Oversight Hearing titled “The Profit Engine Driving Environmental Nonprofits.”

Sight and investigations will come to order. Without objection, the chair is authorized to declare a recess of the subcommittee at any time. The subcommittee is meeting today to hear the testimony on the profit engine driving environmental nonprofits. Under committee rule four F, any oral opening statement at the hearings are limited to the chairman and the ranking member. I therefore ask you now in consent that all of the members' statements be made in part of the of the hearing record, if they are submitted in accordance with this committee rule three zero. Without objection, so ordered. I ask you now in consent that the following members be allowed to sit and participate in today's hearing. Gentleman from Wyoming, Miss Hagerman. Gentleman from Co- Colorado, Mr. Crank. Gentleman from Minnesota, Mr. Stauber. Gentleman from North Carolina, Mr. McDowell. Gentleman from Oregon, Mr. Bentz. Gentleman from North Dakota, Miss Dorchek. Gentleman from North Carolina, Miss Ross. Gentleman from California, Mister Min. Gentleman from Wisconsin, Mister Tiffany. Gentleman from Arizona, Mister Crane. Gentleman from Montana, Mister Dowling. Gentleman from Minnesota, Miss Fischbach. Gentleman from Ohio, Mister Rudy. And gentleman from Virginia, Mister Beier. Without a judge's order. I'll now recognize myself for our opening statement.

Thank you.

Good afternoon everyone, and I wanna thank our witnesses for testifying before this opening on oversight and investigation this afternoon. We're here to talk about the profit engine driving environmental nonprofits, a seemingly endless pattern of litigation that results in taxpayer funded attorney fees or settlement arguments agreements and misleading fundraising campaigns. While many conservative minded nonprofits valiantly work to steward America's natural resources by organizing tangible effects, efforts to improve forest health, restore habitat, increase access to the outdoors, and ensure essential multiple uses of America's public lands. Other non-profits linked to some radical environmental groups have instead built powerful and profitable litigation machines. Although my colleagues on the other side of the aisle will likely attempt to downplay and distract from the purpose of today's hearing, We're here to shine a light on the abuses penetrated, perpetrated by the extremist environmental organizations, and root out taxpayer subsidies for sue and sell tactics. Make no mistake about it. The evidence of radical environmentalism abuse of our taxpayers' dollars is startling. Some litigation focused preservationist non-profit groups claim to provide free legal services. Yet more than forty percent of their annual fund funding derives from legal representation and vice. In other words, half their budgets are paid for by taxpayer funded settlements and attorney fees awards. Between fiscal year twenty nineteen and fiscal year twenty twenty four, federal agencies like the Department of Interior and the Forest Service paid an estimated twenty four point eight million in equal access to the Justice Act awards. With roughly seventy six percent of that going to environmental nonprofits instead of forest management or en energy development projects. Likewise, Endangered Species Act, ESA, Fea shifting payments totaled more than twenty point two million over the last five years. These large payouts are possible because there is little oversight at fee awards sought by non-profit litigants. For example, some courts use the load star method, allowing non-profit lawyers to set their own reasonable hourly rates and billable hours. These figures are usually just rubber-stamped by the courts because they spend time because time is spent by the Department of Justice. Contesting fee awards is added to a non-profit's group's ultimate windfall. Worse yet, even EG's hundred and five dollars an hourly cap is frequently bypassed through a special factor, exception that courts for attorneys claiming environmental expertise. Astonishingly, in some cases, courts have ruled that the expertise justifying higher payment was gained during the litigation itself. Yet this expertise does little to protect the environment. A twenty twenty four breakthrough institute study found that most NEPA related litigation from twenty thirteen to twenty twenty two produced few meaningful changes to environmental reviews. Instead these lawsuits often disturbed as delays and profit tools leading to repetitive reviews that drain agency resources and enrich radical nonprofits and part the way from our lawsuits and fundraising campaigns. To address these abuses I introduced hr twenty eight forty one, the putting trust in transparency act legislation, requiring requiring any NGO receiving federal dollars to publicly disclose their major donors who helped sustain the endless cycle of the sue and settle. I am heartened to know that other Republican members of Congress are also working to end fee set shifting abuse by extremist environmental groups. And will, without congressional oversight and meaningful legislation reform, radical environmental nonprofit organizations will continue to use this litigation driven model as a tax payer's expense. I look forward to today's testimony and to shining a light on these long-standing abuses. Thank you and I'll now recognize Ranking Member Dexter for her opening statement.

