Top attorney warned in email that EPA's effort to halt climate grants has 'significant legal vulnerabilities'
An internal message retrieved by PMG reveals that a career lawyer has cautioned that the Trump administration's attempt to reclaim $20 billion in funds that have already been distributed may lead to the agency facing billions in damages.
TroibNews 
Attorneys in the Trump administration recognized they were treading on uncertain legal ground as they devised strategies to prevent eight nonprofit organizations from utilizing $20 billion in climate grants that had already been allocated during the Biden administration, according to internal emails acquired by PMG.
Efforts to halt this spending could potentially leave the Trump administration liable for billions in damages if a court later determines its actions were unlawful, one Environmental Protection Agency (EPA) lawyer cautioned in a series of emails sent last month – less than 48 hours prior to the decision by EPA Administrator Lee Zeldin to terminate the grants entirely.
Within the same email thread, government lawyers conceded that they were uncertain if the criminal and civil probes initiated by the Trump administration would reveal any evidence of the waste, fraud, or conflicts of interest that Zeldin has frequently criticized regarding the climate grants. Their immediate goal, as noted by a senior Justice Department attorney in one email, was to block the funds while the investigations unfolded.
Veteran EPA attorney Jim Payne expressed in an email to numerous staff members and political appointees that the government's strategy “is believed to have significant legal vulnerabilities.”
These previously undisclosed emails provide an insight into the administration's inner concerns as the EPA, DOJ, and Treasury engage in one of the most forceful confrontations aimed at undermining the clean energy and climate policies of President Biden.
The issue surrounding the $20 billion is particularly notable because the administration is attempting to retract funds that have already been disbursed – money that was awarded by Biden’s agencies and deposited into accounts for the recipients at Citibank prior to Trump taking office. EPA lawyers have argued in court that they can revoke the grants without needing to present specific evidence of misconduct by the eight nonprofits involved.
The U.S. Court of Appeals for the D.C. Circuit is on track to make a ruling as early as this week regarding whether the Trump administration can persist in freezing the funds, which were designated for solar power, energy efficiency upgrades, and other clean energy initiatives in lower-income communities. U.S. District Judge Tanya Chutkan has criticized the EPA’s management of the situation, stating that the agency “never proffered . . . adequate evidence” to substantiate its claims of misconduct.
Prior to this, the warning in the EPA lawyer's email regarding “significant” risks had already raised a flag for agency leaders about their approach, as per a legal expert who examined the emails for PMG.
“To me, this is a signal that they think this is probably a loser,” remarked Gary Jonesi, who retired after nearly four decades of enforcement work at the EPA under both Republican and Democratic administrations.
Avi Garbow, who previously served as the agency's general counsel in the Obama administration, concurred that the term “very lightly” would not be used lightly in such contexts.
“It is not unusual at all that for policy directives . . . there is some assessment by the Office of General Counsel that it presents some legal vulnerability,” he noted. “It is less normal, I think, to phrase it as having 'significant' legal vulnerabilities.”
Other legal experts reviewing the emails for PMG found it remarkable that they revealed the administration’s attempt to block the funding without first establishing clear evidence of misconduct. One email dated March 9 from Matthew Galeotti, a career official in the office of Deputy Attorney General Todd Blanche, detailed DOJ’s assessment after a day of interagency discussions.
“The short-term objective is to prevent disbursement of the grant funds, so that ongoing criminal and civil investigations into the program can proceed without risk that the funds will permanently disappear,” Galeotti explained.
This approach was deemed unusual by veteran EPA official Stan Meiburg.
“What I take from [DOJ’s] line is, they're still trying to find ways to claw back the money, and they want to give themselves as much time as possible to do fishing expeditions to find any evidence in criminal or civil investigations that might give them a plausible reason for arguing that there was fraud going on, and therefore they should do this,” offered Meiburg, who served for 37 years at the EPA before briefly returning as acting deputy EPA administrator under Obama. “And right now they haven't got one.”
In a statement issued Wednesday, the EPA reiterated several allegations it has made regarding the grants in recent months, which include "serious potential conflicts of interest," concerns about the recipients’ ability to manage the funds, statements from internal watchdogs highlighting oversight issues, and claims that the Biden administration made alterations to the grant agreements which limited the EPA's oversight — a claim disputed by the grant recipients.
