Watchdog Discovers Deficient Greendoggle Due Diligence

Groups got billions of taxpayer dollars with applications that wouldn’t get you a bank loan.

Federal watchdog Protect the Public’s Trust (PPT) today released results of its latest investigation into the Greenhouse Gas Reduction Fund (GGRF), the largest fund in EPA’s history and one we long ago warned had the potential for waste and abuse. The research report, ‘These Numbers Don’t Make Sense’: The Shocking Weakness of EPA’s GGRF Award Process, details criticisms, doubts, and misgivings about the GGRF from reviewers and others knowledgeable about the program.

“These numbers don’t make sense.” “Lacks detail.” “It is unclear.” “Vague.” “Did not provide sufficient detail.” If your loan application or your proposal to a business investor (or your high school chemistry exam) came back with comments like this, you’d probably be discouraged. But if you’re a well-connected “green bank” applying to the EPA for billions in taxpayer dollars, take heart! The checks are on their way.

Most people have heard of the Biden EPA “throwing gold bars off the Titanic,” in the memorable words of a former appointee. To compile this report, PPT has made use of FOIA to discover how the EPA crew decided where to heave some of those shiny slabs.

The 2022 Inflation Reduction Act’s $27 billion Greenhouse Gas Reduction Fund (GGRF or just “Greendoggle”) shoveled an unprecedented sum at the EPA – three times larger than the agency’s entire annual budget – without commensurate oversight resources, to be disbursed in grants by the end of the 2024 fiscal year. EPA promised a “robust, consistent, and ethical” grant process by which applications would be scored by a review panel against 72 evaluation criteria. PPT reviewed thousands of pages of application materials for the three NGO “green bank” consortia that won the $14 billion National Clean Investment Fund (NCIF) to offer financial products to solar and wind energy providers, EV manufacturers, municipalities, community organizations, etc. It was plain to us that Climate United Fund (CU), Coalition for Green Capital (CGC), and Power Forward Communities (PFC) were graded on a steep curve.

On criterion after criterion, reviewers noted that required information was missing (in one case, financial statements). Comment after comment included some version of “not enough detail is offered.” Processes weren’t described, goals were not measurable, technical and operational definitions were missing. Management teams hadn’t been built, procedures hadn’t been created. A reviewer noted that CGC’s “operating liquidity is not strong as expected, given the amount of balance sheet capital” due to “high operating expenses amounting to about 2x – 3x total assets. This is a pattern, not just a one-time expense required to prepare for the EPA funding opportunity.”

At least CGC had a pattern. Regarding PFC, although “two of the three major coalition members (representing 60% of the award) are well capitalized with sufficient liquidity,” … “the lead applicant is a de novo entity with no financial statements.” Nor were there financial statements for two of its five coalition members, and two that did have financials have since left the coalition. Climate United also didn’t have financials since it was “a new entity purpose-built for the execution of our program plan and does not have a robust reporting history.” The applicants didn’t have plans to coordinate with grantees from other parts of the GGRF, communities or governments. In some cases the reviewers clearly knew more about the technology and markets than the applicants.

There is much more (or, if you will, much less) in PPT’s report – enough to scare off any sensible investor. But there were deep ties between the Biden EPA and NGOs at every level of the recipient consortia. Who knew diverting billions in other people’s money to dubious, politically tainted ventures was a relationship business?

“PPT has howled about the Greendoggle from the beginning and, unfortunately, we’ve been proven right every step of the way,” said PPT Director Michael Chamberlain. “The applications and reviews smack of both sides going through the motions with little thought for building on this money, for careful oversight, or even for any long-term solvency. This is not responsible stewardship of the public’s money or its trust.”

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