In Monday's legal filing, the Environmental Protection Agency provided no direct evidence of waste, fraud or abuse in its $20 billion Qi candidate grant program that the agency cancelled, citing “unacceptable risks.”
For weeks, grant programs have frozen its funds and got caught up in controversy as the EPA tried to hold back money approved by Congress for its clean energy program. At least three grant recipients have filed a lawsuit seeking access to the promised funds.
Last week, a federal judge ordered the EPA to freeze funds and justify the move to cancel the program. The motion comes from a lawsuit filed by Climate United, a nonprofit organization that was supposed to receive $7 billion under the initiative.
However, in response to the judge's order on Monday, the EPA did not present any new direct evidence. Instead, he mentioned an unidentified media report and a video released by Project Veritas, a conservative group known for using secret recordings to embarrass political opponents.
Filmed in a social setting, the video showed EPA staff members at the time, talking about the Biden administration's efforts to step down to quickly spend federal money. He compared it to throwing a “gold stick” from the Titanic. A former staff lawyer said he has not mentioned the $20 billion grant program.
However, EPA administrator Lee Zeldin seized the video, repeatedly suggesting that the grant is vulnerable to fraud. At the request of the Trump administration, $20 billion allocated to eight nonprofits has been frozen in accounts held at Citibank.
The situation escalated earlier this month when Climate United, which was supposed to receive $7 billion in funds, sued the EPA and Citibank in U.S. District Court for the District of Columbia, demanding the release of the funds.
The funding was intended to help financial institutions provide low-interest loans to businesses and developers for a variety of climate initiatives, including building solar arrays and thermal insulation to increase energy efficiency.
At a hearing last Wednesday, Climate United's attorney said the funding freeze prevented the organization from paying staff and risks eviction from the office.
Climate United asked Judge Tanya S. Chutkan to release some of the funds with a temporary restraining order while the lawsuit was resolved. However, on March 11, the evening before the scheduled hearing on the restraining order, the EPA completely ended its eight grants.
The EPA has the authority to cancel the contract if it finds waste, fraud, or abuse. However, the agency has so far made no direct evidence of it, and grantees say their claims are unfounded.
“These claims not only mislead and undermine important efforts to promote American energy independence in the community, local resilience and job creation, but are also consistent with many of the de facto inaccuracies and misinformation communicated by the EPA.”
Judge Chatkan gave the EPA until Monday, justifying the end of the grant and submitted evidence of waste, fraud or abuse.
In his application Monday, EPA Chief of Staff Eric Amidon reiterated his claim that the contract was revised after the election to weaken the oversight. He pointed to a video from Project Veritas and a media article aimed at revealing conflicts of interest between grant recipients and the Biden administration.
The agency's submission also mentioned ongoing investigations by the Department of Justice and the FBI, as well as individual investigations by representative inspectors at the agency.
The EPA submission also said Climate United grants no longer match the agency's priorities.
Judge Chutkan is expected to decide whether to order the release of funds Climate United is seeking.
In response to a request for comment, the EPA mentioned its submission on Monday. Climate United and Citibank declined to comment.
