Although there isn’t much public information available about the Justice Climate Fund, it appears to have been an overnight success.

After gaining nonprofit status in August 2023, the organization was awarded $940 million by the Biden administration just eight months later in connection with the White House’s $27 billion Greenhouse Gas Reduction Fund, which aims to provide financial assistance to reduce carbon emissions and reduce pollution. 

The Justice Climate Fund is not the only nonprofit newcomer suddenly made rich by the GGRF. Within a month of gaining nonprofit status from the IRS, Power Forward Communities, which reported 2023 revenues of $100, was awarded $2 billion.

The awards were made by the Environmental Protection Agency, which is new to the world of major grantmaking. The agency acknowledges it has never handed out such gigantic sums of money, and its inspector general told Congress last month it marked a “fantastically complex” and “unusual” setup that his small staff would be hard-pressed to follow.

Critics note that many of the awardees are run by politically connected figures. The single biggest winner in the awards, which were announced in April, was the Climate United Fund, which is slated to receive $6.97 billion. The fund’s directors include prominent Democrats, such as Phil Angelides, a former California State Treasurer, and Anthony Foxx, who served as Transportation Secretary in the Obama administration.

The unprecedented nature of the Greenhouse Gas Reduction Fund, which was created as part of 2022’s Inflation Reduction Act, is raising concerns about the Biden administration’s efforts to spend tens of billions of dollars in its final months, a gusher of taxpayer money that will flow into a poorly understood, untested, and difficult to audit format. The tremendous sums involved, the novelty of the program, and the EPA’s lack of experience in the field, as well as the unproven track record of some of the newly hatched recipients, have drawn the attention of lawmakers and others uncertain about how the taxpayers’ billions will ultimately be spent and who will keep track of it all.

“These groups are political front groups that are simply created to funnel billions of taxpayer dollars to Democrat campaigns under the guise of doing something good,” said Mandy Gunasekara, who served as EPA chief of staff in the Trump administration.

Daren Bakst, director of the conservative Competitive Enterprise Institute’s Center for Energy and Environment and a sharp critic of the Biden administration’s climate change spending splurge, said, “It’s worse than a slush fund – it’s a slush fund to create non-profit slush funds.”

The EPA describes the Greenhouse Fund as “an unprecedented opportunity to accelerate the adoption of greenhouse gas reducing technologies.” By investing in making residential homes and neighborhoods more “eco-friendly,” the money will pay dividends in both lower utility bills and higher employment, the agency says.

Neither the Justice Climate Fund nor Power Forward Communities responded to questions about their plans to spend the close to $3 billion in public funds they had received.

The $27 billion assigned to the Greenhouse Fund represents a fraction of the money the Biden-Harris administration has embedded in the Inflation Reduction Act for its green energy revolution. Biden acknowledged the bill’s true purpose this summer when he called the IRA a “climate” bill, thereby aligning the administration’s position with what leftist environmental groups such as the World Resource Institute hailed from the beginning as “the largest piece of climate legislation in U.S. history.” The IRA involved “hundreds of billions of dollars in clean energy, electric vehicles, environmental justice and more.” Billions more would be spent on the global warming front under the Biden-Harris Infrastructure Investment and Jobs Act that passed in 2021.

The EPA has made it clear it views the bonanza as seed money. The agency expects that each dollar the nonprofit recipients spend in seeking to reduce America’s carbon footprint will attract seven times its value in private investment. This anticipated capitalist activity has led many media accounts to label the nonprofits “green banks,” and it has created an entirely new wrinkle in the EPA, according to its inspector general. The Fund’s requirements also carry mandates that at least 40% of the billions be spent in “low income or disadvantaged communities” or “tribal” lands, and in some cases, winners have pledged to spend up to 70% of the money in those same areas.

“I can’t say enough about how complex this system will be,” EPA Inspector General Sean O’Donnell testified to a House subcommittee in September. “It’s like they created an investment bank. It’s fantastically complex. I think it’s unusual.”

“I think it’s more than unusual,” responded Ohio Republican Rep. David Joyce.

