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Three Unanswered Questions About Biden EPA’s Massive Green ‘Slush Fund’

As Republican lawmakers prepare to grill a senior Environmental Protection Agency (EPA) official about one of President Joe Biden’s massive green grantmaking programs, several questions about the program’s structure and potential beneficiaries remain unanswered.

The Environmental Protection Agency (EPA) is sitting on a $27 billion fund known as the Greenhouse Gas Reduction Fund (GGRF), a program established by the Inflation Reduction Act (IRA), Biden’s landmark climate bill. The House Energy and Commerce Committee is holding an oversight hearing on the program featuring Senior Advisor to the EPA Administrator Zealan Hoover on Tuesday in Washington, D.C., with Republican lawmakers describing the program as possibly spawning “the next big government boondoggle.”

The GGRF intends “to mobilize financing and private capital to address the climate crisis” using several subprograms, according to the EPA. The program’s expeditious timeline, as well as the connections that several of those groups share to the administration and the broader Democratic party apparatus, have attracted the scrutiny of government watchdog groups and elected Republicans alike in recent months.

How is the EPA ensuring that political connections do not interfere with selecting grantees?

Up to $14 billion of GGRF cash could go to so-called “green banks,” or financial institutions that provide financing specifically for climate-related investments, according to the EPA. Three of the five “green bank” consortiums reportedly on the shortlist to potentially receive multi-billion dollar payouts from the GGRF have considerable ties to the Biden administration or the wider Democratic Party and its allies. The coalitions are variously composed of environmental groups, nonprofits and smaller “green banks” that would distribute the awarded funds to projects they deem worthy of the material support.

“Many prospective recipients and sub-recipients are chock full of political operatives as well as individuals and organizations with ties to the current administration and its Democratic predecessors,” Michael Chamberlain, the executive director of Protect the Public’s Trust, a watchdog organization that has closely monitored the GGRF, told the DCNF. “This raises serious questions about the likelihood of the GGRF being used to advance partisan interests or reward former political appointees and those who helped elect the President or create the program.”

For example, the board of directors for the Coalition for Green Capital — one of the groups reportedly in contention for a major payday — includes David Hayes, a senior fellow for the Natural Resources Defense Council (NRDC) and formerly a climate adviser for Biden; Cecilia Martinez, who is now the Bezos Earth Fund’s chief of environmental and climate justice after a stint in the Biden White House Council on Environmental Quality; and Julie Greene Collier, chief of staff for the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO).

The committee could choose to dig into these connections and call on Hoover to provide a detailed description of internal EPA safeguards to ensure a competitive grantmaking process on Tuesday, as well as whether the agency is concerned about potential appearances of ethical impropriety or political patronage with its award decisions.

Why did the agency meet with major green groups about the program in November 2022?

The EPA met with several organizations connected to officials in the agency and the wider administration behind closed doors to discuss the fund in November 2022, about 11 months before the application window closed in October 2023. The meeting served as a chance for groups like the NRDC and the Center for American Progress to “provide early feedback” and “ask clarifying questions” about the GGRF process.

“Holding a chummy meeting with special interest organizations with deep connections to political leadership isn’t a good look,” Chamberlain said at the time.

Protect the Public’s Trust described the meeting as “highly irregular” back in September 2023, and Republican lawmakers could test his theory by asking Hoover to explain why this meeting was held, what specific issues were discussed and whether it is standard EPA practice to meet with activist organizations about major programs like the GGRF behind closed doors before the application window has closed.

How is EPA ensuring due diligence while also rushing to get funds out by September 2024?

The agency is endeavoring to shell out the bulk of the GGRF money by September 2024 per the terms of the IRA, but elected Republicans have suggested that this timeline significantly raises the risks of inadequate oversight. Watchdog groups that have previously raised the alarm on the program concur.

“Haste really does make waste, as we should have learned from the government’s COVID response. When federal programs are fast tracked at the expense of appropriate oversight, they’re vulnerable to waste, fraud, and abuse,” Pete McGinnis, the spokesman for the Functional Government Initiative, told the DCNF. “The Greenhouse Gas Reduction Fund sure looks like a taxpayer-financed $27 billion slush fund for Biden administration insiders pushing unproven technologies.”

Other similar government programs designed to boost green energy development with taxpayer-funded cash infusions have also shelled out money with a sense of urgency, leading to potential lapses in the due diligence process. the Department of Energy’s (DOE) Loan Programs Office (LPO), one such program reportedly trying to move funds quickly, agreed to provide one fledgling company a $375 million loan package while it was allegedly defrauding its investors, and another $3 billion package to another company that reportedly exploited elderly customers by having them sign long-term, expensive solar panel installation contracts.

Given the relatively quick timeline and the fact that GGRF grantees may serve as functional grantmakers outside of typical agency controls, Republicans on the House Energy and Commerce Committee could press Hoover for detailed plans that demonstrate the agency is prepared to give out the money in a way that appropriately mitigates the inherent risks.

“While we are heartened to see the GGRF on the radar of Congressional overseers, we are equally disturbed about the reasons it has come to their attention. Members of the committee have expressed similar concerns as ours about the tremendous potential for abuse, conflicts, and cronyism inherent in this massive program,” Chamberlain told the DCNF. “The more details that emerge about the $27 billion GGRF, the more disturbed we become of the possibility this could turn out to be a colossal Greendoggle, or worse.”

For its part, the EPA has expressed to the DCNF that it is administering the program by the book.

“All applications submitted to the Greenhouse Gas Reduction Fund competitions are being put through a rigorous evaluation and selection process in line with the high standards of EPA’s Competition Policy, which ensures that the competitive process for EPA funds remains fair, impartial and free of undue influence,” an EPA spokesperson previously told the DCNF.

There are several key questions about the program that remain unanswered, and the House Energy and Commerce Committee has a chance to address the underlying risk factors when they convene Tuesday morning on Capitol Hill to hold a hearing examining the program.

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Nick Pope

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Nick Pope

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