Thank you, Mister Chair, and thank you to the witnesses for being with us today. When the government breaks the law, it should be held accountable. I think we can all agree on that. Anyone should have the right to bring a lawsuit forward if they have been wronged. But the litigation is expensive, and without support, only the wealthy would have the means to fight back. That is exactly why Congress created what are called fee shifting laws. The principle is simp simple. If you wanna sue the government and you won win because the government broke the law, the government pays your legal fees. This allows people from all walks of life, ranchers, veterans, tribal members, seniors, and environmental protectors to have their day in court. The fee shifting law we are here to talk about today, the Equal Access to Justice Act, is primarily utilized by seniors and veterans. My Republican colleagues have called this hearing because they are concerned that individuals are abusing this law and misusing taxpayer dollars in the process. I hear that concern and agree that Congress should ensure taxpayer dollars are not wasted. But if that is the focus of this hearing, then, Mister Chair, we cannot ignore what is happening right now, right under our noses with the judgment fund. The judgment fund was created for a specific, narrow purpose. to pay court judgments and legitimate legal sentelments when the federal government loses a case brought against it. It is permanently appropriated. It does not go through the annual congressional budget process. That means there is very little congressional oversight. These dollars were intended only to be paid out in very specific situations. This administration is exploiting this lack of oversight, and it is imperative that we speak out and put a stop to it. The administration is stealing two billion dollars from taxpayers to cancel four offshore wind leases. And more illegal payoffs are being negotiated right now, as we speak. These are not settlements. Trump is using taxpayer dollars to kill good, renewable, clean energy projects. He is breaking the law and using brute force to get his way. And now, we know that that was just the beginning. Last week we found out that Trump, in cahoots with the DOJ, is using the judgment fund to create a new one point eight billion dollar slush fund to protect January sixth insurrectionists. Insurrectionists who stormed these halls, who threatened to kill our colleagues, who called for the Vice President to be hung. Donald Trump has been clear that he does not care about the American people, that they can't afford their utility or gas bills. that they lack trust in the government. He is stealing taxpayer dollars to pay off his cronies and loyalists, and it's this committee's responsibility to stand up for the rule of law. We've gotta prioritize people over insider dirty politics. So while Republicans called a hearing to examine the abuse of the Equal Access to Justice Act, which again is primarily used by seniors and veterans, the judgment fund is openly being abused by our president. What sort of upside-down reality are my colleagues on this committee living in? Mister Chair, I believe you to be a man of integrity and courage. I believe my Republican colleagues must have some, some concern about the door of corruption, corruption they are holding open. This president's fraudulent use of the judgment fund is the most consequential and damaging abuse of taxpayer d- dollars happening in this country right now. And that's saying something. This committee has the obligation to demand answers. Thank you, Mister Chair, I yield back.

Thank you, gentlemen. The gentleman for the chairman of the full committee is now recognized, Mister Westman, for his opening statements.

Well, thank you, Chairman Gosar, and thank you to the witnesses for being here today. You know, I would love to get to the the bottom of the the judgment fund has nothing to do with this committee because uh that would be maybe the the judiciary committee or some other committee of jurisdiction but i would love to know how many sue and settle lawsuits are out there that have been sealed that uh i think the american taxpayers would be shocked to know how much of their hard-earned tax money has been uh paid to uh some of the litigants that have filed suits and um gotten those suits settled and nobody knows how much money they've got. So I would I think that should be a bipartisan effort to find out what all's in that judgment fund how it's been abused. Uh but again that's not this committee's jurisdiction. Uh we're here today to talk about something that uh is in our jurisdiction. I know ma- many of you have traveled from a long ways to being here. We appreciate you taking time out of your schedules. uh to do so. Throughout the one hundred and nineteenth Congress, the Subcommittee on Oversight and Investigations has worked to highlight the outsized influence that some nonprofits wield over the federal government over law and policy and public policy. In December, the subcommittee held a hearing to discuss the Equal Access to Justice Act, or EJA, uh in legislation that was originally enacted to support individuals like veterans and social security recipients. and small organizations facing government overreach or wrongdoing. EJA has since been usurped by environmental NGOs to reimburse their lawfare campaigns with taxpayer dollars. And though EJA reform is crucial to ending historic financial abuses, EJA is only one piece of the powerful profit engine driving some of these nonprofits. In fact, many uh major environmental laws today, including the Endangered Species Act, including fee shifting, or include fee shifting provisions that, as written, empower similar abuses by prominent groups already flushed with cash by allowing them to recover attorney's fees. And I use the term " recover" loosely because in many cases the fees received by environmental nonprofits greatly exceed the value they place on their own attorneys doing the legal work for which they are paid. For example, in one case analyzed by Mister Wood, who is testifying here today, An attorney who has paid less than a hundred and twenty-five thousand dollars, uh approximately sixty-two fifty per hour, asserted a reimbursement rate of five hundred fifteen dollars per hour, representing about seven hundred percent profit for the employing non-profit. And because precedents in court, like those in the NICE circuit, significantly favor environmental non-profits, exorbitant payouts like these are not rare. Given this reality, prosing that many environmental nonprofits with mission statements disingenuously highlighting passions for wildlife and wild places, actively steer clear of investing in on the ground habitat restoration projects in favor of continuing to capitalize on a lucrative business model. Sue to block federal actions in friendly courts, collect taxpayer funded attorney's fees, and cost whoever prevailing are able to settle in court, and fundraise on the back of courtroom victories to keep this cycle going, indefinitely and the coffers overflowing. Here, sunlight is a wonderful disinfectant. During President's turn or Trump's first term, ex- executive agencies, including the Department of Interior, were required to give the public notice of litigation and settlement agreements to ensure transparency. Under President Biden, those policies were revoked. Fortunately, just last week here in this hearing room, Secretary Burgum recognized the importance of ensuring related to non-profits currently funded by taxpayer dollars. Moreover, my colleagues and I here in the House of Representatives have been working tirelessly to craft legislative solutions to the abuses of taxpayer funds by extreme NGOs. For example, in the ESA Amendments Act of twenty twenty five, we seek to reasonably rein in litigation costs to taxpayers while preserving the noble origin or original intent of ESA's fee shifting provision. Ultimately, we cannot continue to allow powerful nonprofits to unjustly profit from vexatious litigation. With every backdoor settlement agreement and disproportionate award of attorney's fees, our nation's natural resources and its taxpaying citizens are the ones that suffer. Again, I look forward to hearing the witnesses' testimony today, and I yield back, Mister Chairman.

