Whistleblowers are essential to the climate efforts of the Inflation Reduction Act

Often, politics in Washington can start to look predictable. But for those worried about tackling climate change, the Senate produced an unexpected bombshell last week worthy of a season finale. After declaring that there was no agreement to be reached on tax reform and climate change, Senator Joe Manchin (DW.Va.) announced that he had reached an agreement with Senate Majority Leader Chuck Schumer (DNY) on a successful reconciliation package to invest in solutions for climate change and clean energy, reduce healthcare costs and reduce deficits.

Especially after the Supreme Court limited the EPA’s (Environmental Protection Agency) ability to effectively regulate greenhouse gas emissions in the energy sector, signaling its general skepticism towards ambitious regulatory action even when this is what it intended. Congress, spending power is now an essential point in reversing the effects of climate change. But wherever public funds are invested, some will seek to take advantage of it by engaging in waste, fraud and abuse that harm taxpayers and dull the effectiveness of important programs.

Under the False Claims Act (FCA), it is illegal, among other things, to knowingly make a false statement to the government for payment or approval. These frauds can be reported in a confidential complaint to the Department of Justice by a whistleblower. Whistleblowers may be traditional insiders, but they don’t need to be affiliated with the scammer, such as a competitor.

The Inflation Reduction Act of 2022, if passed, will include a number of new investments and incentives to combat climate change. To ensure that the significant investments announced in this deal have maximum impact, the government, aided by whistleblowers through the False Claims Act and other whistleblower programs, will need to ensure that abusers of these programs are required to respond.

Some components of the bill may be particularly vulnerable, but they are also fully covered by the False Claims Act, which offers the government and whistleblowers a path to stop the wrongdoing. First, the bill includes discounts and tax credits focused on consumer energy consumption. According to the Senate Democratic leadership’s summary of the bill’s climate provisions, $ 9 billion is being invested in “consumer home energy rebate programs, focused on low-income consumers, to electrify household appliances and to retrofit ad high energy efficiency “. Another billion dollars is dedicated to “mak[ing] affordable housing that is more energy efficient ”.

Similar green energy home renovation programs, such as the Property Evaluation Clean Energy (PACE) program created under the Obama administration, have attracted predatory and fraudulent participants, as illustrated in a segment of John Oliver’s “Last Week Tonight”. Furthermore, even if contractors use energy-saving materials, they can reduce how they use them, with little or no carbon benefit or cost to consumers. Attention to low-income families and disadvantaged communities is essential, but it can exacerbate the attraction of bad actors. False claims to directly obtain discounts or to trick consumers into falsely claiming them could be addressed through the False Claims Act.

According to, the bill includes billions of dollars in subsidies and new penalties to encourage emissions reductions from large industrial emitters as well as methane emissions in the oil and gas industry. Misrepresenting or overestimating the reduction of emissions or the environmental compatibility of business operations is already a frequent problem in a variety of markets, so much so that it is commonly referred to as greenwashing. Misrepresentations to the federal government about emission reductions or “clean” products have already been used as the basis for liability under the False Claims Act. And the Biden administration had already signaled that environmental compliance issues would become a priority. of application through, among other things, the FCA.

Third, the bill creates and funds a $ 27 billion “clean energy and sustainability accelerator”, colloquially called the “Green Bank.” The focus of the Green Bank will be “leverag[ing] public and private funds to invest in technologies and infrastructures for clean energy “. As we’ve learned from programs like the Paycheck Protection Program created to support small businesses during the pandemic, scammers tend to be drawn to new, well-funded federal loan programs. The Green Bank will be no different. Appropriate safeguards, supervision and accountability are essential to ensure that funds obtained improperly are returned and that offenders are held accountable.

Finally, the bill includes at least $ 6 billion in new funds to finance environmental justice and equity-focused grant programs aimed at empowering disadvantaged communities to address climate change, clean transport and other environmental justice issues. . In addition to the same wrongdoing described above, these grant programs are likely to include certain equity-focused requirements similar to minority business (MBE) or disadvantaged business (DBE) requirements in other government programs seeking to improve historically private communities. rights opportunity to access lucrative government contracts and grants. Too often, these requirements are abused by companies pretending to be, for example, owned by qualified ethnic minority people when they are not. This type of fraud violates the False Claims Act.

Now that Congress is so close to enacting what Senator Tina Smith (Recipient of Minnesota) called “the most meaningful action we have taken on climate, which we will take on climate and clean energy, ever,” we must ensure that these historic investments are protected and their returns maximized. Whistleblowers who are aware of wrongdoing causing fraud, waste and abuse in these programs will not only do the right thing to protect taxpayer dollars. They will also help fight climate change.

Maximum Rodriguez is an attorney at Pollock Cohen LLP. Rodriguez represents individuals and entities in the False Claims Act and other whistleblower matters, complex litigation, appeals and impact litigation. Rodriguez was the lead author of an amicus brief on behalf of 192 members of Congress at the Supreme Court in West Virginia v. EPA.

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