Federal Judge Questions Whether Epa Move To Rapidly Cancel 'green Bank' Grants Was Legal

A federal judge on Wednesday pressed an attorney for the Environmental Protection Agency about whether the agency broke the law when it swiftly terminated 20 billion worth of grants awarded to nonprofits for a green bank by allegedly bulldozing past proper rules and raising flimsy accusations of waste and fraud.

In a nearly three-hour hearing, U.S. District Judge Tanya Chutkan said the government had provided no substantial new evidence of wrongdoing by the nonprofits and considered technical arguments that could decide whether she is even the right person to hear the case.

Climate United Fund and other groups had sued the EPA, its Administrator Lee Zeldin and Citibank, which held the grant money, saying they had illegally denied the groups access to funds awarded last year to help finance clean energy and climate-friendly projects. They want Chutkan to give them access to those funds again, saying the freeze had paralyzed their work and jeopardized their basic operations.

"What plaintiffs are saying is if you wanted to stop that money from going out, you should have gone through the procedures under the" law, Chutkan said, adding that instead of doing that, the EPA appears to have demanded the bank simply freeze the funds and then quickly terminated the grants.

The Greenhouse Gas Reduction Fund, commonly referred to as a "green bank," was authorized by the 2022 Inflation Reduction Act. However, its goals run counter to the Trump administration's opposition to climate-friendly policies and its embrace of fossil fuels. Zeldin quickly made the bank a target, characterizing the grants as a "gold bar" scheme marred by conflicts of interest and potential fraud.