Government watchdog: Trump administration illegally withheld funds for innovative energy research

The program, which fosters emerging energy technologies, is a target for elimination by President Trump.

David Crane, former CEO of NRG Energy, center, and MIT Professor Richard Lester, left, discuss emerging technologies for the electric utility sector at an ARPA-E  conference. CREDIT: ARPA-E/video screenshot
David Crane, former CEO of NRG Energy, center, and MIT Professor Richard Lester, left, discuss emerging technologies for the electric utility sector at an ARPA-E conference. CREDIT: ARPA-E/video screenshot

The Department of Energy (DOE) instructed its officials to withhold $91 million from an energy program that the Trump administration had targeted for elimination, a clear and deliberate violation of a law that requires already-appropriated funds to be released, according to the Government Accountability Office (GAO).

The fiscal-year 2017 funds were illegally withheld from Advanced Research Projects Agency for Energy (ARPA-E), a program founded in 2009 during the Obama administration that provides funds to early-stage energy technologies. The program was created to make sure that the United States maintained a competitive advantage in developing emerging energy technologies.

“I hope that the administration now understands that federal agencies must provide lawfully directed appropriations to the programs to which they are dedicated,” Rep. Eddie Bernice Johnson (D-TX), the top Democrat on the House Science, Space, and Technology Committee, said in a statement released late Tuesday. “It cannot attempt to shut down an agency or starve a program it doesn’t like by withholding funds. It is illegal and we in Congress will not allow it.”

In its investigation, the GAO found that the DOE violated the Impoundment Control Act, which requires agencies to release appropriated money unless told otherwise by the president. Congress had appropriated the funds for the ARPA-E program for FY 2017. President Donald Trump had not instructed the DOE to withhold the funds.

“Violations of the Impoundment Control Act hinge on whether the agency clearly intended to withhold the obligation of budget authority,” GAO General Counsel Thomas Armstrong wrote in a letter Tuesday to Senate and House committees with jurisdiction over the DOE. “ARPA-E stated that it deliberately withheld the obligation of $91 million in FY 2017, per the Department of Energy’s instructions.”

ARPA-E is a bipartisan initiative modeled on the Department of Defense’s Department of Advanced Research Agency. The agency was designed to look at ways to develop technologies that would provide economic, security, and environmental benefits. The agency focuses on “high-impact, high-risk and high-reward” projects in areas in which the private sector likely would not invest.

In its official FY 2018 budget, the Trump administration proposed the termination of ARPA-E. The U.S. House of Representatives followed the president’s lead by also calling for the elimination of the program in its large FY 2018 spending bill.

“Eliminating ARPA-E would have damaging long-term consequences. Even if funding levels are maintained, ongoing questions about the agency’s future will undermine its success,” Brad Townsend, associate director for energy innovation for Bipartisan Policy Center’s Energy Project, wrote in a November 14 blog post. “To provide that certainty, policymakers should not only reauthorize ARPA-E long term, but appropriate funding more commensurate with its potential impact.”

In late April, Johnson wrote a letter to DOE Secretary Rick Perry asking why DOE initiated a “no contract action” order in which funds were not being disbursed for already approved grants. Johnson later asked the GAO to investigate whether the Trump administration was withholding ARPA-E funding. The fiscal 2016 funds for ARPA-E were later released.

Johnson’s committee staff later determined that the DOE was also likely withholding fiscal 2017 funds provided by Congress for ARPA-E in the Consolidated Appropriations Act of 2017. In a separate request, Johnson asked the GAO to investigate this possible withholding of funds.

The GAO found that the DOE had ordered the withholding of the $91 million in funding for ARPA-E. The GAO learned on November 28 that the DOE’s acting general counsel “immediately apprised the relevant parties of the legal requirements of the Impoundment Control Act.” The department then took action to ensure that all funds had been allotted to ARPA-E.”

Until the DOE’s Office of General Counsel intervened, the department “improperly withheld the obligation of budget authority in connection with the President’s proposed elimination of ARPA-E and a so-called ‘cancellation proposal’ in the President’s budget request,” Armstrong wrote in his letter.

“I want to thank GAO for undertaking this investigation. I am pleased that as a result, this $91 million will be released to further the critically important role that ARPA-E plays in support of our nation’s innovation ecosystem,” Johnson said.