A federal judge ruled against the Trump administration in the case that alleged fraud in a Biden-era clean energy program, unfreezing roughly $20 billion in funding meant to support projects like new solar energy arrays and efficiency upgrades for small businesses.
Judge Tanya Chutkan on Tuesday ruled in favor of the eight nonprofits that sued Citibank and the Trump administration, finding that the Environmental Protection Agency unlawfully terminated the program. Chutkan ordered the congressionally appropriated funds to be unfrozen at 2 p.m. Thursday and distributed to the nonprofits they were originally intended for.
The Trump administration said it will appeal.
“The DC District Court does not have jurisdiction to reinstate the $20 billion Biden-Harris ‘Gold Bar’ scheme, which is further amplified by a recent Supreme Court decision,” a spokesperson said in an email. “These grants are terminated, and the funds belong to the U.S. taxpayer. We couldn’t be more confident in the merits of our appeal and will take every possible step to protect hard-earned taxpayer dollars.”
Citibank — which holds several nonprofits’ funds — said in an April 2 hearing that it would unfreeze the accounts if Chutkan issued such an order.
During that hearing, Chutkan pressed DOJ attorneys on whether the federal government had found any evidence of widespread waste, fraud, or abuse in the program, as EPA Administrator Lee Zeldin has alleged. DOJ attorney Marc Sacks said the government had not gathered new evidence to that effect.
“Here we are, weeks in, and you’re still unable to proffer me any evidence with regard to malfeasance,” Chutkan told DOJ attorneys at the hearing, adding that the government had shifted its reasoning for cutting off grants to the eight large nonprofits — from citing evidence of wrongdoing to citing a change in administration policy.
Chutkan also scrutinized the EPA’s procedure for abruptly terminating the $20 billion grant program in March, specifically its failure to give awardees advance notice before announcing the cancellation.
“If EPA had concerns about oversight and the funding, the way to do it is either get a court order — which you didn’t do — or go through the procedures for termination,” Chutkan told DOJ attorneys. “You haven’t done that. You’re putting the cart before the horse.”
The EPA could still shut down the program in the future, the judge noted, as long as it follows proper procedures and gives nonprofits advance notice of its plans.
Sparked by a video from the right-wing activist group Project Veritas, Zeldin has adopted a theory that the Biden administration unlawfully awarded $20 billion to progressive ventures. In the video, a Biden-era EPA employee — filmed without their knowledge — compared the rush to get Congress’s climate law funding out the door before Trump took office to “tossing gold bars off the Titanic.”
“It’s a clear-cut case of waste and abuse,” Zeldin told Fox News in February. “The entire scheme, in my opinion, is criminal. We found the gold bars; we want them back.”
As CNN has reported, the congressionally appropriated funds come from a 2022 law — the Inflation Reduction Act. The money is intended to be distributed to small, nonprofit lenders that focus on energy efficiency and clean energy projects — several of which are in Republican-led states, including Missouri, Indiana, Utah, Ohio, Georgia and North Carolina.
Projects awaiting funding include initiatives to set up solar power for churches and help small independent grocery stores upgrade aging refrigeration systems — providing cost savings for the businesses as well as their customers.
This story has been updated with additional information.
