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By Jeff Young
Environment and Sustainability Editor
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A Washington, D.C., Circuit Court judge issued a sharp rebuke Wednesday to the Trump administration's Environmental Protection Agency, saying the EPA made accusations of fraud without evidence and overstepped the bounds of its authority when it canceled climate funding agreements with green bank groups.
Judge Tanya Chutkan's stinging 39-page memorandum opinion granting the climate groups a preliminary injunction said that EPA acted "arbitrarily and capriciously," failed to explain its reasoning and acted "contrary to its regulations" when it suspended and then terminated the grants.
"Though repeatedly pressed on the issue, EPA offers no rational explanation for why it suspended the grants," Chutkan wrote. "Nor has EPA offered any rational explanation for why it needed to cancel the grants to safeguard taxpayer resources."
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Chutkan's order included a stern warning about what can happen when agencies "fail to operate within the bounds of the law."
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"They erode public trust, materially affect the rights and interests of individuals and organizations, and undermine confidence in the very institutions meant to serve the people," Chutkan wrote.
The case stems from grants under the Greenhouse Gas Reduction Fund (GGRF), part of the 2022 Inflation Reduction Act. Nonprofit groups were awarded money last year to help finance clean energy, energy efficiency and pollution reduction projects in low-income communities.
In February, the groups found their bank accounts were frozen with no explanation from EPA. After more than a month with no access to their bank accounts, the climate groups said, projects underway were at risk and the groups filed suit seeking to restore the funding.
On the eve of a court hearing, EPA Administrator Lee Zeldin announced he was terminating the GGRF agreements. Zeldin made several media appearances to declare that he was attempting to claw back the money.
Appearing on a Fox News program on February 23, Zeldin compared the GGRF awards to "throwing gold bars off the Titanic" with last-minute grants to politically connected groups.
"It's a clear-cut case of waste and abuse," Zeldin said. "The entire scheme in my opinion is criminal."
In court, however, lawyers representing the EPA "did not and have not identified a violation of any applicable regulation or any of the grant's terms," Chutkan wrote. During a hearing in early April the judge pressed the lawyers for any evidence to back up Zeldin's claims but EPA "never proffered this adequate evidence," Chutkan wrote.
Instead, EPA's lawyers shifted their position to argue that EPA was terminating the agreement because the agency changed its priorities with the arrival of the Trump administration.
Chutkan wrote that agencies can, of course, reevaluate and end programs, but they must follow the law when they do so. In this case, she wrote, EPA's actions "defy the plain language of the regulations" that govern its decision-making.
Further, she wrote, the GGRF and its funding were approved by Congress and the EPA overstepped its bounds when seeking to dismantle the fund.
"EPA has terminated programs established through lawfully enacted congressional appropriations without any basis in statutory authority," Chutkan wrote. "Agencies are not free simply to disregard statutory responsibilities."
The EPA has appealed Chutkan's injunction and in an email to Newsweek a spokesperson doubled down on the agency's unsubstantiated accusations of wrongdoing.
"The abuse within these programs run rampant with self-dealing and conflicts of interest, unqualified recipients, and deliberately limited agency oversight," the spokesperson said. "These grants are terminated, and the funds belong to the U.S. taxpayer."
Georgetown Law professor David Super told Newsweek via email that the core issue in the case is that the funds were properly disbursed to the bank and that nothing in the law gives the government a right to take the money back.
"The principle that the government cannot take money from private bank accounts without legal cause is essential to the civil liberties of all Americans," Super said. "If the courts did not block this action, the government could empty out the bank accounts of Social Security recipients at will, throwing them into financial destitution."
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