En Banc DC Circuit Reinstates Funding Of The Most Corrupt Program Ever Enacted
/I recognize that there could be many contenders for the title of the “Most Corrupt Program Ever Enacted.” However, I challenge any reader, or anyone else for that matter, to name any program in the vast federal handout universe more corrupt that the so-called Greenhouse Gas Reduction Fund that was created by the Orwellian-named Inflation Reduction Act of 2022, § 60103, and codified at 42 U.S.C. § 7434.
If you have somehow forgotten about this program, it is the one that was the subject of a famous Project Veritas recording, made during the interim between President Trump’s second election in November 2024 and his inauguration in January 2025. In the December 2024 video, an EPA “special advisor” named Brent Efron described a rush in the Biden EPA’s last days to commit huge amounts of funds to friendly non-profits in a way to completely avoid oversight and to make them difficult for the incoming Trump people to claw back. Efron characterized what was going on as “throwing gold bars off the Titanic.”
Upon entering office, the Trump people set out to and then did identify the funds in question — about $20 billion — and promptly rescinded the grants. Plaintiffs went to the D.C. District Court, and got an injunction mandating disbursement of the funds. Congress then repealed the grants in the One Big Beautiful Bill of July 2025. In September 2025 a three-judge panel of the D.C. Circuit upheld the rescission of the grants, and held that the only remedy of the grant recipients would be to seek contractual damages in the Court of Claims. A rare victory for the taxpayers? Not so fast. The plaintiff grant recipients asked for en banc review from the entire D.C. Circuit, and on August 4 the full D.C. Circuit mostly re-instated the original District Court injunction mandating distribution of the funds.
The vote of the judges in the D.C. Circuit is almost completely along party lines, and illustrates the extent to which the Democratic-appointed judges will uphold anything, no matter how corrupt, to support their team.
From the beginning, the label of “Greenhouse Gas Reduction Fund” in this statute was the thinnest of cover stories to justify vast handouts to Democratic Party insiders with little to no knowledge, ability, or experience in actually reducing “greenhouse gases.” An EPA page on this subject reveals the extent to which the program was no more than an excuse to hand out billions to party insiders in the waning days of the lame duck administration. The three biggest grant recipients in question, and the amounts of their grants, were: Climate United Fund ($6.97 billion), Coalition for Green Capital ($5.0 billion), and Power Forward Communities ($2.0 billion). Here is some background (from the EPA page) on these three entities:
“The Coalition for Green Capital had only expended $1.42 million in 2023 before receiving a $5 billion award from EPA.”
“Power Forward Communities had reported a total of $100 for both “total revenue” and “net assets” in its 2023 tax return – the year before receiving a $2 billion grant from EPA.”
Climate United Fund’s CEO, Chief Strategy Officer, and multiple board members were high ranking administration officials during the Obama and/or Biden administrations.
Coalition for Green Capital’s CEO had been a senior advisor at the Department of Energy during the Obama administration, before becoming New York Governor Andrew Cuomo’s “Energy Czar.” A senior Biden administration energy advisor left to join the Coalition for Green Energy’s Board as it was applying for its grant.
Power Forward Communities’ CEO had served as CEO of Fannie Mae during the Obama administration. Multiple other senior executives had also been high ranking officials in the Obama administration.
And there’s plenty more where that comes from.
The initial D.C. Circuit panel decision, written by Judge Naomi Rao, outlines the machinations that the Biden people went through to try to make it as difficult as possible for the incoming Trump administration to claw back the money from the Democrat insiders. Remember as you are reading this that this takes place in December 2024 and January 2025, after Trump has been elected:
The grant agreements have an unusual structure. Typically, grant funds are held by the U.S. Treasury and disbursed incrementally as grantees use the funds for program purposes. EPA structured these grants with a middleman that would hold the funds as a “financial agent” of the United States. According to EPA, this was the first time the federal government used a financial agent, as opposed to Treasury, to carry out this kind of grant program. Treasury entered a Financial Agency Agreement (“FAA”) with Citibank. . . .
The month before President Trump’s inauguration, EPA modified the grant agreements—with no apparent consideration from the grantees—to make it more difficult for the government to terminate the grants. The week before the inauguration, EPA amended the ACAs to require Citibank to “continue to disburse funds” to the grantees, even if the government exercised its right of exclusive control, if the funds are “associated with financial obligations ‘properly incurred’” before the government exercised its right.
The Biden people had tried to make it so that the money would be gone and unrecoverable — like gold bars at the bottom of the ocean — by the time the Trump people figured out what was going on. But new EPA Administrator Zeldin very promptly told Citibank to freeze the money, and then Congress repealed the grants in the OBBB in July 2025.
So what is even the argument that the money must be disbursed at this point? The D.C. Circuit’s en banc ruling is a one-page summary order that does not provide any reasoning. The only place we can look for that is the dissenting opinion from Judge Pillard from the panel decision. Remember that this was issued in September 2025, two months after the OBBB had repealed the Greenhouse Gas Reduction Fund. Here are some quotes from Judge Pillard:
Three years ago, Congress passed the Inflation Reduction Act. One of the law’s signature provisions directs the Environmental Protection Agency to distribute $20 billion in grants for investment in projects to develop clean energy infrastructure and manufacturing capacity. Congress structured the Greenhouse Gas Reduction Fund to provide jobs while reducing greenhouse gas emissions and improving air quality, especially in low-income and underinvested communities. EPA distributed the grant money by the fall of 2024, as Congress required. . . . Plaintiffs challenge EPA’s action to gut the Greenhouse Gas Reduction Fund as contrary to the Constitution’s separation of powers. Fundamental to our “constitutional system of separation of powers” is the “settled, bedrock principle[]” that neither the President nor his “subordinate executive agencies” may “decline to follow a statutory mandate or prohibition simply because of policy objections.”. . . Yet that is just what EPA decided to do and has begun to effectuate here. The record strongly supports the district court’s determination that EPA has frozen and attempted to repossess billions of dollars’ worth of lawfully spent money for no substantiated reason other than disagreements with Congress’s policy determination—grounds that are entirely inapposite and inadequate, and that the government does not defend here.
Well, it seems rather significant to me that (1) by the time of this decision Congress had actually repealed this funding, and (2) at the time of the decision the money had not been “lawfully spent” by the grantees (who were basically start-ups with no ability to run through these billions in a matter of months), but rather parked at Citibank in a highly unusual arrangement to try to evade all normal oversight, let alone a change of policy by a new administration.
I noted above that the vote of the judges was almost entirely along party lines. The exception was Chief Judge Srinivasan, who joined the three Republican appointees in this paragraph:
Four judges (Chief Judge Srinivasan and Judges Katsas, Rao, and Walker) vote to vacate paragraph two of the preliminary injunction because, among other things, Plaintiffs have not demonstrated that a preliminary injunction against effectuating the March 11, 2025, Notices of Termination remains warranted after the OBBBA’s repeal of Section 60103 of the IRA: Under those judges’ understanding of the repeal, EPA Defendants likely could now take actions to terminate Plaintiffs’ grants without violating Section 60103 of the IRA.
Judge Srinivasan’s name was often mentioned as a potential Supreme Court nominee for President Biden, but of course when he got the chance Biden appointed Ketanji Brown Jackson.