EPA is pressing grant recipients of a Biden-era environmental justice program to take steps that would make the termination of their awards irrevocable — even as some of them are suing the agency to recover the funds.
Earlier this year, the Trump administration told all 105 recipients of the Community Change Grant Program that their grants had been canceled because it was a “diversity, equity and inclusion” measure that contradicted the priorities of President Donald Trump.
The program, one of several environmental justice initiatives enacted under the 2022 Inflation Reduction Act, offered $1.6 billion in grants to help communities cope with risks related to pollution and climate change.
Other IRA programs, such as the $3 billion Environmental and Climate Justice Block Grants and clean energy initiatives like Solar for All, were also canceled over the course of the year. A slew of challenges filed by nonprofits and state and local governments are now winding their way through the courts.
Now EPA has told recipients of Community Change grants that they missed a deadline to formally “close out” their awards and are directing them to do so expeditiously.
“These emails went out to everybody, [saying] that we are already delayed on the closing and that we need to proceed with it as soon as possible. Kind of ignoring the fact that you can’t be late on closing if you are not planning to close,” said Dominika Parry, founding president and CEO of 2C Mississippi, a Jackson nonprofit that received a grant amounting to nearly $20 million last year to offer emergency services, which is challenging the termination.
EPA did not respond to questions. “In keeping with a longstanding practice, EPA does not comment on pending litigation,” a spokesperson said in an email.
Closing out a grant would require the awardee to provide EPA with a final financial statement and program reports. That would entitle them to be reimbursed for costs that were incurred before EPA canceled their awards, and for the cost of some closeout activities after that, as long as EPA agrees to it.
But grantees who take those steps would also forfeit their right to challenge the termination in court, or to reopen their programs if challenges by other awardees were ultimately successful.
Parry said her group got the email pushing it to close out the grant soon after the government shutdown ended on Nov. 12. Other grantees received the notice at different times.
“EPA seems to be renewing its request that our clients close out their grants,” said Ben Grillot, a senior attorney at the Southern Environmental Law Center, which is representing some Community Change Grant Program clients challenging EPA’s cancellations.
Those groups are planning to tell EPA that the deadline doesn’t apply to them because their cancellations are still being litigated.
“Whenever they send us anything, we are saying, ‘No, we are not going to be doing it. We are suing you,’” said Parry.
Grantees were dealt a blow in August when a district court judge sided with EPA in deciding that it had the right to cancel environmental justice grants. The decision means the cases would be heard in federal claims court, a special tribunal that could provide monetary damages to grantees but not restore their grants. Many Community Change Grant Program awardees are appealing that decision, and their attorneys expect a hearing sometime next year.
Recipients who don’t plan to challenge the agency’s grant terminations say EPA is not cooperating with them. They expected to be able to access the government’s grant management portal to file for reimbursement of expenses they incurred during the program. But that isn’t happening.
Keith Matsumoto, program manager for Pacific International Center for High Technology Research, which received $13.8 million to help underserved parts of Oahu, Hawaii, build resilience to wildfires and hurricanes, said he was weighing whether to join the legal challenge.
“We may just close it out, only because we can’t keep paying the kind of attention to this project that we have been,” he said.
But Matsumoto said he’s had trouble accessing funds from the grant to cover expenditures that EPA indicated would be eligible. EPA’s termination letters stated that grantees would be able to seek repayment through a federal portal known as ASAP for “allowable costs incurred up to the date of this memo provided that such costs were contained in the approved workplan.”
“I basically said, ‘Hey, you know, we haven’t gotten paid. You want us to close out? You guys got to pay us.’ And the response was, ‘Well, all the money is gone, so you’re going to have to close out and then we’ll pay you,” he said.
Matsumoto said his organization has only six employees, and the tiny partners it works with couldn’t absorb a loss of tens of thousands of dollars while litigation winds its way through the courts. So, his group paid its partners out of its own coffers.
“So again, it’s a ‘You pay us back, and then we’ll move on,’ kind of thing,” he said. “But they can’t even pay us back. Why should we move on? And the fact that it’s an illegal termination. I would prefer to have to have this whole thing restored, because our partners are hurting.”
Attorneys representing grant recipients who are challenging EPA’s terminations filed a brief in federal court last week arguing that the agency appeared to be withholding close-out funds in order to gain leverage over grantees.
They asked the court to issue an injunction until the grantees’ appeal is decided. An injunction, they said, would prevent EPA from “holding hostage certain reimbursements — which EPA has already committed to paying — unless Plaintiffs close out their grants and risk the government arguing their claims are moot.”
“If EPA succeeds in forcing Plaintiffs to close out their grants, Plaintiffs risk the government later arguing that they have forfeited or can no longer vindicate their rights,” the brief states.