I thank the Chairman for his comments. I now recognize the Ranking Member for the Volcomity, Mister Huffman for his

Thank you,

remarks.

Mister Chairman, and uh I'm disappointed to hear Chair Westerman suggest that the the billion dollar buyout of Total Energy's offshore l wind lease uh is not a matter that this committee has jurisdiction over he knows better he knows that offshore wind leasing is squarely within the jurisdiction of this committee. Everyone knows that. So look, I understand my Republican colleagues wanna continue looking away from all of this grift and corruption from the waste of billions of dollars of taxpayer money, but they're gonna have to come up with a better excuse than that, that we just heard. Uh, so this co- this subcommittee today is once again doing just about everything except real oversight and real investigation into the urgent issues facing the American people. Uh, they're airing a re-run, and a bad one at that. Last December they attacked the ability of environmental nonprofits, or veterans, or seniors, to hold the government accountable for violating the law and contrary to the conspiratorial spin on the other side of the aisle, statutes like the Equal Access to Justice Act work exactly as Congress designed them. When the government breaks the law and loses in court, it pays. That's the system working. But we're here once again with a slate of witnesses that includes at least one climate denier. for another episode of Gilligan's Island. Now there's no shortage of real oversight in investigation we could be doing, and should be doing, we should be talking about. Uh, the fact that Secretary Burgum lit a billion dollars of taxpayer money on fire by paying a French energy company, Total Energy, not to produce affordable clean energy. And then he routed the payment through a federal account illegally. And then finally tried to declare the deal immune from lawsuits. Judiciary Committee ranking member Jamie Raskin and I opened an investigation into that arrangement. And here are the major problems that we have found so far. First, uh, the national security justification appears to be totally fabricated and fabricated after the fact. The Interior Department told a judge that it was first briefed about potential national security ish uh risks on November twenty sixth of last year. We have internal emails that we'll release today showing that the Interior Department and Total Energy were already circulating a draft agreement, nearly two weeks before that date. DOI committed to paying Total nearly a billion dollars before it had concocted uh its justification of a national security issue. Second, the amount paid has no basis in law. Federal law sets a specific formula. for the compensation a company can get when a, uh, when the government cancels an offshore lease. Secretary Burgum just ignored it. Instead, he paid out far more than they would likely have gotten under that formula, because he wanted a trophy for Donald Trump, who hates windmills. And the cost of that trophy simply didn't matter. Third, DOI paid total energy out of the judgment fund, a federal pot of money meant to pay Americans whose rights had been violated, not to write blank checks, to fund backroom deals for big oil to please the president. To unlock this payout, Secretary Burgum required Total to spend the money on fossil fuels, specifically the Rio Grande Rio Grande LNG export facility in Texas. That's a facility that will ship American energy abroad. It is good for countries like China, but it actually drives up our electricity bills. This is more of the America last policy. Then there's the legally laughable clause at the end of the settlement agreement. Paragraph eighteen declares no court can ever review this deal. Now, no cabinet secretary has the power to do that, to declare themselves above the law. It's just not a thing. An administration that believes it was acting lawfully would never include a clause like that in the first place. And that was just the start of the judgment fund abuse that we have seen recently. Another billion dollar clean energy affordable energy crushing deal has already been inked. And now, Donald Trump has ever, has apparently figured out that using this judgment fund as an unlimited line of credit for whatever the hell he wants is kind of useful. No annual cap, no congressional review, so he couldn't resist helping himself to more of it. He's now using it to pay one point eight billion to the people who participated in the insurrection against our nation. who beat, gassed and killed police officers and bragged about it on social media. My Republican colleagues today are upset that environmental groups sometimes win in court, when the government has broken the law. But Secretary Burgum is the one breaking the law right now. And frankly, it's time for my Republican colleagues to change the channel from this sad Gilligan's Island rerun. Let's do some real oversight for a change.

