An attorney representing the Climate United Fund sent a Tuesday letter to the Environmental Protection Agency asking for the agency to immediately reinstate the fund’s access to its nearly $7 billion Greenhouse Gas Reduction Fund grant, calling the freeze illegal.
“As already explained, Climate United’s preferred path forward is direct communication to find common ground,” said Adam Unikowsky, a partner at Jenner & Block. “But if the EPA adheres to its decision to suspend or terminate Climate United’s grant, it should stay its decision pending judicial review …. Climate United is likely to succeed in showing that the EPA’s action is illegal.”
Review of the matter is urgent, Unikowsky said, as Climate United faces “immediate, irreparable harm” if the funding is not reinstated.
If the group can’t find another source of funding, it will “shortly” run out of cash for operating expenses, employee pay, rent for some offices, and pay for contractors who provide services such as IT and legal, the letter said. In addition, Climate United won’t be able to meet its commitments for already approved loans and awards, which “would cause profound harm to its subawardees,” Unikowsky alleged.
With its GGRF funding, Climate United has so far made investments that include a $10.8 million pre-development loan for utility-scale solar projects on tribal lands in eastern Oregon and Idaho and $250 million toward electric truck manufacturing.
EPA Administrator Lee Zeldin commented on the freeze Wednesday, saying that his team had “uncovered extensive troubling developments with $20 billion in ‘gold bars’ that the Biden EPA ‘tossed off the Titanic.’”
“These taxpayer funds were parked at an outside financial institution to rush out the door and circumvent proper oversight; $20 billion was given to just eight pass-through nongovernmental entities in an effort riddled with self-dealing, conflicts of interest, and an extreme lack of qualifications,” Zeldin said in an EPA release. “The Department of Justice has been working hard to assist us so that we can remain accountable to American taxpayers.”
Unikowsky’s letter disputes that the EPA has the regulatory authority to claw back already disbursed funds, saying the agency is “legally required to spend those funds unless it satisfies the stringent requirements for rescinding an appropriation, which it has not done.”
“It appears that the EPA has impounded the appropriated funds in violation of federal law,” Unikowsky said.
A Monday letter from Zeldin to the EPA Office of Inspector General’s acting inspector general, Nicole Murley, alleged that “Financial Agent Agreements, Account Control Agreements (ACAs), and Amended Account Control Agreements” signed in the final months and days of the Biden administration “reduced rather than enhanced EPA oversight.”
Unikowsky also disputed this, saying the “financial agent arrangement with Citibank and the ACA were designed to provide EPA with full transparency into how grant funds are being spent. The EPA has real time view access into all accounts of both Climate United and any of its subrecipients.”
Citibank issued its first statement on the freeze Wednesday, according to Trellis Group, saying: “Citi was designated as the financial agent of the United States pursuant to the authority of the U.S. Treasury Department and has been working with the federal government in its efforts to address government officials’ concerns regarding this federal grant program. Our role as financial agent does not involve any discretion over which organizations receive grant funds. Citi will of course comply with any binding instructions from the federal government.”
Unikowsky alleges that the freeze must have been a “unilateral” decision by EPA, as “no other agency within the federal government has the authority to terminate or suspend Climate United’s funding, and Citibank is not acting on its own.”
“The EPA has thus either terminated Climate United’s [National Clean Investment Fund] grant, or at minimum suspended Climate United’s grant funding,” he said. “Either decision would be unlawful final agency action under the Administrative Procedure Act. The EPA should therefore reverse its decision to suspend or terminate Climate United’s grant.”
