An attorney representing the Climate United Fund recently sent a letter to the Environmental Protection Agency (EPA), urging the agency to immediately restore access to its nearly $7 billion Greenhouse Gas Reduction Fund grant. The attorney described the current funding freeze as illegal.
Adam Unikowsky, a partner at Jenner & Block, stated that Climate United hopes for direct communication to resolve the situation. However, he warned that if the EPA decides to suspend or terminate the grant, it should postpone its decision until there is a judicial review. He believes that Climate United has strong grounds to prove the EPA’s actions are unlawful.
Unikowsky emphasized the urgency of the matter, explaining that without funding, Climate United faces “immediate, irreparable harm.” The organization risks running out of cash for essential expenses, including employee salaries, rent, and services from contractors. Additionally, it would be unable to fulfill commitments for already approved loans and awards, which could greatly impact its subawardees.
So far, Climate United has made significant investments with its GGRF funding, including a $10.8 million loan for solar projects on tribal lands in Oregon and Idaho and $250 million for electric truck manufacturing.
In response to the funding freeze, EPA Administrator Lee Zeldin remarked that there were discovered issues related to $20 billion in funds, which he described as being improperly managed. He asserted that these taxpayer dollars were misallocated to various entities without proper oversight and that the Department of Justice is assisting in ensuring accountability.
Unikowsky refuted the EPA’s claims regarding the authority to recoup already distributed funds, stating that federal law dictates such funds must be spent unless specific requirements for rescinding an appropriation are met, which he argues the EPA has not done.
Additionally, a letter from Zeldin alleged that agreements made at the end of the Biden administration undermined EPA oversight. Unikowsky countered this, stating that the financial arrangements in place were designed to ensure transparency in how grant funds were utilized and that the EPA has access to real-time data regarding Climate United’s accounts and those of its subrecipients.
Citibank, designated as the federal government’s financial agent, stated that it is cooperating with the government and has no control over which organizations receive grant funds. Unikowsky indicated that the freeze seems to have been an unilateral decision by the EPA since no other government agency can terminate or suspend Climate United’s funding.
He concluded that the EPA’s actions either constitute an unlawful termination of Climate United’s grant or an improper suspension and urged the agency to reverse its decision.