I think, Joan, these guys' facts are wrong. There was no police officers killed by the other groups.

Tell that to Brian Sissnick.

And No, he he actually died in in uh uh natural causes.

Oh, you you've done the the forensics on that.

Well, the what he we'll just leave it at that.

Th this will be big news to his family and the whole world and anyone else who knows

Oh.

uh why officers say they've died.

No, there was actually, he was talking

Shame shame on you for suggesting that, Mister Chairman.

No, no, no, no, no, no, no, no. Uh, and now I'm going to introduce our witnesses. First we have Mister Jonathan Wood, Vice President of Law and Policy, Property and Environmental Research, Center, Boatham, Montana. Next we have Mister Ken Braun, Managing Editor, Director of Content, Capital Resource Center, Saginaw, Michigan. And then we have Mister Eddie Ahn, did I say that right? Executive Director of Brighttown Defense, San Francisco, California. And finally we have Mister Lawson Feit, Natural Resources Attorney, Portland, Oregon. Now let me rime remind the witnesses that under committee rules, you must limit your oral s statements to five minutes, but your entire statement will appear in the hearing record. To begin your testimony, you'll see the on button. You should make sure we can hear you. It'll turn on green when it is to yellow, you gotta wrap it up, and then when it's red, stop. Just remember the whole your whole testimony will be be printed. With that, I now recognize Mister Wood for his t five minutes.

Thank you, Chairman Gosar, and can remember Dexter, members of this subcommittee, for the invitation to testify before you this afternoon. I'm Jonathan Wood, an attorney and Vice President of Law and Policy for the Property Environment Research Center. PERC is a conservation group based in Bozeman, Montana, whose work is centered on the recognition that incentives matter for conservation. Today I wanna focus on how federal policy can unintentionally distort incentives and steer groups away from meaningful on the ground conservation toward picky and procedural litigation. But before I get to that, I should acknowledge that I share the ranking members' um commitment. I've devoted the bulk of my career to suing the government. I firmly believe that challenging legal government action is essential to a free society and the rule of law. And I support Congress's goal in passing the Congre Civil Rights Act, Equal Access, Just Act, and other fee shifting laws that seek to remove legal costs as a barrier to citizens bringing righteous cases against the government. I'm concerned, however, that in practice some of these laws can go beyond cost recovery to subsidize litigation, which distorts how some conservation groups evaluate litigation versus other tools. The subsidy can be so strong that environmental groups have chosen litigation, even in the face of cheaper, more effective alternatives. In my remarks this afternoon, I'll focus on one recent example out of Oregon that exemplifies the problem. There, environmental groups declined an opportunity to permanently conserve an old-growth forest, only to spend more money litigating over an alleged permit requirement concerning that same land. The Elliott State forest was established to fund public education, but as conflict over logging grew, the land change from an asset for schools to a liability, losing millions per year. With few options to comply with its fiduciary obligations, Oregon put up a for sale sign. But the state wanted the forest, old growth trees, wildlife habitat, and recreational opportunities to be conserved for posterity. It specifically solicited bids from conservation buyers, but none came in. And a three hundred fifty-five acre tract of old growth forest sold to a timber company for seven hundred eighty-seven thousand dollars or two thousand dollars an acre. Almost immediately the company was sued, and uh a litig litigation group's alleged that its plans to harvest timber on fifty of those acres required a federal permit under the Endangered Species Act, due to the presence of marble burlet. To their credit, they won their lawsuit. But the case didn't conserve the forest forever. It merely required the company to seek a permit before logging it, with no guarantee that this would produce comparable benefits for the forest or for the species. And the lawsuit came at great cost. At the conclusion of the trial phase, the group reported nearly one point two million dollars in attorney's fees. From a conservation perspective, this is an outrageous result. Who in their might right mind would forgo paying two thousand dollars an acre to permanently conserve an old-growth forest, to instead spend twenty-four thousand dollars an acre litigating over the plans to harvest that forest? The decision makes sense ultimately once you account for the incentives created by federal policy. If the groups had purchased the land, they would have achieved their best conservation outcome, but at significant expense. While suing led to an inferior conservation outcome, it could also generate a financial windfall. This is because the hypothetical hourly rates used to calculate attorneys' fees consistently and sometimes wildly exceed real-world litigation costs. For instance, as the Chairman Westerman mentioned, one of the attorneys on the case, according to public information, has a salary that translates to less than seventy dollars an hour. In the organization's motion for attorney's fees, his employer reported five hundred fifteen dollars an hour as the reasonable rate for his time. For the organization, their investment litigation translates into a seven hundred percent profit margin. You can't get that with on the ground conservation. This is no aberration. It is common for the hypothetical rate used for lost student interns and first year attorneys to exceed what virtually all senior non-profit attorneys actually make. To be clear, I'm not saying that any of these attorneys or their ag organizations did anything untoward. They are simply responding to the incentives created by federal policy. But I suspect Congress didn't intend this result when they authorized fee shifting. We face real conservation challenges, including a wildfire crisis fueled by an eighty million acre backlog and needed forest restoration, a huge shortfall in endangered and threatened species recovery, with the Fish and Wildlife Service reporting that it has only it has recovered only eleven three hundred species, it predicted to recover by the law's fiftieth anniversary. Solving these challenges depends on having the right tools and prioritizing them. But a strong federal signal that litigation's preferred tool, regardless of costs or conservation impact, distracts from this. Fortunately, we can fix this problem without restricting the right to sue, or even taking away access to reasonable attorney's fees. As the Binzit and Rich case shows, what we need are cost-effective market tools by which conservation