“It’s telling that you cling to the narrative of ‘no evidence’ even as EPA has directly outlined evidence regarding serious concerns about self-dealing and conflicts of interest, unqualified grantees, and reduced agency oversight tied to the Greenhouse Gas Reduction Fund,” the agency stated. “These aren’t vague suspicions — they’re the foundation for ongoing DOJ and FBI and IG investigations, and the reason the fatally designed program was terminated.”
The EPA added that the emails obtained by PMG indicate government attorneys aiming to prevent grant recipients from “increasing their efforts to access and offload these tax dollars to third parties” once the Trump administration intensified its scrutiny of the program. Such withdrawals “would be certain to cause irreparable harm to the U. S. taxpayer amounting into the billions of dollars,” the agency emphasized.
Payne, serving as EPA’s acting general counsel, characterized the email discussions as standard procedure.
“On their face, the alleged emails you reference appear to involve privileged discussions and ordinary deliberations among government attorneys,” Payne stated. “Such an exchange of views is an important part of the government’s work, and an unauthorized disclosure would be highly inappropriate and have potential legal consequences.”
The Justice Department refrained from commenting on this matter, while the White House directed inquiries to the EPA and DOJ. The FBI deferred all questions to the DOJ, and the EPA's inspector general declined to comment on the ongoing investigations.
In the weeks following Zeldin's initial public criticisms of the $20 billion grant program on February 12, alleging that the Biden-era EPA had "parked" the funds at Citibank as part of a "scheme" to sidestep federal oversight, the agency and Treasury pressed Citibank to freeze the grant money. Concurrently, the DOJ and the FBI commenced a criminal probe, and the EPA's inspector general began reviewing the program at the leadership's request. However, the process faced challenges: in February, a top federal prosecutor resigned, expressing that there was insufficient evidence to justify launching a criminal investigation or freezing the Citibank accounts.
Under the terms of the grants, the EPA has the authority to terminate the awards under three conditions: if a recipient fails to spend the funds properly, if it misrepresents its eligibility for the grant, or if credible evidence of criminal activity exists.
One of the grantees, Climate United Fund, filed a lawsuit against the EPA over the funding freeze on March 8, with other affected groups preparing to pursue similar legal action. By the evening of March 9, Galeotti warned that time was of the essence: shortly after midnight, Citibank would have “no basis” to continue blocking the accounts under the previous requests made by the Trump administration.
DOJ suggested both Treasury and EPA send correspondence to Citibank that evening instructing it to maintain the freeze on the accounts — a move that DOJ acknowledged could lead to increased litigation.
"At some point, we will need to raise defenses, but the criminal and civil investigations may fill that out over the intervening period," Galeotti noted.
The email exchange included a mix of career and political employees, with others included as recipients. Emil Bove, a former Trump defense attorney now serving as the principal associate deputy attorney general, also contributed to the discussions and had previously advocated for a criminal inquiry into the climate grants. Blanche, another defense attorney who was sworn in as deputy attorney general just days prior, was also included in the emails.
After reviewing the communications, government watchdog executive Jillian Blanchard remarked that the officials seemed more focused on stopping the climate grants than on investigating specific evidence of waste, fraud, or abuse.
“It just seems to me that this is end-justifies-the-means logic, that there's no evidence that's being cited,” asserted Blanchard, vice president of climate change and environmental justice at Lawyers for Good Government, an organization critical of the grant terminations. “It's just, ‘how do we protect ourselves in this moment, while we terminate grants without evidence?’”
As the Trump administration finalized its plan to instruct Citibank to continue freezing the funds, Payne expressed some reservations. He alerted that grant recipients could seek monetary damages in the U.S. Court of Federal Claims, which holds exclusive jurisdiction over financial claims made against the federal government. He requested that DOJ evaluate the likelihood of the government prevailing in such legal challenges, "to help ensure EPA senior leadership is well informed since there are potential multi-billion dollar damage claims."
Yaakov Roth, acting assistant attorney general for civil matters, responded that DOJ could not assess the situation until the investigations had run their course.
"It depends on what the investigations uncover in terms of criminal conduct or other improprieties. It also depends on whether EPA ultimately terminates the grants," Roth communicated to Payne. "All of that will bear on our defenses and rights."
