March 12 Update:
A US federal judge ordered the Environmental Protection Agency to submit solid evidence for freezing funds, and ultimately terminating a grant, awarded to Climate United and eight other nonprofits under the Biden administration’s Greenhouse Gas Reduction Fund.
“I don’t have the credible evidence that’s required,” Judge Tanya Chutkan of the US District of Columbia scolded the agency at a hearing. The hearing was initially scheduled to review Climate United’s request for a temporary restraining order to unlock $7 billion in grant funds held at Citibank, but was upended by EPA chief Lee Zeldin’s termination of the entire $20 billion grant program yesterday.
Chutkan gave the EPA and Climate United until Monday at 5pm ET to resubmit evidence. Climate United will update its claim in light of the termination notice, which its lawyers argued violated its constitutional right to due process. The EPA will need to back up its claims of fraud. As for Citi, which argued it froze the funds at the recommendation of the FBI, the judge admitted the bank “was between a rock and a hard place.”
The judge has yet to rule on Climate United’s request for a temporary restraining order, which would unlock the funds.
Capping a day of legal maneuvering, Environmental Protection Agency chief Lee Zeldin officially terminated $20 billion in green lending financing under the Inflation Reduction Act.
The Coalition for Green Capital and Power Forward Communities earlier in the day filed suit against the Citibank, the funds’ custodial agent, to gain the release of congressionally appropriated funds held by the bank as part of the Greenhouse Gas Reduction Program. Climate United, the largest recipient, had filed suit against Citi and the EPA last weekend (see, “Climate United carries legal banner in battle for the green bank”); a federal judge will hold a hearing Wednesday afternoon on the group’s request for a temporary restraining order to release the funds.
It was unclear whether Zeldin had triggered a contractual clause that could give the EPA legal cover by issuing a last-minute “notice of exclusive control.” That would require a finding in writing of fraud, waste or abuse. In a press release, Zeldin said he had identified “material deficiencies which pose an unacceptable risk to the lawful execution of these grants.“
Grants are typically considered enforceable contracts, suggesting more legal wrangling ahead.
“The Coalition for Green Capital and its network has been working in partnerships across the country to support projects that lower electricity costs, create good-paying jobs, and deliver clean air and water for all Americans,” the organization said is a statement.
“Today’s action by the EPA is an unauthorized and unlawful attempt to terminate our grant. We are considering all available legal options.
The move comes ahead of grand jury appearances by GGRF awardees as part of a Department of Justice investigation into the program.
Other battles we’re watching:
DOGE and HUD axe affordable housing contracts
The US Department of Housing and Urban Development, or HUD, has canceled millions of dollars in contracts with affordable housing providers, reports Bloomberg News.
Affected organizations include Local Initiative Support Corporation, or LISC, and Enterprise Community Partners, which administer grants and provide technical assistance to affordable housing projects across the country. The nonprofit lenders are also part of the Power Forward Communities coalition, which Tuesday filed suit to unblock financing for energy retrofits under the Greenhouse Gas Reduction Fund.
The cancellations come following a Department of Government Efficiency, or DOGE, review of the nonprofits’ websites and LinkedIn profiles revealed terms associated with DEI, a purported violation of President Trump’s executive order ending such programs.
Republican rally for clean energy tax credits
Red states and districts benefited the most from the surge in private investment and job creation spurred by the Inflation Reduction Act. Now, some 21 Republicans led by Rep. Andrew Garbarino (R-NY) have penned a new letter to the Ways and Means Chair Jason Smith (R-Mo.) urging the committee to preserve the credits.
“We need the projects that are currently under development to be brought online so we can continue the President’s ‘America First’ agenda,” Garbarino told Politico.
SJF Ventures’ David Kirkpatrick hailed the bipartisan support and pledged, “I will be back in DC next week with many from Impact Capital Managers to advocate for policy stability to preserve the jobs, investment, infrastructure, savings, resilience, and American competitiveness.”
