The Inflation Reduction Act (IRA) of 2022 was a $740 billion law passed to reduce the federal deficit, fight inflation, invest in domestic energy production and manufacturing, and to reduce carbon emissions. Among a host of other programs, the IRA created the $27 billion Greenhouse Gas Reduction Fund, often referred to as the “green bank” fund or GGRF. The green bank is designed to steer money into state governments, local governments, and nonprofit lenders to fund projects that reduce or avoid greenhouse gas emissions in low-income communities. Administered by the Environmental Protection Agency (EPA), the Greenhouse Gas Reduction Fund would contain three buckets:

• $14 billion green bank to lend for projects around rooftop solar, zero-carbon apartment buildings, and EV charging infrastructure
• $6 billion towards the Clean Communities Investment Accelerator to help nonprofit lenders that operate in disadvantaged communities to expand into clean energy finance
• $7 billion grant program for states, cities, and tribes dedicated to solar projects in low-income communities

Green Fund’s Vulnerability to Fraud

With its establishment, Congress set a September 30, 2024 deadline for the green bank money to be distributed. Such a rapid outflow of billions of dollars creates difficulties for the EPA.

In 2023, EPA Inspector General Sean W. O’Donnell first raised concerns that the rapid implementation of the program, combined with a relatively narrow window of availability for such a significant amount of funding, could lead the EPA to expend funds without fully establishing internal controls that mitigate fraud, waste, and abuse. Those concerns have not abated. In 2024, an EPA spokesperson stated that the program lacked sufficient funding for “proper financial management and robust oversight.”

The combination of the rapid disbursement of funds with the lack of an oversight budget has created a perfect storm for fraud in the Greenhouse Gas Reduction Fund. The fund is undoubtedly vulnerable to fraudsters who could falsify their eligibility to enrich themselves.

The role of whistleblowers

Fraud in the Greenhouse Gas Reduction Fund means the nation could fall behind in meeting its crucial targets for reducing greenhouse gases, especially in disadvantaged communities who could hugely benefit from green investment. This is why whistleblowers play a crucial role in safeguarding the program’s integrity. Whistleblowers also help ensure that Greenhouse Gas Reduction funds go to their rightful place, rather than to fraudsters. Whistleblowers can be anyone with inside knowledge of an entity who fraudulently applies for funds, whether an employee or corporate staff. Under the False Claims Act, whistleblowers whose information leads to a successful prosecution can be eligible for a reward of up to 30 percent of the amount recovered. An experienced whistleblower attorney can provide valuable assistance in the FCA claim filing process.

Baron & Budd Whistleblower Attorneys

Baron & Budd’s whistleblower representation team has more than 40 years of experience representing dozens of clients in government fraud cases. They have returned more than $6 billion to federal and state agencies with whistleblower recovery shares as high as 50%.

For more information, see What You Need to Know About Becoming a Whistleblower.