Should the courts find that the withholding of funds was unlawful, Roth warned, the agency could be liable for those funds along with potential interest or related relief.
Interviewed afterward, Blanchard found it “wild” that the Trump administration would recognize — yet seemingly disregard — the risk of incurring liability for damages while Zeldin consistently claims that the grants were terminated to safeguard taxpayer money.
“It isn't about the money,” she argued. “They're doing it, I believe, to be able to say they stopped this program, they stopped what the Biden administration wanted to do. That's the main goal, to be able to say they stopped this.”
Garbow expressed that he would have been cautious regarding such pronounced risk.
“I cannot envision a scenario, had I been the general counsel, where my office had determined there were significant, multibillion-dollar damage claims, and I had not received substantial reassurance from the Justice Department about the merits of our potential defenses — that certainly, in my experience, would have warranted a conversation directly with the administrator to ensure that he or she was comfortable proceeding this way,” he remarked.
It's uncertain how extensively Zeldin was involved in the discussions the night of the email exchanges. There were only 44 minutes between Payne sharing the draft order to freeze the funds and Zeldin's chief of staff, Eric Amidon, forwarding it to Citibank.
The EPA's plan to eliminate the climate grants has already met legal challenges. Last week, Chutkan — who was nominated by Barack Obama and previously drew Trump’s ire while overseeing his now-dismissed election conspiracy case — ruled that the EPA’s March 11 termination was unlawful, contravened the Constitution, and failed to comply with the agency’s own protocols.
The EPA’s main line of defense asserts that the grant terminations constitute a breach of contract, which, under the law, must be addressed in the Court of Federal Claims rather than in Chutkan’s court. The recipients could face a year or longer for their case to be heard while lacking access to vital funding, and they have warned that without these funds, layoffs and shutdowns could occur.
Chutkan dismissed EPA’s interpretation of the law, stating that this isn’t a mere contract dispute and that “the government is not just another contracting party.”
As for the merits, the Justice Department conceded that the government did not revoke the grants based on any actions taken by the recipients. “EPA did not terminate for Plaintiffs’ noncompliance,” the agency stated in a brief filed in late March.
Chutkan’s order to reinstate the funding has been temporarily stayed while the EPA appeals to the D.C. Circuit Court of Appeals. Currently, $625 million in requests from the recipients are pending, primarily allocated for clean energy projects, housing, and community lending.
Even if the EPA succeeds in transferring the matter to the Court of Federal Claims, it could still face potential liability for the entire $20 billion, as Payne noted in another email from March 9.
In that communication, the EPA attorney shared a draft of a directive that Amidon would send to Citibank instructing it to maintain the funding freeze. However, Payne reiterated that the strategy “is believed to have significant legal vulnerabilities including for potential future substantial monetary damage claims before the Court of Federal Claims.”
Adding the word “significant” serves as a clear indication aimed at other attorneys, Jonesi told PMG after reading the emails.
“When you've got Trump's criminal defense lawyers, now senior people at the Justice Department, on this email chain, you choose your words carefully, and you don't want to lose credibility by overstating the case,” he noted, adding that he is now the executive director of CREEDemocracy, an organization he founded this year to advance clean energy development and scrutinize Trump’s policies.
At 12:28 a.m. on Monday, March 10, Amidon sent the order to Citibank to continue freezing the funds, according to court documents, with only minor changes made to Payne's draft language.
Bove, the principal associate deputy attorney general, expressed satisfaction with this result.
"Grateful to all involved for the coordination on this," he wrote at 1:41 a.m. "Thanks very much."
The agency had contemplated further action to not only freeze but terminate the grants, but that decision “is not being effectuated at this time,” Roth stated on March 9. Amidon's order to Citibank indicated that the agency would hold off on changing the program until it received answers to oversight questions submitted to the grant recipients, which were due by March 28.
Instead, on March 11, the EPA informed Climate United and the other recipients that Zeldin had terminated their grants. The email records do not clarify the reasoning behind the sudden shift in strategy.
Myron Ebell, a longstanding opponent of climate spending and regulation who led Trump’s 2017 EPA transition team, voiced his support for the administration's effort to aggressively cancel such funding as the $20 billion Biden program and stated he does not fear a court reversing the grant terminations.