EPA Special Advisor Zealan Hoover pushed back at the claim that unusual secrecy surrounded the process and criticism that there are flimsy guardrails to ensure the $27 billion is well spent.

Greenhouse Fund money has been divided into three programs. The biggest is in the National Clean Investment Fund (NCIF), which will divide $14 billion among three groups, followed by Solar For All, which has $7 billion, and then $6 billion divided among five groups under the Clean Communities Investment Accelerator (CCIA).

While the degree of competition involved was not immediately made public, the EPA did provide the numbers to RealClearInvestigations. Three National Clean Investment Fund winners were chosen from a dozen applicants, while Clean Communities Investment Accelerator winners came from a pool of 26 proposals. “Solar For All,” which has the smallest awards, had 60 winners and 150 applicants, according to the EPA. Some of the NCIF and CCIA winners are associated with one another and publicly speak of their collaboration.

“In some cases, the umbrella organizations are new, but it’s set up to help long established groups such as the United Way or Habitat for Humanity,” Hoover said. “These are partnerships and coalitions in which we are very confident, and they submitted remarkably comprehensive applications.”

Hoover also told RCI the EPA will retain spending and auditing oversight, though that responsibility was not spelled out in any of the press releases that have accompanied the Greenhouse Reduction Fund. None of the groups receiving the billions responded to questions or agreed to comment on their plans for spending and how the money will be tracked and audited.

State-directed spending on new technology raises major questions about the role of government in promoting industrial development and in “picking winners.” In other words, are neighborhoods clamoring for what the nonprofits will sell, and how will the award winners attract $189 billion in private investment?

“Is there really any organic demand for all this?” said Travis Fisher, director of Energy and Environmental Policy Studies at the conservative Cato Institute.

But Hoover said the answer lies in the gargantuan scale, and that the lump sum awards will actually be spent in myriad smaller projects throughout the country.

“The theory is that by unlocking the market we’ll create the market,” he said. “The top line numbers are large, but this will jumpstart lending.” That activity will also be spurred because the award winners will offer a smorgasbord of energy-efficient projects rather than one standardized one, Hoover said.

The EPA and the award winners speak in glowing terms of what they will accomplish.

“To date, the eight selected applicants have supported thousands of individuals, businesses, and community organizations to access capital for climate and clean energy projects,” the EPA said when announcing the awards. “With their awards, selectees will unleash tens of thousands of more projects like these across the country for decades to come.”

The press release went on to describe individuals who needed water heaters replaced, communities that are investing in solar panels, and even the “sustainable rehabilitation of the historic National Guard Armory building located in one of Owosso, Michigan.”

This sort of activity also contributed to the “green banks” label, and it aligns with IG O’Donnell’s testimony that the EPA had essentially created a “fantastically complex” investment bank.

Critics say such problems are compounded by the political connections of many of the awardees, whose boards and directors are peppered with people with careers in various credit unions and what are known as “Community Development Financial Institutions,” or banks that are focused on distressed communities.

The board of the  Coalition for Green Capital, which got the second biggest NCIF award of $5 billion, includes Hugh Frater, who headed Fannie Mae at the end of the Obama administration. Another board member,Cecilia Martinez, was the top “environmental justice official” in Biden’s White House before moving to the advocacy and nonprofit sector. Stephen Brown, the Coalition’s chief network officer, began his Washington career in the Clinton White House, while Jessie Buendia, chief impact officer, was previously part of the California state government. Another highlighted officer with the Coalition is Daniela Nyiri, who worked on campaigns for Michigan Democrat Haley Stevens before moving to the Progressive Turnout Project.

The last NCIF installment of $2 billion was awarded to a group called Power Forward Communities, which was formed in 2023. It is led by Timothy J. Mayopoulos, who headed Obama’s Fannie Mae from 2012 to 2018. One of its directors is Shaun Donovan, who served in the Obama administration for all of its eight years, including a stint as secretary of Housing and Urban Development.

Power Forward Communities was granted its tax-exempt status by the IRS last March, one month before it landed the $2 billion award.

