*

Biden-era program aimed at funding greenhouse gas

reduction

projects

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Judge demands evidence of waste, fraud and abuse

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Advocacy group sued to block move

(Adds details, quotes from judge)

By Valerie Volcovici and Andrew Goudsward

WASHINGTON, March 12 (Reuters) -

A U.S. judge on Wednesday pressed President Donald Trump's

administration for evidence of fraud, waste and abuse in a $20

billion climate funding program that the administration has

moved to terminate.

U.S. District Judge Tanya Chutkan said she would order

the administration to file a sworn statement by Monday detailing

the evidence used to justify ending the grant, which aimed to

fund greenhouse gas reduction projects.

"You can't even tell me what the evidence of malfeasance

is," Chutkan told a lawyer for the Trump administration during a

hearing in U.S. District Court in Washington.

Climate advocates and Democrats say the move illegally

seizes money allocated for clean energy and transportation for

disadvantaged communities.

Environmental Protection Agency Administrator Lee Zeldin had

publicized his campaign to claw back money from the Greenhouse

Gas Reduction Fund, which Congress appropriated under the Biden

administration to kick-start projects aimed at curbing

pollution.

In a statement late on Tuesday, the EPA said it had clawed

back the funds, saying the program did not align with the

agency's priorities, citing concerns with potential fraud, waste

and abuse, although it gave no details or evidence for the

allegations.

Chutkan's demand for evidence came as part of a lawsuit

brought by the Climate United Fund advocacy group, which sued

the EPA and Citigroup's ( C/PN ) Citibank for withholding the

funds.

The group is seeking an emergency order temporarily

requiring Citibank to disburse funds at its request, warning

that it will run out of money as soon as Friday.

A lawyer for the Trump administration argued the court

no longer had jurisdiction over the dispute because the grant

had already been terminated.

The move is the latest development in the EPA's effort to

take back funding that the Biden administration distributed last

year to eight organizations that were chosen to administer

grants from the Greenhouse Gas Reduction Fund from an account

held by Citibank, which holds a financial agency agreement with

the Treasury.

Zeldin has said that the FBI and Justice Department are also

investigating.

The use of the FBI to investigate the fund has raised

concerns with Democratic lawmakers who said the agencies have no

grounds to probe Citibank or the grant recipients.

"The funding process followed a centuries-old framework that

is set out transparently in a contract between Citibank and the

Department of the Treasury and was announced publicly in April

2024," Democratic Senator Sheldon Whitehouse said in a letter to

Attorney General Pam Bondi and FBI Director Kash Patel.

Whitehouse, who is the top Democrat on the Senate

Environment Committee and on a Senate Judiciary Subcommittee,

said the officials did not have a "true basis to interfere with

these properly appropriated and obligated funds."

The EPA said it would work to use the funds "with enhanced

controls" within the law but did not say specifically what it

would do with the money.

"EPA will be an exceptional steward of taxpayer dollars

dedicated to our core mission of protecting human health and the

environment, not a frivolous spender in the name of 'climate

equity,'" Zeldin said.

Congress appropriated the $20 billion through the 2022

Inflation Reduction Act under Democratic President Joe Biden.

Under Trump, the EPA has sought to freeze funding related to

climate change and environmental justice amid legal challenges.

Separately, the EPA announced in an internal memo on Tuesday

that it will shutter the agency's Office of Environmental

Justice and Civil Rights, which focuses on minority and

low-income communities that have been hard hit by air and water

pollution, along with its 10 regional offices, as part of a

broader reorganization of the agency.

The EPA had put staffers in that office on

administrative leave last month.

"It needlessly endangers the health of our children,

particularly in areas overburdened by pollution," said Stephanie

Reese, a director at the Moms Clean Air Force environmental

group.