"Then we’ll be where we are now. I don’t see that that’s a loss," he stated. "We’ll go back to the status quo, and if the administration wants to end these various green grant programs, they will have to go to Congress and say ‘Well, we tried to do it.'
Anna Muller for TROIB News
Efforts to halt this spending could potentially leave the Trump administration liable for billions in damages if a court later determines its actions were unlawful, one Environmental Protection Agency (EPA) lawyer cautioned in a series of emails sent last month – less than 48 hours prior to the decision by EPA Administrator Lee Zeldin to terminate the grants entirely.
Within the same email thread, government lawyers conceded that they were uncertain if the criminal and civil probes initiated by the Trump administration would reveal any evidence of the waste, fraud, or conflicts of interest that Zeldin has frequently criticized regarding the climate grants. Their immediate goal, as noted by a senior Justice Department attorney in one email, was to block the funds while the investigations unfolded.
Veteran EPA attorney Jim Payne expressed in an email to numerous staff members and political appointees that the government's strategy “is believed to have significant legal vulnerabilities.”
These previously undisclosed emails provide an insight into the administration's inner concerns as the EPA, DOJ, and Treasury engage in one of the most forceful confrontations aimed at undermining the clean energy and climate policies of President Biden.
The issue surrounding the $20 billion is particularly notable because the administration is attempting to retract funds that have already been disbursed – money that was awarded by Biden’s agencies and deposited into accounts for the recipients at Citibank prior to Trump taking office. EPA lawyers have argued in court that they can revoke the grants without needing to present specific evidence of misconduct by the eight nonprofits involved.
The U.S. Court of Appeals for the D.C. Circuit is on track to make a ruling as early as this week regarding whether the Trump administration can persist in freezing the funds, which were designated for solar power, energy efficiency upgrades, and other clean energy initiatives in lower-income communities. U.S. District Judge Tanya Chutkan has criticized the EPA’s management of the situation, stating that the agency “never proffered . . . adequate evidence” to substantiate its claims of misconduct.
Prior to this, the warning in the EPA lawyer's email regarding “significant” risks had already raised a flag for agency leaders about their approach, as per a legal expert who examined the emails for PMG.
“To me, this is a signal that they think this is probably a loser,” remarked Gary Jonesi, who retired after nearly four decades of enforcement work at the EPA under both Republican and Democratic administrations.
Avi Garbow, who previously served as the agency's general counsel in the Obama administration, concurred that the term “very lightly” would not be used lightly in such contexts.
“It is not unusual at all that for policy directives . . . there is some assessment by the Office of General Counsel that it presents some legal vulnerability,” he noted. “It is less normal, I think, to phrase it as having 'significant' legal vulnerabilities.”
Other legal experts reviewing the emails for PMG found it remarkable that they revealed the administration’s attempt to block the funding without first establishing clear evidence of misconduct. One email dated March 9 from Matthew Galeotti, a career official in the office of Deputy Attorney General Todd Blanche, detailed DOJ’s assessment after a day of interagency discussions.
“The short-term objective is to prevent disbursement of the grant funds, so that ongoing criminal and civil investigations into the program can proceed without risk that the funds will permanently disappear,” Galeotti explained.
This approach was deemed unusual by veteran EPA official Stan Meiburg.
“What I take from [DOJ’s] line is, they're still trying to find ways to claw back the money, and they want to give themselves as much time as possible to do fishing expeditions to find any evidence in criminal or civil investigations that might give them a plausible reason for arguing that there was fraud going on, and therefore they should do this,” offered Meiburg, who served for 37 years at the EPA before briefly returning as acting deputy EPA administrator under Obama. “And right now they haven't got one.”
In a statement issued Wednesday, the EPA reiterated several allegations it has made regarding the grants in recent months, which include "serious potential conflicts of interest," concerns about the recipients’ ability to manage the funds, statements from internal watchdogs highlighting oversight issues, and claims that the Biden administration made alterations to the grant agreements which limited the EPA's oversight — a claim disputed by the grant recipients.
“It’s telling that you cling to the narrative of ‘no evidence’ even as EPA has directly outlined evidence regarding serious concerns about self-dealing and conflicts of interest, unqualified grantees, and reduced agency oversight tied to the Greenhouse Gas Reduction Fund,” the agency stated. “These aren’t vague suspicions — they’re the foundation for ongoing DOJ and FBI and IG investigations, and the reason the fatally designed program was terminated.”
