A federal judge recently intervened to stop the U.S. Environmental Protection Agency (EPA) from halting grant funds from the Greenhouse Gas Reduction Fund. The judge determined that the EPA failed to show enough evidence for claims of waste, fraud, or misuse of funds.
In a memo released on Tuesday, U.S. District Court Judge Tanya Chutkan stated, “The record doesn’t show that the EPA took the necessary legal steps to terminate these grants, making their actions arbitrary and capricious.”
This ruling came in response to a case initiated on March 8 by the Climate United Fund, which had been awarded a grant of $6.97 billion. The grant was put on hold on February 18 when the EPA issued a termination notice concerning the entire $20 billion fund.
In a statement released on Monday, the Climate United Fund announced that they, along with two other recipients of the National Clean Investment Fund, secured a temporary order stopping the EPA from terminating grant agreements and preventing Citibank from moving funds from grantee accounts.
The group expressed its commitment to continue the legal fight to fully restore its program.
The other two recipients, the Coalition for Green Capital and Power Forward Communities, had $5 billion and $2 billion of their funds frozen, respectively.
In a letter dated March 2, Acting Deputy EPA Administrator Chad McIntosh mentioned that the EPA initiated certain oversight measures to assess GGRF funding for issues such as financial mismanagement and conflicts of interest.
However, during a hearing on March 12, Judge Chutkan pointed out that the EPA could not provide specific evidence to justify the abrupt termination of funds.
She noted, “The termination letters vaguely reference ongoing investigations into waste, fraud, and abuse but do not provide detailed information about these claims or justify the decision for each plaintiff, which is insufficient.”
While the EPA has the authority to terminate grants, this must be supported by credible evidence of wrongdoing. The judge emphasized that the EPA had not yet presented sufficient proof to warrant such actions.
The order instructed Citibank to process and release all funds requested under the agreement for operating expenses and prohibited any transfer of funds related to Climate United’s grant without further court approval.
Additionally, the EPA was instructed not to attempt to enforce the termination notice related to Climate United’s accounts, ensuring that neither the EPA nor Citibank could take any further action regarding the grant terminations without court approval.