One grantee reported $100 in revenue in 2023, but was awarded $2 billion in 2024.
A federal appeals court has ruled that the Environmental Protection Agency (EPA) could legally rescind $16 billion in climate grants that had been awarded as part of the 2022 Inflation Reduction Act.
That 2–1 ruling on Sept. 2 overturned a lower court order that blocked the administration from reclaiming the grant money and putting it to other use.
Where Did the Money Come From and Where Did it Go?
As part of the 2022 Inflation Reduction Act, Congress allocated $27 billion for the Greenhouse Gas Reduction Fund, which was designed to power alternative energy initiatives.
Nonprofit groups competed for the cash, winners were picked, and the full $27 billion was allocated by mid-August 2024, in the form of subgrants given out by three umbrella agencies.
Court documents later noted that the grant structure for this massive project was unique: Normally, the funds are held by the Treasury Department and disbursed as needed. For the first time, the EPA placed the funds with Citibank, which acted as a “financial agent” for the United States.
Trump Elected, Red Flags Raised
On Dec. 3, independent journalism outfit Project Veritas released a video showing an EPA employee explaining that the agency was distributing money for climate programs at an accelerated speed, as an “insurance policy” in case Trump decided to end those programs.
“It truly feels like we’re on the Titanic and we’re throwing like gold bars off the edge,” the employee said.
Such projects came under scrutiny after Trump took office. The FBI asked Citibank to freeze Greenhouse Gas Reduction Fund payments in February.
On March 3, the EPA said it was referring the Greenhouse Gas Reduction Fund to its inspector general for investigation of alleged “financial mismanagement, conflicts of interest,” and possible fraud.
The announcement noted that one recipient organization had reported $100 in revenue for 2023, but was awarded $2 billion in 2024.
EPA head Lee Zeldin released a statement on March 11 announcing he had terminated the grants, citing concerns over “program integrity, the award process, programmatic fraud, waste, and abuse, and misalignment with agency’s priorities.”
“The days of ‘throwing gold bars off the Titanic’ are over,” Zeldin said.
