asked Chutkan to order Citibank to unfreeze the account, but the judge declined. The order only preserves the status quo as the case moves forward.

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EPA Administrator Lee Zeldin claimed the grant recipients engaged in mismanagement, fraud and self-dealing. (Getty Images)

Climate United was awarded nearly $7 billion, the Coalition for Green Capital won $5 billion and Power Forward Communities — a group linked to Democrat Stacey Abrams — was awarded $2 billion.

Beth Bafford. CEO of Climate United, said the judge’s ruling was “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.

Zeldin said Tuesday on X that the grants were awarded “in a manner that deliberately reduced the ability of EPA to conduct proper oversight,” adding that he “will not rest until these hard-earned taxpayer dollars are returned to the U.S. Treasury.”

Zeldin said Tuesday that the grants were awarded “in a manner that deliberately reduced the ability of EPA to conduct proper oversight.” (AP Photo/Mark Schiefelbein)

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Zeldin has described the grants as a “gold bar” scheme involved in conflicts of interest and potential fraud.

“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 NGOs,” Zeldin previously said in a video posted on X.

Climate United contended that the termination was unlawful, arguing the federal government had identified no evidence of waste, fraud or abuse.