EPA Seeks Pause in Grants Case, Says Funds Could Be Lost (1)

The Trump administration asked a federal court on Tuesday for an emergency stay pending its appeal in a legal tussle over $20 billion in EPA grants, saying the recipients will quickly spend the money if they get their hands on it.

The filing is the latest move in an ongoing bid by President Donald Trump’s team to claw back money awarded to green banks by Congress under the Biden administration.

Should the US District Court for the District of Columbia give the green banks the injunctive relief they seek, the government would suffer irreparable injury by having to disburse $625 million—and potentially up to $14 billion—in taxpayer money to “external accounts that would be unrecoverable,” the Justice Department said in an emergency motion.

The green banks have allegedly expressed their intent to “thwart meaningful appellate review by immediately spending hundreds of millions in taxpayer funds that may not be recovered,” according to the filing.

In making that claim, DOJ said the green banks have already asked for $625 million in external transfers from Citibank and have sent letters instructing the bank to “take whatever steps are necessary to ensure that, following the Court’s decision, Citibank can immediately process all pending transactions.”

By contrast, “extending a moderate delay in accessing grant funds will not substantially harm” the grantees, the DOJ said. In any case, any harm the green banks suffer “does not outweigh the government’s interest in reobligating the funds under a reformed grant program or duty to act in the public interest.”

Moreover, the US Supreme Court on April 4 acknowledged in U.S. Dept. of Ed. v. California, a similar case, that the government “is unlikely to recover grant funds once they are disbursed,” according to DOJ’s motion. Courts have already started applying the Supreme Court’s direction in grant termination cases, DOJ said.

One of the plaintiff green banks, Climate United Fund, said in a statement that it “will not—and legally cannot—go on a multi-million dollar spending spree with federal funds for our own benefit.”

Rather, “we are in the business of making loans to communities, for communities—which is exactly what the federal government hired us to do,” Climate United said. “Insinuations that these investments are not in the public interest contradicts the very purpose of this program and our work: to invest in projects that improve lives for every American.”

The green banks earlier told the court that the Trump administration is adopting “a remarkable view of executive power” in trying to claw back the grant money. Courts must respect the decisions made by Congress concerning desirable public policy, the green banks said.

Judge Tanya S. Chutkan oversees the case and asked the groups to respond by Tuesday evening.

The case is Climate United Fund v. Citibank, D.D.C., No. 1:25-cv-00698, motion filed 4/15/25.