Air Date: Week of February 21, 2025

EPA Administrator Lee Zeldin is looking to revoke $20 billion of funding that was granted via the Greenhouse Gas Reduction Fund, a portion of the Inflation Reduction Act approved by Congress in 2022. (Photo: Gage Skidmore, Flickr, CC BY-SA 2.0)

The Trump EPA is trying to cancel $20 billion dollars of funding in what’s known as the “Green Bank”, which provides loans for local clean energy, energy efficiency upgrades and more. Without providing evidence, EPA Administrator Lee Zeldin accused the program of being rife with fraud and waste. Jillian Blanchard, Vice President of Climate Change and Environmental Justice at Lawyers for Good Government, joins Hosts Steve Curwood and Jenni Doering to discuss the impacts to nonprofits and private contractors who are unable to access their funds.

Transcript

CURWOOD: From PRX and the Jennifer and Ted Stanley Studios at the University of Massachusetts Boston, this is Living on Earth. I’m Steve Curwood.

DOERING: And I’m Jenni Doering.

The Trump administration has brought a halt to major environmental initiatives established by the Biden administration, in part by attempting to freeze billions of dollars in grants and loans. Now the Trump EPA is targeting $20 billion dollars of the Greenhouse Gas Reduction Fund or the “Green Bank” which provides investments for projects across the country.

CURWOOD: Without providing evidence, EPA administrator Lee Zeldin accused the program of being rife with fraud and waste. Joining us now is Jillian Blanchard, Vice President of Climate Change and Environmental Justice at Lawyers for Good Government. Welcome back to Living on Earth!

BLANCHARD: Thank you so much, Steve, it's nice to be here.

DOERING: So Jillian, we're looking to talk about this $20 billion in funding that the EPA is attempting to claw back. But first, what's the legal and political context of this?

BLANCHARD: The legal and political context of the $20 billion is that it's part of the Greenhouse Gas Reduction Fund, which is part of the Inflation Reduction Act. So there's a lot of different factors at play. Number one, Congress approved the Inflation Reduction Act, which means the Greenhouse Gas Reduction Fund is law. Number two, contracts were put in place very, very carefully by Treasury and by EPA and by many, many lawyers to prevent any kind of fraud, waste or abuse. And number three, the Inflation Reduction Act funding has been ordered by a court to flow during the pendency of a litigation. So there is an enforcement order out right now, under a temporary restraining order by Judge McConnell, ordering the government to allow all funding under the Inflation Reduction Act to flow. So any efforts to pause that federal funding is problematic, not only because the law requires it to flow, but because a judge has ordered it to flow, and because there is no current evidence substantiating any claims that the government may be making about fraud or waste related to that $20 billion.

CURWOOD: So now, as I understand it, the government has already deposited this money at Citibank in what's called a Green Bank, I think 14 billion for a Clean Investment Fund, and another 6 billion for communities. So that money belongs to those communities? Belongs to the government? Is being held up from these nonprofits? What's going on?

BLANCHARD: That’s right. So the federal government does this all the time with Treasury. They create what's called federal agent agreements where they have, like a third party agent, especially when it's important funding that they want to make sure has no fraud or waste. And they set up these third party agreements, typically with banks or financial agents. Here it was Citibank, and after a very, very rigorous process of selecting the eight most eligible nonprofits to be able to send this money down to everyday American people, to communities as you mentioned, to invest in American people and invest in new energy sources, that money was then transferred to Citibank to hold basically as a fiduciary. So they have a high duty of care not to release those funds unless they strictly meet the requirements of the Greenhouse Gas Reduction Fund. So Citibank has accepted that responsibility on behalf of the eight nonprofits, and then they are able to dole out that money when and if it's required, under the very clear terms of the legally binding agreements between the federal government and these eight nonprofits. So the idea that this can now just be frozen is not only legally challengeable, but it challenges the whole point of creating the Greenhouse Gas Reduction Fund. And the other thing that I should say is there are very clear processes that EPA and Treasury baked into the third party arrangements that if there's any substantial evidence of fraud in any way or abuse, they can submit what's called a Notice of Exclusive Control by showing that evidence, and then they can pull back the control. Because, of course, they wanted extra controls to make sure, even though they were very careful, if anything did happen, they had a very clear due process for pulling those funds back. That process is not being followed right now.

DOERING: And by the way, Jillian, what is this money going towards and what's at stake here? What are some of the programs that have been awarded, and what would they plan to use it for?

BLANCHARD: So these funds have been awarded to eight different nonprofits who rigorously met with communities, what are called CDFIs, which are local community lending institutions to figure out how best to get these dollars invested into communities that need it the most. The whole point was two main goals that this administration says they care deeply about. Number one, reducing energy costs for low income people, everyday Americans, by investing in new clean technologies to reduce the burden of energy costs, which is a significant cost in everyday households. And number two, investment. Creating market forces, leveraging market forces, to invest in these communities, not as a dole out, literally. In fact, that was one of the things that people pushed back on the Biden administration for. They wanted this money to be granted, but it's not. It's actually given out in the form of investment, of loans that require certain amounts of energy savings and cost savings in order to be created. So it's two very critical things that this administration says they really want to support. Market forces like investment in industry and local businesses and reducing energy costs and increasing energy dominance. So it is very hypocritical for this administration to be attacking this program now, because everyday Americans on the ground, communities, as an example, that were going to get a loan to build a Climate Resilience Project that reduces greenhouse gasses and it reduces energy costs and it sets up a place in the community for people to go when a devastating storm hits. Those types of projects are at risk and will not be funded because of this.

CURWOOD: So these are loans, ultimately. So what is the claim that the EPA is making to say, oh, government shouldn't even make these loans? What is their reasoning for trying to block the disbursement of this investment resource.