I think, Mister Woods, I now recognize Mister Braun for his five minutes.

Thank you, Mister Chairman, and members of the committee, um, Capital Research Center is a follow the money non-profit, so today's subject is right up our alley. Um, some of the non-profits I'm about to discuss uh have an honorable history of preserving the features and creatures that Americans love. Examples include the creation of our greatest national parks, protection of the bald eagle, and much more. I I would like to say that we need that conservation movement back. Um, we don't have it today. In nineteen sixty-six, the board of the Sierra Club, one of those venerable uh conservation nonprofits, voted nine to one to support the construction of California's Diablo Canyon nuclear power facility. This was a no-brainer. Uh, nuclear power provides an unrivaled combination of energy safety, reliability and abundance, it produces no greenhouse gases, emissions or uh any emissions really except for water vapor, it's easy on the earth in other ways as well. The Department of Energy reports that a typical nuclear reactor needs just a bit more than one square mile to operate, while getting the same energy from wind turbines requires three hundred and sixty square miles of what we should be calling the environment. But these so-called clean energy sources actually chew up far more of the environment than they need. Um, or than we need for energy production anyway. But now the Sierra Club is quote " unequivocally opposed", they say, to nuclear and falsely claims it is " uniquely dangerous". They are joined by hundreds of American NGOs with a known history of opposing the continued use of nuclear power, oil, natural gas and coal. That's eighty-eight percent of all the energy that we use. In place of this, most or not, if not all of them, support unreliable weather dependent landscape clogging, wind turbines and solar panels. What this is is an anti-energy movement that collectively rakes in an average of nine point three million dollars per day. Most of these of that anti-energy money comes from philanthropists or the bureaucrats now spending their fortunes if they passed on, but not all. In their most recent publicly available annual IRS filings, the Environmental Defense four of them, the Environmental Defense Fund, the World Resources Institute, Grid Alternatives, and the Rocky Mountain Institute, reported receiving a combined total of thirty-one point seven million dollars just in government grants in one year. Maybe the avowed enemies of American energy should not be receiving money from the American government that's supposed to be promoting the energy we need for prosperity. If those grants aim to answer legitimate public interests, You should probably find other grantees. Then there are those legal reimbursements, both from the government and other litigants that you were discussing. This one is trickier because as has been said by um mister Wood and and uh the ranking member, um we need to protect the work of firms that represent plaintiffs who cannot afford to fight back against the limitless resources of the federal government. Uh the Pacific Legal Foundation and the Institute for Justice are public interest property rights litigators that represent homeowners and landowners in cases involving alleged government overreach. Over the most recent five years covered by the available IRS filings, Pacific Legal reported two point seven million in litigation cost recoveries, equal to about one point seven percent of their revenue. Uh, IJ uh, similarly seven point two million in legal cost recoveries over those five years, or three point three percent of their total revenue. Compare that to some of the anti-energy litigants. Roughly comparable in total budget to IJ and PLF, the Center for Biological Diversity hit twenty-three point four million in legal recoveries over those years averaging thirteen point six percent of their total revenue. A smaller NGO, Advocates for the West, reported a whopping forty percent of annual funding from what they call legal re- representation and advice. This does not prove, as has been said, that anyone is shopping for cases that can get them paid. But these are public interest firms. Perhaps the public deserves some additional transparency about what these settlements are. Back in nineteen sixty six, when the Sierra Club was still a pro-e energy non-profit, uh philosopher Eric Hoffer wrote, every great cause begins as a movement, becomes a business, and eventually degenerates into a racket. Have the climate NGOs become a business, become businesses that profit from opposing the energy that is built and will continue to fuel American prosperity? A rich nation buys anything it desires, a poor nation accepts scraps. Energy abundance is the difference. We will lose those eagles, those national parks, and much else if we allow the anti-energy NGOs to become a racket. Government needs to do its part to stop subsidizing this. We need those old pro-energy conservationists return, to return. Thank you again for the invitation.

