A Federal Judge Blocks Trump Administration’s Clawback of Climate Funding

A federal District Court judge in Washington DC has blocked the Trump Administration’s attempt to clawback $14 billion in funding for the Greenhouse Gas Reduction Fund. This fund was created by the Inflation Reduction Act to finance clean energy and climate-friendly projects around the nation. The funding was subsequently distributed to Citibank for distribution to and fiscal oversight of the projects by designated recipients. 

Federal District Court Judge Tonya Chutkin last week issued a temporary restraining order directing Citibank to continue to hold the funds and blocking the Environmental Protection Agency (EPA) directive that the funds be returned to the EPA. She found that EPA’s alleged grounds for the clawback (assertions of fraud in the program) were “vague and unsubstantiated.” Judge Chutkin’s restraining order does not authorize Citibank to distribute the funds but requires it to continue holding the funding while the case is resolved. 

Background on the Clawback of Climate Funding

The Trump Administration, via Trump’s appointed EPA Administrator Lee Zeldin, launched its effort to terminate the program and take back all funding shortly after taking office. However, that effort immediately faced a series of roadblocks. “The effort stumbled on Feb. 17 when a senior career prosecutor in the U.S. attorney’s office in D.C. resigned rather than carry out the administration’s demand to freeze the funds at Citibank over possible wire fraud or a conspiracy against the government. U.S. prosecutors in a second office also declined, and a U.S. magistrate judge in Washington rejected an application for a seizure warrant, finding that the Justice Department failed to establish a reasonable belief that a crime occurred,” reported the Washington Post. 

When the EPA on March 11 attempted to simply take back the funds based on its own unsubstantiated administrative directive, it was sued by Climate United Fund, Coalition for Green Capital and Power Forward Communities, which received $7 billion, $5 billion and $2 billion, respectively, for distribution to projects authorized under the program. 

What Does this Mean for NC?

The court’s block to Trump’s clawback effort is good news for North Carolina, which has been awarded a $156 million grant under the Solar for All program for the state’s EnergizeNC program to help low-income and disadvantaged communities access solar energy and energy efficiency projects. 

Judge Chutkin’s order is only an interim block, pending further court hearings on the facts of the case. Since the Trump EPA’s allegations are transparently without a factual basis, observers assume that the administration will appeal her order rather than wait for fact-finding hearings which it is likely to lose. In the meantime, another of the Trump Administration’s lawless actions will remain on hold.