BLANCHARD: Well, it's a moving target. Steve. First they claimed that they had the authority, then Judge McConnell said that they don't actually have that authority - well, at least while the litigation is pending, because it causes too much harm on the ground, as we're seeing. But now they're claiming unsubstantiated, meritless claims of fraud, waste and abuse. There was a short video, I think that's now been taken down, posted by Lee Zeldin, bragging about identifying gold bars that were being tossed off the Titanic. And those claims? Completely unsubstantiated. In fact, the EPA employee that has been widely sent around, there's a video of him talking, he didn't even work on the Greenhouse Gas Reduction Fund program at all. And that is the basis, as I understand it, although you'd have to ask the government, that's the basis, as I understand it, for their unsubstantiated claims of fraud and waste. I have not seen any other shred or scintilla of evidence to identify any fraud or waste beyond that one video, that is irrelevant to the Greenhouse Gas Reduction Fund program.

DOERING: There’s also a claim from Administrator Zeldin that the Biden administration rushed these funds through. How accurate is that?

BLANCHARD: With respect to the Greenhouse Gas Reduction Funds, it's not accurate at all. The Greenhouse Gas Reduction Funds had a statutory deadline written into the Inflation Reduction Act, that the funds needed to be awarded by September, and it went through a very, very, very rigorous process of being reviewed and approved by many different lawyers, by in-house counsel, by outside counsel, by Treasury, by the EPA, by Citibank, who does these types of financial arrangements all the time in trust with very, very clear and rigorous requirements. All of that was done to make sure that this particular money would be very, very protected against any kind of fraud, waste or abuse. So the suggestion that it was this rush job at the very final days the Biden administration is not correct.

CURWOOD: So Jillian, as I understand it, if there is no cause found when the EPA is trying to take back these funds, the government might just run the risk of litigation for breaching these green bank contracts. What could happen then?

BLANCHARD: That’s right. At that point, each of the nonprofits, the eight of them in the National Clean Investment Fund and Clean Communities Investment Accelerator, those two buckets with 20 billion. Each one of those nonprofits will have a claim against the federal government, a very valid claim, that they have breached their obligation to pay out their part of the bargain. These are legally obligated contracts that are now being breached on a baseless claim. To the extent that there is no cause, there is no fraud, there is no waste or abuse, these nonprofits will have a very clear claim against the federal government, which again, will cost the federal government money, will cost taxpayers money, and will cost these communities key months, key moments, key dollars in reducing their energy burdens and bringing in new technology and industry into the market.

DOERING: Sounds like a mess, Jillian.

BLANCHARD: It is a mess. And I think that's part of the point, is a shock and awe campaign to shotgun approach attack everything that the Biden administration attempted to do.

DOERING: So if you wouldn't mind peering into your crystal ball, what do you think the chances are that these grantees will actually get the money that they've been promised?

BLANCHARD: If we're just talking about the Greenhouse Gas Reduction Fund, I do think they have very strong legal claims, but unfortunately, the way this federal government is operating, it will require them to bring their own individual lawsuits, which will cost them and their communities millions of dollars. In the end, I do believe that justice would prevail, but it will waste months, potentially years, and different programs will just die out. Nonprofits that were relying on these loans to build these projects will go under. They don't have financial buffers to wait it out for litigation, and I do believe that's what this administration is banking on, that the American people will suffer enough that they'll just stop trying.

DOERING: By the way. Jillian, how might gumming up this funding hurt the private sector?

BLANCHARD: Oh, it's causing immense impacts to the private sector. The funding that was coming through these nonprofits goes to many, many different private contractors. In fact, there's so many private contractors that are hurting right now, not just because of the Greenhouse Gas Reduction funding issues, but the stop-start that has happened over the past three weeks on billions of dollars of grant funding. There are contractors who have been laid off. There are contractors who did not get their invoices paid, there are contractors who can't have equipment paid for. It is devastating the private market. In fact, many of them are closing up shop as a result of this, because even if they win on the merits of these cases, and they have very, very strong legal arguments, they just can't bear the financial burden of waiting for these things to play out in the courts.

CURWOOD: Jillian, give us the bottom line here. To what extent are we seeing a battle between the authority of the White House versus the authority of the courts and Congress, for that matter.

BLANCHARD: It’s a really important moment in history, really. This executive seems to believe that they have and should have more power than both Congress and the courts. With respect to Congress, they have essentially acted as if they control the power of the purse, but very clearly written into the Constitution is the separation of powers that grants Congress and Congress alone the power of making funding decisions. The executive's only job is to enforce that law. They are the enforcers. They are not the arbiters of whether or not the law should be enforced. And on the court side, this executive is also suggesting that they're the ones who have the ability to interpret federal agency law, and the courts have said very clearly, all the way back to Marbury v. Madison, that the court system, the judiciary, Article Three of the Constitution, is the only one that has the right and the authority under the Constitution to interpret the law. Not the executive. So everything this executive is doing, whether it's executive orders that expand far beyond their executive authority, or whether it's attempts to freeze federal funding that's in legally obligated funds that have been approved by Congress is this executive's effort to push past their legally authorized executive authority under the Constitution, and that should concern us all.

CURWOOD: Jillian Blanchard is the Vice President of Climate Change and Environmental Justice at Lawyers for Good Government. Jillian, thank you so much for joining us today.

DOERING: Thank you so much. Jillian.

BLANCHARD: Absolutely, thank you for having me.

 

Links

E&E News by POLITICO | “Zeldin’s $20B Take-Back Bid Risks Plunging EPA Into Legal Peril”

Inside Climate News | “Climate and Environmental Justice Programs Stalled by Trump Freeze, Despite Court Orders”