Thank you, Mr. Ahn. Now, Mr. Ahn, you're recognized for your five minutes.

Chair Gosar, Ranking Member Dexter, and members of the subcommittee, thank you for the opportunity to testify today and contribute to this discussion on federal settlement authority. My name is Eddie Ahn, and I am the Executive Director of Bright Line Defense, a non-profit organization working on energy policy, as well as workforce and community development. I am also an attorney, and my testimony today focuses on one specific but profoundly important and integrated issue which is the use of federal and the Judgment Fund to enter into offshore wind lease termination agreements. This issue raises a fundamental constitutional question, whether executive settlement authority is being used in a manner consistent with Congress's Article-one power over federal spending. Congress created the modern Judgment Fund in nineteen fifty-six to streamline payment of legitimate legal liabilities owed by the United States. Before then, the agencies often had to seek separate uh congressional appropriations whenever the government lost a lawsuit or entered a settlement. The fund was intended to pay judgments and settlements efficiently, while reducing delay in interest costs, in the interest of the American taxpayer. Historically, the fund has then been used for recognizable legal liabilities, contract disputes, tort claims, employment cases, procurement disputes, and settlements tied to actual litigation exposure. One familiar example is the payment of attorney's fees, under EJA, which we're discussing today. Those payments are typically modest, and directly connected to judicial findings, or active litigation. I had to double check these numbers, but the double, uh, Department of the Interior reported only ten EGIAA payments in fiscal year twenty twenty five, totaling under one point eight million. That ordinary pattern of relatively modest litigation related expenditures stands in contrast to total judgment fund payments attributed to Interior that same year around a hundred times larger at approximately one hundred and eighty-three million dollars and then that historical pattern stands in sharp contrast to the offshore wind settlement, uh, that are being, uh, publicly reported. The offshore wind settlements to date are nearly ten times that, with approximately one point eight billion as payments associated with the voluntary termination of the federal e- energy leases. Within the last few months, the administration has entered into agreements involving offshore wind developers, Total Energies, Blue Point Wind, and Golden State Wind, for which the companies receive reimbursement of hundreds of millions of dollars, in exchange for voluntarily relinquishing these leases and redirecting investment toward fossil fuel infrastructure projects. Which brings us to the central legal question. Are these settlements of actual legal liability? Or are they discretionary policy expenditures designed to reshape private sector investment behavior? The judgment fund is available only when payment is legally authorized and not otherwise provided for by another appropriation. Congress did not establish a permanent indefinite appropriation, just so that executive agencies could finance major industrial policy decisions outside the normal appropriations process. There are several aspects of these agreements which raise significant concerns. One, public reporting has not identified any final judgment, adjudicated damages award, or clearly imminent monetary liability requiring payments of this scale. Two, there's little if any publicly identified statutory authority allowing the Department of the Interior to reimburse companies simply for voluntarily relinquishing offshore wind leases acquired through competitive federal auctions. Third, these agreements extend beyond ordinary litigation settlement into affirmative economic policy making. And the economic and operational impacts are significant. Cancellation of one single gigabyte offshore wind project, wipes billions of dollars in domestic uh uh economic activity tied to ports, shipbuilding, steel fabrication, transmission infrastructure, and manufacturing supply chains planned in multiple states. Offshore wind also supports thousands of jobs related to these investments.