Some of the CCIA awards went to more established players, such as Inclusiv Inc., an outfit that has been around since 1977 and will get $1.87 billion, and the Opportunity Finance Network, which in 2022 had revenues of $76 million, according to tax records. Others are new arrivals on the scene, like the Justice Climate Fund, which formed in August 2023. The Justice Climate Fund’s CEO, Amir Kirkwood, had previously been with the Opportunity Finance Network, which received a $2.29 billion award.

Almost without fail, each award winner appears to have received a massive revenue boost from this surge of tax money under the Biden-Harris administration.

“The EPA does not have the wherewithal to handle $2-billlion grants – they were terrible at handling much smaller ones when I was there – much less an organization that previously disclosed a minuscule budget,” Gunasekara told RCI in an email. “There is very little oversight once the money goes out the door and even less accountability on whether the funds achieve the stated purpose in grant applications.”

House Republicans sounded a similar note at the September hearing, dubbed “Holding the Biden-Harris EPA Accountable for Radical Rush-to-Green Spending.” Democrats insisted that GOP concerns were hypothetical, given most of the actual spending has not yet occurred and is earmarked for a good cause. Republicans called attention to the unprecedented nature of the EPA’s arrangement.

“The Biden-Harris administration’s radical rush-to-green energy policies have fueled out-of-control inflation, which has driven up prices by more than 20 percent and destroyed the economic stability American families deserve,” said Rep. Cathy McMorris Rodgers, who chairs the House Energy and Commerce Committee.

“While American families are increasingly worried about unaffordable costs, the Biden-Harris administration is working relentlessly to expand its radical energy agenda,” added the Washington state Republican.

O’Donnell acknowledged that his staff, which has not grown apace with the EPA’s massive surge under Biden, would not be able to keep tabs on the $27 billion Greenhouse Fund.

Republican representatives said the Greenhouse Gas Reduction Fund follows enormous sums of money the Biden-Harris administration had already sunk into the EPA in the form of some $100 billion via the Infrastructure and Inflation Reduction Acts, effectively doubling the agency’s budget for five consecutive years.

“Spending at this pace and scale for any agency should raise concerns, but especially for an agency like the EPA with a known track record of waste, fraud, and abuse,” Rodgers said. “Under the Obama administration the EPA was given roughly $7.2 billion – nearly doubling its annual budget at the time. Even at that level, the EPA was not able to responsibly manage the spending.”

Several House GOP members echoed conservative think tanks that call the set-up “slush funds.” Fisher noted that various inspector general offices have already proved unable to keep tabs on the mountains spent on Department of Energy projects or COVID spending, and that the Greenhouse Fund smacks of more of the same.

“It’s insane,” Bakst said. “It doesn’t even matter if these were well established non-profits. How are you going to be sure the money is going to the right places?”

Hoover disputed critics’ characterizations. He said concerns about the billions going to relatively new nonprofits overlook the partnerships they have formed with well-established groups, such as Habitat for Humanity.

“We are confident in every successful recipient,” he said. “These groups submitted remarkably comprehensive investment strategies, and they have a network of partnerships and coalitions. In some cases the umbrella organization is new, but they are set up with help by long established groups.”

In addition, Hoover noted that “distressed or low-income” neighborhoods can be found in almost any census tract, and consequently, it is disingenuous to suggest the Greenhouse Fund will lack a national focus.

“We want to make sure no one is left behind by this energy transformation, and these programs will be in urban and rural areas, every part of the country,” he said.

It remains unclear exactly how much money has been given to the nonprofits already, and tracking the trillions earmarked during the Biden administration has proved to be almost impossible. Hoover declined to put an end-date on when the awards would be paid and said the “revolving funds, loans and lines of credit” that will be established by the winners and the private investment they attract means the process remains open-ended.

Some of the group’s press releases indicate they expect much of the money to come in 2025. But Hoover stressed the finality of the arrangements.

“All awards have been finalized, the individual winners are able to draw down on the money now along different timelines,” he said.

This article was originally published by RealClearInvestigations and made available via RealClearWire.

SUPPORT TRUTHFUL JOURNALISM. MAKE A DONATION TO THE NONPROFIT WND NEWS CENTER. THANK YOU!