A federal judge issued an order Tuesday blocking the U.S. Environmental Protection Agency’s freeze order on Greenhouse Gas Reduction Fund grants, finding that the EPA did not provide sufficient evidence of waste, fraud or abuse.
“Based on the record before the court, and under the relevant statutes and various agreements, it does not appear that EPA Defendants took the legally required steps necessary to terminate these grants, such that its actions were arbitrary and capricious,” said U.S. District Court for the District of Columbia Judge Tanya Chutkan in a Tuesday memorandum opinion.
The case was brought before Chutkan on March 8 by the Climate United Fund, the recipient of a $6.97 billion Greenhouse Gas Reduction Fund grant which was frozen Feb. 18 after the EPA issued a notice of termination regarding the $20 billion GGRF fund.
The Climate United Fund said in a Monday release that the group, along with two other National Clean Investment Fund awardees, had been granted a temporary restraining order “halting the [EPA’s] termination of the grant agreements and preventing Citibank from transferring funds out of grantee bank accounts.”
“Climate United will continue its legal process to fully restore its program,” the group said.
The other two NCIF awardees, the Coalition for Green Capital and Power Forward Communities, had $5 billion and $2 billion frozen, respectively, PBS reported.
In a March 2 letter to Acting Inspector General Nicole Murley, Acting Deputy EPA Administrator Chad McIntosh said the EPA “launched certain oversight and accountability measures” to investigate GGRF disbursement for “financial mismanagement, conflicts of interest, and oversight failures.”
But Chutkan said that when questioned at a March 12 hearing, “EPA Defendants proffered no evidence to support their basis for the sudden terminations, or that they followed the proper procedures.”
“In the termination letters, EPA Defendants vaguely reference ‘multiple ongoing investigations’ into ‘programmatic waste, fraud, and abuse and conflicts of interest’ but offer no specific information about such investigations, factual support for the decision, or an individualized explanation for each Plaintiff,” Chutkan said. “This is insufficient.”
While EPA has the right to terminate grant agreements for waste, fraud or abuse, doing so requires credible evidence of a violation of federal law or the civil False Claims Act, the judge wrote, adding that the EPA has not yet provided the evidence required to justify a termination.
The Monday order states that fund holder Citibank “must process, disburse, and release all funds related to requests submitted under the Account Control Agreement for program administration (operating expenses),” and “may not transfer, disburse, or otherwise move funds it is holding in accounts established in connection with Climate United’s grant without further order from this Court.”
The EPA also “may not transmit or otherwise attempt to give effect to a Notice of Exclusive Control under the [Account Control Agreement] as related to Climate United’s accounts” and neither EPA or Citibank can “implement, take action pursuant to, or otherwise attempt to give effect to EPA’s ‘Notice of Termination’,” Chutkan wrote.
