Judge blocks Trump administration from terminating $14 billion in ‘green bank’ grants

By MICHAEL PHILLIS and MATTHEW DALY, Associated Press

WASHINGTON (AP) — A federal judge on Tuesday blocked the Trump administration from terminating $14 billion in grants awarded to three climate groups by the Biden administration, saying the government’s “vague and unsubstantiated assertions of fraud are insufficient.”

The order by U.S. District Judge Tonya Chutkan prevents — for now — the Environmental Protection Agency 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 accused the grant recipients of mismanagement, fraud and self-dealing and froze the grants. But after reviewing arguments in the case, Chutkan said Zeldin’s allegations fell short.

“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.

She was the third judge of the day to rule against the Trump administration. The trio of rulings came within hours of an extraordinary conflict, as President Donald Trump called for the impeachment of another judge who had temporarily blocked deportation flights. Trump’s message drew a rare rebuke from Supreme Court Chief Justice John Roberts.

Climate United Fund and other groups had sued the EPA, Zeldin and Citibank, saying 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 was created by the 2022 Inflation Reduction Act to finance clean energy and climate-friendly projects.

Climate United and two other groups, the Coalition for Green Capital and Power Forward Communities, said the freeze not only prevented them from financing new projects, but might force them to lay off staff. They said the allegations they were mishandling funds were utterly meritless.

The nonprofits also wanted Judge Chutkan to order Citibank to unfreeze the account. She declined to do so. The order simply preserves the status quo while the case proceeds.

Climate United was awarded nearly $7 billion, the Coalition for Green Capital won $5 billion and Power Forward Communities was awarded $2 billion. Republicans unanimously voted against the law that created the grant program and have denounced it as an unaccountable “slush fund.”

After the funds were frozen, the EPA moved to terminate the grants.

Climate United CEO Beth Bafford said the judge’s decision Tuesday 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 in a statement posted on X Tuesday that the grants were awarded “in a manner that deliberately reduced the ability of EPA to conduct proper oversight.”

“I will not rest until these hard-earned taxpayer dollars are returned to the U.S. Treasury,” he said.

Zeldin has characterized the grants as a “gold bar” scheme marred by 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” nonprofit organizations, Zeldin said in a video previously posted online.

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

Phillis reported from St. Louis.