Trump administration cuts $20 bn in climate funds, judge seeks evidence of fraud

A U.S. judge on Wednesday pressed President Donald Trump’s administration for evidence of fraud, waste and abuse in a $20 billion climate funding program that the administration has moved to terminate.

U.S. District Judge Tanya Chutkan said she would order the administration to file a sworn statement by Monday detailing the evidence used to justify ending the grant, which aimed to fund greenhouse gas reduction projects.

“You can’t even tell me what the evidence of malfeasance is,” Chutkan told a lawyer for the Trump administration during a hearing in U.S. District Court in Washington.

Climate advocates and Democrats say the move illegally seizes money allocated for clean energy and transportation for disadvantaged communities.

Environmental Protection Agency Administrator Lee Zeldin had publicized his campaign to claw back money from the Greenhouse Gas Reduction Fund, which Congress appropriated under the Biden administration to kick-start projects aimed at curbing pollution.

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In a statement late on Tuesday, the EPA said it had clawed back the funds, saying the program did not align with the agency’s priorities, citing concerns with potential fraud, waste and abuse, although it gave no details or evidence for the allegations.

Chutkan’s demand for evidence came as part of a lawsuit brought by the Climate United Fund advocacy group, which sued the EPA and Citigroup for withholding the funds.

The group is seeking an emergency order temporarily requiring Citibank to disburse funds at its request, warning that it will run out of money as soon as Friday.

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A lawyer for the Trump administration argued the court no longer had jurisdiction over the dispute because the grant had already been terminated.

The move is the latest development in the EPA’s effort to take back funding that the Biden administration distributed last year to eight organizations that were chosen to administer grants from the Greenhouse Gas Reduction Fund from an account held by Citibank, which holds a financial agency agreement with the Treasury.

Zeldin has said that the FBI and Justice Department are also investigating.

The use of the FBI to investigate the fund has raised concerns with Democratic lawmakers who said the agencies have no grounds to probe Citibank or the grant recipients.

“The funding process followed a centuries-old framework that is set out transparently in a contract between Citibank and the Department of the Treasury and was announced publicly in April 2024," Democratic Senator Sheldon Whitehouse said in a letter to Attorney General Pam Bondi and FBI Director Kash Patel.

Whitehouse, who is the top Democrat on the Senate Environment Committee and on a Senate Judiciary Subcommittee, said the officials did not have a “true basis to interfere with these properly appropriated and obligated funds.”

The EPA said it would work to use the funds “with enhanced controls” within the law but did not say specifically what it would do with the money.

“EPA will be an exceptional steward of taxpayer dollars dedicated to our core mission of protecting human health and the environment, not a frivolous spender in the name of ‘climate equity,’” Zeldin said.

Congress appropriated the $20 billion through the 2022 Inflation Reduction Act under Democratic President Joe Biden. Under Trump, the EPA has sought to freeze funding related to climate change and environmental justice amid legal challenges.

Separately, the EPA announced in an internal memo on Tuesday that it will shutter the agency’s Office of Environmental Justice and Civil Rights, which focuses on minority and low-income communities that have been hard hit by air and water pollution, along with its 10 regional offices, as part of a broader reorganization of the agency.

The EPA had put staffers in that office on administrative leave last month.

“It needlessly endangers the health of our children, particularly in areas overburdened by pollution,” said Stephanie Reese, a director at the Moms Clean Air Force environmental group.