The EPA added that the emails obtained by PMG indicate government attorneys aiming to prevent grant recipients from “increasing their efforts to access and offload these tax dollars to third parties” once the Trump administration intensified its scrutiny of the program. Such withdrawals “would be certain to cause irreparable harm to the U. S. taxpayer amounting into the billions of dollars,” the agency emphasized.
Payne, serving as EPA’s acting general counsel, characterized the email discussions as standard procedure.
“On their face, the alleged emails you reference appear to involve privileged discussions and ordinary deliberations among government attorneys,” Payne stated. “Such an exchange of views is an important part of the government’s work, and an unauthorized disclosure would be highly inappropriate and have potential legal consequences.”
The Justice Department refrained from commenting on this matter, while the White House directed inquiries to the EPA and DOJ. The FBI deferred all questions to the DOJ, and the EPA's inspector general declined to comment on the ongoing investigations.
In the weeks following Zeldin's initial public criticisms of the $20 billion grant program on February 12, alleging that the Biden-era EPA had "parked" the funds at Citibank as part of a "scheme" to sidestep federal oversight, the agency and Treasury pressed Citibank to freeze the grant money. Concurrently, the DOJ and the FBI commenced a criminal probe, and the EPA's inspector general began reviewing the program at the leadership's request. However, the process faced challenges: in February, a top federal prosecutor resigned, expressing that there was insufficient evidence to justify launching a criminal investigation or freezing the Citibank accounts.
Under the terms of the grants, the EPA has the authority to terminate the awards under three conditions: if a recipient fails to spend the funds properly, if it misrepresents its eligibility for the grant, or if credible evidence of criminal activity exists.
One of the grantees, Climate United Fund, filed a lawsuit against the EPA over the funding freeze on March 8, with other affected groups preparing to pursue similar legal action. By the evening of March 9, Galeotti warned that time was of the essence: shortly after midnight, Citibank would have “no basis” to continue blocking the accounts under the previous requests made by the Trump administration.
DOJ suggested both Treasury and EPA send correspondence to Citibank that evening instructing it to maintain the freeze on the accounts — a move that DOJ acknowledged could lead to increased litigation.
"At some point, we will need to raise defenses, but the criminal and civil investigations may fill that out over the intervening period," Galeotti noted.
The email exchange included a mix of career and political employees, with others included as recipients. Emil Bove, a former Trump defense attorney now serving as the principal associate deputy attorney general, also contributed to the discussions and had previously advocated for a criminal inquiry into the climate grants. Blanche, another defense attorney who was sworn in as deputy attorney general just days prior, was also included in the emails.
After reviewing the communications, government watchdog executive Jillian Blanchard remarked that the officials seemed more focused on stopping the climate grants than on investigating specific evidence of waste, fraud, or abuse.
“It just seems to me that this is end-justifies-the-means logic, that there's no evidence that's being cited,” asserted Blanchard, vice president of climate change and environmental justice at Lawyers for Good Government, an organization critical of the grant terminations. “It's just, ‘how do we protect ourselves in this moment, while we terminate grants without evidence?’”
As the Trump administration finalized its plan to instruct Citibank to continue freezing the funds, Payne expressed some reservations. He alerted that grant recipients could seek monetary damages in the U.S. Court of Federal Claims, which holds exclusive jurisdiction over financial claims made against the federal government. He requested that DOJ evaluate the likelihood of the government prevailing in such legal challenges, "to help ensure EPA senior leadership is well informed since there are potential multi-billion dollar damage claims."
Yaakov Roth, acting assistant attorney general for civil matters, responded that DOJ could not assess the situation until the investigations had run their course.
"It depends on what the investigations uncover in terms of criminal conduct or other improprieties. It also depends on whether EPA ultimately terminates the grants," Roth communicated to Payne. "All of that will bear on our defenses and rights."
Should the courts find that the withholding of funds was unlawful, Roth warned, the agency could be liable for those funds along with potential interest or related relief.
Interviewed afterward, Blanchard found it “wild” that the Trump administration would recognize — yet seemingly disregard — the risk of incurring liability for damages while Zeldin consistently claims that the grants were terminated to safeguard taxpayer money.