Mm-hmm.

And for these reasons, Congress has an important oversight role here. At a minimum, Congress should see clear answers regarding the legal basis for these settlements, whether actual monetary liability existed, whether the judgment fund was used or contemplated, and what statutory authority supported the payments. The judgment fund serves an important and legitimate function, as noted by Ranking Member Dexter, but Congress imposed limits on its use precisely because the permanent appropriations requires heightened accountability and transparency. Ultimately, this issue is about preserving the constitutional distinction between resolving legal liabilities, and financing policy objectives. It is also about protecting Congress's authority over federal expenditures and the long-term consequences of these decisions may have for domestic manufacturing, energy reliability, and local infrastructure planning. Thank you again for the opportunity to testify. I look forward to your questions.

Thank you, Mr. Don. And now, recognize Mr. Feit for his five minutes.

Thank you, Mr. Chairman. Um, Doctor Gosar, Doctor Dexter, members of the committee, Uh, thank you for the opportunity to participate in this hearing. My name is Lawson Feit. I'm a uh Natural Resources Attorney who has practiced in the federal government, in trade groups, and in private practice over the last twenty years, including substantial experience under the Dangerous Species Act and other related environmental statutes. I have handled many cases that ultimately led to a petition for attorney's fees. I've gained a familiarity with the intricacies and incentive structures of the fee shifting statutes. And I've seen the real world implications of these statutes, um, apart from the just plain words in the statute book. I wanna emphasize today that incentives matter. And there are two types of fee shifting statutes we're discussing today that have different incentives and dis different setups. So, IJA, and as many of our witnesses and uh members of the committee have noted, was originally established for the small business person, the homeowner, who wants to um bring a suit against the government and can't really afford counsel. And EJA has continued to be structured to support that vision in that there are guidelines on h- on the assets of a petitioner on that can that can seek a fee award under EJA. There are caps on the the appropriate hourly rates under EJA. And so, it has a different structure and a different incentive um formula than some of these other environmental fee-shifting statutes with which the ninth circuit for example has indicated, were in were enacted to encourage litigation. They have been successful in that goal. Uh, my written remarks note the number of judgment fund payments from another from a number of these fee fee shifting statutes. There's no limit on who can apply for an award under these statutes. There's no rate limit. Uh, and the courts s- generally have not looked too closely at the contents of a fee petition. And in fact, uh, the the courts are less likely to affirm or a a um a decision that is um or to put it another way a a district court is much more incentivized to just let a fee petition go rather than to really put it under the microscope. These Fee shifting statutes also lead to payments to states and payments from states. A recent case, Montana, the state of Montana had to pay over two hundred thousand dollars after being sued under the Endangered Species Act. One of the other statutes, uh this, the energy conservation statute resulted in a fee award to the Massachusetts Attorney General from uh the federal government. So what we have we have is a is a very different incentive structure for these two types of statutes. Although we do have some common problems. We have projects that are really need to get, need to get accomplished that are, um, that are blocked by these lawsuits, like the Walton Lake Campground in Central Oregon, where you had trees rotting that were gonna fall on campers, and it was hung up in litigation for years. This was, I believe, in the Ochoco National Forest. You also have the problem of groups taking control of agency priorities and budgets. There was uh something called the bio-blitz, where agency or environmental groups petitioned for listing of something on the order of eight hundred species, and essentially took control of the fish and wildlife uh services budget and policy priorities. So there's some there's some real questions about whether these statues as being interpreted in the courts, are serving congressional purposes, plus the fact that if they are conserving congressional purposes, are they the right ones? You know, the question is, do we need the incentives to bring it environmental litigation that might have been needed or at least perceived to be needed in the nineteen seventies? I would submit that that's w- that's worth looking worth looking into for consideration. i really appreciate the opportunity to appear before you today and look forward to your questions.

i think this is five first five minutes now i'm gonna recognize members on the dais. i'll start by mister from Minnesota, if you're recognized.

uh thank you very much, chair Gossard. uh mister brown in your written testimony you outlined the business model that environmental ngos and so-called conservationist organizations have perfected to push their irresponsible agendas. One of these groups, the Center for Biological Diversity, has used this business model to help defeat important mining projects in northern Minnesota. In fact, in May of twenty twenty one, the Center for Biological Diversity entered into a settlement agreement with the Biden administration which blocked the responsible development of critical minerals in northern Minnesota. As part of this settlement agreement, the federal government awarded twenty five thousand dollars in taxpayer funding to the Center for Biological Diversity to help cover the legal bills. Not only were the hard-working men and women of northern Minnesota stopped from responsibly developing these vast natural resources, but they also had to foot the legal bill with their own hard-earned tax dollars. Mr. Braun, is the business model that the Center for Biological Diversity and other groups are using serving the American people?

