Judge directs Trump administration to comply with order on frozen funds

The ruling by US District Judge John McConnell is the latest rebuke of Donald Trump’s effort to halt grants approved by Congress.

Donald Trump speaks to the press on board Air Force One. Picture: AFP.

A judge has ordered the Trump administration to restore federal funding it had tried to freeze, saying the White House wasn’t fully complying with an earlier ruling against it.

In a written order issued Monday, U.S. District Judge John McConnell Jr. in Rhode Island directed the administration to “immediately take every step necessary to effectuate” a restraining order he issued Jan. 31.

The ruling from McConnell, an appointee of former President Barack Obama, came in a lawsuit brought by 22 states and the District of Columbia, one of a number of legal challenges that have been filed against the administration as it moves swiftly to implement its agenda.

The lawsuit focused on a directive from the White House’s Office of Management and Budget instructing federal agencies to pause funding while it assessed whether government programs complied with executive orders issued by President Trump cracking down on foreign aid, diversity initiatives and green-energy projects.

OMB rescinded that directive soon after the lawsuit was filed, but the states say some Congress-approved funds were still being improperly withheld. The initial rollout of the OMB policy sowed confusion among state governments, non-profits and lawmakers who were trying to understand which programs would be halted.

In his earlier temporary restraining order, McConnell told the administration that it couldn’t “pause, freeze, impede, block, cancel, or terminate” its federal financial-assistance obligations to the states.

After the judge issued that decision, the states asked him to issue a follow-up order enforcing the earlier restraining order, saying the states “continue to be denied access to federal funds.” The states said in a court filing that still-frozen funds included about $7 billion in grant money for solar panels and $5 billion that supports greenhouse-gas reduction measures.

In a court filing Sunday, Justice Department lawyers said the administration had made “good-faith, diligent efforts” to comply with McConnell’s earlier ruling. They said the funds at issue were frozen because of a Trump executive order, signed hours after he was sworn in, that paused tens of billions of dollars in federal climate spending.

The administration “reasonably interpreted the temporary restraining order not to extend to that” executive order, which wasn’t challenged as part of the lawsuit, the Justice Department said.

The Justice Department also argued that the Jan. 31 order didn’t prohibit federal agencies from reviewing payment requests to ensure they weren’t fraudulent or wasteful.

McConnell rejected the argument, writing that the administration had “violated the plain text” of his restraining order.

“The Defendants now plea that they are just trying to root out fraud,” the judge wrote. “But the freezes in effect now were a result of the broad categorical order, not a specific finding of possible fraud.” The Trump administration’s whirlwind efforts to examine government spending have been met with lawsuits from opponents across the country. One of the latest examples came on Monday, when a group of Democrat attorneys general representing 22 states sued federal health agencies over a move last week by the National Institutes of Health to cut billions in research funding to medical centres.

NIH’s Friday announcement set a 15% rate cap on dollars allocated to laboratory support services, which include things such as heating and ventilation, specialised biosafety equipment in labs working with dangerous pathogens, and hazardous waste disposal for chemicals. These “indirect cost” rates are negotiated by institutions directly with the federal government and can reach more than 60%.

NIH estimated this cut will save $4 billion a year. Researchers and groups representing medical centres warned the move would crush their capacity to do lifesaving and innovative work. Consequences could include suspending clinical trials, stopping research projects, deferring hiring, or furloughing existing staff, said Elena Fuentes-Afflick, chief scientific officer at Association of American Medical Colleges.

Monday’s lawsuit filed in Massachusetts federal court challenges the NIH’s authority to change existing rates, pointing in part to a measure in a budget bill that the attorneys general said barred such shifts. The lawsuit seeks to annul NIH’s decision, and asks the judge to impose a temporary restraining order and preliminary injunction to prevent it from taking effect.

“NIH’s move is simply illegal,” Illinois attorney general Kwame Raoul said at a press briefing, estimating that the move would cost the University of Illinois system about $67 million annually.

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