Newly reported internal EPA emails are highlighting the Trump administration’s heavy focus on delaying disbursement of high-profile “green bank” grant awards with an eye to scuttling the program, observers say, even though officials are aware of the legal risks of their moves.
“They don't need to win in the short term or maybe even the long term, all they need is delay,” former EPA lawyer Gary Jonesi told Inside EPA’s Climate Extra about the March 9 emails, first reported by Politico, in which an agency attorney expressed concern about “significant legal vulnerabilities” with officials’ strategy of pausing the awards before officials formally found any wrongdoing from grant recipients.
Jonesi added that congressional changes to the Inflation Reduction Act (IRA) grant program could accomplish the Trump EPA’s end goal. “Similar to its approach to deportations, the Trump administration is depriving the [Greenhouse Gas Reduction Fund (GHGRF)] grant recipients of due process . . . probably as part of a scheme to stall long enough to statutorily rescind the grants in a reconciliation bill.”
However, former Biden EPA Region 1 Administrator David Cash says it is “hard to imagine” a statutory change that could require Citibank and the recipients of the GHGRF to “return the funding.”
Instead, Cash, who sat on the GHGRF Steering Committee that helped design the program’s implementation, posits that if Trump officials are attempting to run out the clock, they’re doing so to “exhaust” the plaintiffs with attorneys’ fees.
Stan Meiburg, former acting deputy administrator for EPA and executive director at Sabin Center for the environment at Wake Forest University, said the issue of whether Congress could roll back the program is “uncertain,” nothing these circumstances are “highly unusual.”
“Congress might try something, but it seems a very difficult row to hoe given contract law,” he said.
The April 23 Politico report comes as the U.S. Court of Appeals for the District of Columbia Circuit is poised to rule soon on whether to grant EPA’s requested stay of a district court’s preliminary injunction that would unfreeze the funding.
The Biden administration obligated the funds to the grant recipients. EPA signed an agreement with Citibank in which the bank would manage the funds as the government’s financial agent, and Citi then issued periodic payments at recipients’ request. While the Trump EPA attempted to terminate the awards, Judge Tanya Chutkan of the U.S. District Court for the District of Columbia issued a preliminary injunction finding that termination was likely illegal, and ordering Citi and EPA to allow the grantees to access their funds for the first time in months.
The leak of the March 9 internal emails underscores the contrast between officials’ comments versus their arguments in court.
EPA Administrator Lee Zeldin has made numerous public comments deriding both the grantees and the program overall. In an April 20 interview on Face the Nation, Zeldin cited numerous “unqualified recipients” of GHGRF grants. For example, he flagged a clause in one grant agreement with a major recipient that allowed it 90 days to complete training called “How to Develop a Budget.”
“If we had more time and you said, ‘Hey, Lee, why don't you provide for me 15 more examples of evidence right now,’” including self-dealing conflicts of interest, unqualified recipients and reduced oversight,” he said.
Yet Department (DOJ) attorneys representing EPA in the litigation are edging away from claims about specific groups’ wrongdoing in lieu of a focus on claimed structural issues with the program.
But Chutkan in an April 16 ruling said EPA failed to provide any “rational explanation” for why it suspended the grants, and then later sought to terminate them.
Meiburg added that the emails demonstrate that these officials “know what their objective is -- which is to try to get back the $20 billion dollars,” and they’re trying to reverse-engineer a “rationale” to walk back the program.
Internal ‘Tension’
Cash says this underscores an internal “tension” at EPA. “One of my big takeaways [from the just-published emails] is that there are a lot of lawyers at EPA who are very committed to following the law and understand that they need to follow statute.” And yet, “there are clearly people in the administration” -- including Zeldin himself, as demonstrated by his public statements -- that are “flouting . . . the law.”
EPA says inquiries at both the Justice Department (DOJ) and EPA’s Office of Inspector General remain ongoing. The emails show EPA prioritized pausing the funds so it could continue those investigations, leaving open the possibility of being able to roll back the funds.
But numerous observers say that approach violates due process.
The grant recipients complain that EPA asked them to respond to questions about the waste, fraud, and abuse concerns -- but then terminated the grants days later before they could respond.
Jonesi asserts EPA “did not wait for responses from the grant recipients because such responses would further undermine Lee Zeldin’s preordained conclusion that there was widespread fraud in the GGRF grant process. This shameless ploy by senior administration lawyers and advisors will hurt red and blue districts alike.”
EPA could restart its grant termination process after it completes the investigations -- and potentially finds evidence to back Zeldin’s claims. But Cash says it’s “highly unlikely” that officials will find any such evidence.
“This was the most rigorous, credible process . . . I’ve ever seen in my time in federal and state governance,” Cash says.
Meanwhile, Myron Ebell, who led Trump’s 2017 EPA transition team and has long criticized climate mitigation policy, told Politico that even if the court doesn’t side with EPA, that isn’t necessarily a “loss” for the agency.
“Then we’ll be where we are now,” he said. “I don’t see that that’s a loss.”
“We’ll go back to the status quo, and if the administration wants to end these various green grant programs, they will have to go to Congress and say ‘Well, we tried to do it.’”
The immediate future of the funds -- which is the primary source of revenue for some of the groups -- hangs on the forthcoming D.C. Circuit stay decision.
In another indication that EPA is seeking delay, an April 23 reply brief from the agency says the court should grant its stay motion and then deny plaintiffs’ request for expedited briefing.
Email Language
In the March 9 emails, James Payne, deputy general counsel for EPA Media and Regional Law Offices, flags “significant legal vulnerabilities” with EPA’s then-planned approach to halting grantees’ access to their funds at Citibank.
The email floats a draft “directive” from EPA’s Chief of Staff stating that due to DOJ’s criminal investigation and another investigation at EPA’s IG, EPA is temporarily taking over the bank accounts held at Citi “until further notice.”
“Noting that the recommended approach below is believed to have significant legal vulnerabilities including for potential future substantial monetary damage claims before the Court of Federal Claims. Having said that, and consistent with policy direction, we have the draft directive below that is aimed to minimize the vulnerabilities and are circulating it here for DOJ input.”
Avi Garbow, who served as the Obama EPA’s general counsel, told Politico an EPA attorney would not use the adjective “significant” lightly.
Another email underscores EPA’s focus on quickly halting the money -- even amid ongoing investigations that have yet to reveal any “waste, fraud and abuse” or other wrongdoing.
“The short-term objective is to prevent disbursement of the grant funds, so that ongoing criminal and civil investigations into the program can proceed without risk that the funds will permanently disappear,” an email from DOJ attorney Matt Galeotti says.
The agency terminated the grants March 11, and pivoted its legal strategy to argue that officials needn’t prove any wrongdoing by specific applicants. Instead, EPA asserts a broad lack of oversight and argues it can roll back the grants simply because of the new administration’s changed priorities.
The emails also come a month after a separate batch of internal emails similarly showed agency officials discussed flawed legal justification for terminating dozens of environmental justice grants.
Those recipients received emails in late February stating that their grants were terminated on the grounds that they no longer fit the agency’s priorities, referring to a clause in their grants’ general terms and conditions allowing for awards to be voided. But the clause applied only to grants issued between Aug. 13, 2020, and Sept. 30, 2024, and almost half of the terminated grants were finalized or updated after Sept. 30. -- Abigail Mihaly (amihaly@iwpnews.com) and Doug Obey (dobey@iwpnews.com)