“It isn't about the money,” she argued. “They're doing it, I believe, to be able to say they stopped this program, they stopped what the Biden administration wanted to do. That's the main goal, to be able to say they stopped this.”
Garbow expressed that he would have been cautious regarding such pronounced risk.
“I cannot envision a scenario, had I been the general counsel, where my office had determined there were significant, multibillion-dollar damage claims, and I had not received substantial reassurance from the Justice Department about the merits of our potential defenses — that certainly, in my experience, would have warranted a conversation directly with the administrator to ensure that he or she was comfortable proceeding this way,” he remarked.
It's uncertain how extensively Zeldin was involved in the discussions the night of the email exchanges. There were only 44 minutes between Payne sharing the draft order to freeze the funds and Zeldin's chief of staff, Eric Amidon, forwarding it to Citibank.
The EPA's plan to eliminate the climate grants has already met legal challenges. Last week, Chutkan — who was nominated by Barack Obama and previously drew Trump’s ire while overseeing his now-dismissed election conspiracy case — ruled that the EPA’s March 11 termination was unlawful, contravened the Constitution, and failed to comply with the agency’s own protocols.
The EPA’s main line of defense asserts that the grant terminations constitute a breach of contract, which, under the law, must be addressed in the Court of Federal Claims rather than in Chutkan’s court. The recipients could face a year or longer for their case to be heard while lacking access to vital funding, and they have warned that without these funds, layoffs and shutdowns could occur.
Chutkan dismissed EPA’s interpretation of the law, stating that this isn’t a mere contract dispute and that “the government is not just another contracting party.”
As for the merits, the Justice Department conceded that the government did not revoke the grants based on any actions taken by the recipients. “EPA did not terminate for Plaintiffs’ noncompliance,” the agency stated in a brief filed in late March.
Chutkan’s order to reinstate the funding has been temporarily stayed while the EPA appeals to the D.C. Circuit Court of Appeals. Currently, $625 million in requests from the recipients are pending, primarily allocated for clean energy projects, housing, and community lending.
Even if the EPA succeeds in transferring the matter to the Court of Federal Claims, it could still face potential liability for the entire $20 billion, as Payne noted in another email from March 9.
In that communication, the EPA attorney shared a draft of a directive that Amidon would send to Citibank instructing it to maintain the funding freeze. However, Payne reiterated that the strategy “is believed to have significant legal vulnerabilities including for potential future substantial monetary damage claims before the Court of Federal Claims.”
Adding the word “significant” serves as a clear indication aimed at other attorneys, Jonesi told PMG after reading the emails.
“When you've got Trump's criminal defense lawyers, now senior people at the Justice Department, on this email chain, you choose your words carefully, and you don't want to lose credibility by overstating the case,” he noted, adding that he is now the executive director of CREEDemocracy, an organization he founded this year to advance clean energy development and scrutinize Trump’s policies.
At 12:28 a.m. on Monday, March 10, Amidon sent the order to Citibank to continue freezing the funds, according to court documents, with only minor changes made to Payne's draft language.
Bove, the principal associate deputy attorney general, expressed satisfaction with this result.
"Grateful to all involved for the coordination on this," he wrote at 1:41 a.m. "Thanks very much."
The agency had contemplated further action to not only freeze but terminate the grants, but that decision “is not being effectuated at this time,” Roth stated on March 9. Amidon's order to Citibank indicated that the agency would hold off on changing the program until it received answers to oversight questions submitted to the grant recipients, which were due by March 28.
Instead, on March 11, the EPA informed Climate United and the other recipients that Zeldin had terminated their grants. The email records do not clarify the reasoning behind the sudden shift in strategy.
Myron Ebell, a longstanding opponent of climate spending and regulation who led Trump’s 2017 EPA transition team, voiced his support for the administration's effort to aggressively cancel such funding as the $20 billion Biden program and stated he does not fear a court reversing the grant terminations.
"Then we’ll be where we are now. I don’t see that that’s a loss," he stated. "We’ll go back to the status quo, and if the administration wants to end these various green grant programs, they will have to go to Congress and say ‘Well, we tried to do it.'
Anna Muller for TROIB News
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