Thank you for the question, Representative. Um, as I said in my remarks, I I think, um, this whole movement has gone horribly astray. over the last couple of decades. Um, it used to be about protecting the things we wanted to protect, land creatures. Now it is, seems to be you can look at and center for biological diversity as an example, promotes these wind turbines and solar panels that take up lots of space to give, you know, unreliable energy sources. And um, you know, if we, if we got back to a conservation movement that was pro-energy, um, that would be a better business model.

Uh, you also discussed how EJA is being applied unevenly, favoring certain repeat litigants or certain practice areas over others. What reforms should Congress consider to restore neutrality to EJA and ensure equal treatment under the law?

I would defer questions on that to any of the other three panelists who are, uh, who are all lawyers and litigate in this space. Um, I would, however, just as a general principle, be as transparent as possible. And and if you're collecting these funds, put them on your website prominently and explain where you got the money from, and put them in your nine nineties. I mean, those are just ideas off the top of my head, but there there has to be some ways for better transparency. Uh, that may aim toward um legislative remedies that you all would decide on.

And that leads to my next uh question, Mister Feit, uh in your written testimony you note that the federal government stopped keeping track of EGIA payments in nineteen ninety five as a cost saving measure. Can you help me reason with that? How is that saving American taxpayers?

That's a that's a great question. I I would argue that it did not save American taxpayers money because if you know where the money is going, then you can keep oversight on it and keep control. And that that was lost for a number of years. the Dingell Act, which passed in twenty nineteen, re- re-establish those uh reporting requirements. And there is some reporting on the judgment fund, but we also don't have reporting on other fee shifting arrangements, so where private parties are sued or, as I was talking about, you have a state that gets sued. Um, but I think it's it's really important to have that information out there.

So would you agree that that this lack of transparency has allowed not only for Egypt to grow over the past several decades?

It it's a it's a really uh big concern. We don't know how much is being paid out, what the effects are on agency budgets, and you know it and again, it's the taxpayers' money at the end of the day.

In recent uh cases, courts have awarded rates of roughly four hundred and seventy dollars per hour in environmental cases. sometimes nearly twice the EGIC cap of two hundred and fifty-eight dollars per hour that you referenced in your testimony. What safeguards exist to ensure taxpayers are not effectively subsidizing one category of repeat litigants at premium market rates based on uh judge made carve outs?

Uh, at this point, sir, there are there are really no such safeguards in this statute. Uh, certainly that could be a a productive area to examine and look for. when when the EJA cap should be exceeded because I think the EJA when it was enacted, the idea was provide a fair recovery and not a windfall. And I I would submit that the current cap comes pretty close to that in most markets.

Thank you. Uh, Mister Chair, before I yield back, I ask unanimous consent that the May tenth, twenty twenty-one settlement agreement between the Department of Justice, under the Biden administration, and the Center for Biological Diversity, in which the Center for Biological Diversity was awarded twenty-five thousand dollars in taxpayer funding to stop the Twin Medals Project in northern Minnesota be entered into the hearing record.

Objection so heard.

Thank you.

I thank the gentleman, the gentleman from California, Mister Hoffman, is recognized for his violence.

Thank you. Thank you, Mister Chairman. Right now, American families all over this country are opening their electrical bills and wondering how they're gonna pay them. New wind and solar projects were on track to deliver relief in the form of affordable, clean power for millions of American households. Donald Trump and his energy jar, czar uh Doug Burgum, have done everything they can to kill that relief. And then they did something that I think most Americans will really find quite hard to believe. They handed nearly a billion dollars of taxpayer money to a French energy company to make sure those wind projects stayed dead. It was such a gift, such a windfall that this French company almost didn't even know what to do with the money. And so the day after they got paid, they announced a one point five billion dollar stock buy-back for their shareholders. Now Congress created the judgment fund to pay real court judgments against the United States, as well as to settle actual or imminent litigation. It's not a political slush fund, was never intended to support this administration's unpopular and radical anti-wind vendetta. So, uh, Mister Ahn, uh, in your view, was Secretary Burgum's use of the judgment fund in this case legal?

It increases litigation risk, Congressman. And that's the the irony of all this, that settlement is often used to resolve uh litigation risk in amongst all the parties. Yet, there are a number of ways in which the scale of the judgment fund and how it's being used, really ends up creating questions around what was the administrative record around this? Was the action itself arbitrary and capricious? So, the, it can be very much challenged in court.