Gateway funding can't be blocked over DEI policy, judge rules

Gateway Development Commission

The Gateway project should be permanently safe from last year's Trump administration attempt to strip its funding, according to a federal court ruling on this week.

The project's centerpiece is a new, two-tube rail tunnel under the Hudson River, where the state of the existing century-old tunnel linking New York in New Jersey is a major cause of concern.

When President Trump returned to office, his administration attempted to pull already agreed upon federal funding, saying contracting processes accommodated women- and minority-owned contractors.

That was a flagrant violation of federal law, according to Judge Jeannette Vargas of the U.S. District Court for the Southern District of New York. 

"Defendants make no attempt to justify their actions as consistent with the governing federal regulations. They have therefore waived any argument to the contrary," she wrote in a ruling Monday.

The lack of funds forced Gateway to halt construction on its $16 billion Hudson Tunnel Project earlier this year. A temporary court order forced the government to reinstate the funds in February, and Vargas's ruling supports that order. 

"This is the most important infrastructure project in the nation, and thanks to our litigation, 1,000 people are back on the job and construction continues every day. This victory sends a clear message: the Trump administration's attempt to halt Gateway funding will not stand," said a joint statement from the governors and attorneys general of New York and New Jersey.

Gateway's Hudson Tunnel Project will connect New York and New Jersey, reinforcing the country's rapidly-aging, busiest railway. Roughly 70% of the project's funding — around $12 billion — is set to come from the federal government. 

The saga started in September, when the DOT halted Gateway's disbursements as it reviewed Gateway's policies around minority and women-owned contractors. The department sent a similar notice to the New York Metropolitan Transportation Authority. Both the GDP and the MTA's policies were based on a federal mandate called the Disadvantaged Business Enterprise program. 

The MTA immediately sued and declared the funding freeze politically motivated — the DOT's notice came on the eve of a federal government shutdown, and President Donald Trump has repeatedly targeted New York's funding during his second term.

In early February, the Hudson Tunnel project had to halt construction. It resumed construction the same month, after a judge forced the federal government to reinstate the funding. 

In March, Gateway asked the courts to provide protection from future government attempts to pull its funding, but a judge ruled that request moot.

Vargas's ruling also criticized the DOT for its approach to halting funds. 

"DOT provided no opportunity for GDC to appeal the September 30 suspension," Vargas wrote in her ruling. "This is clearly contrary to law."

Vargas highlighted Trump's motivations in halting Gateway's funding.

She included statements from an interview Trump gave in October: "Russell Vought is really terminating tremendous numbers of Democrat projects. This is not only jobs; I mean the project in Manhattan – the project in New York. It's billions and billions of dollars that [Senate Minority Leader Chuck] Schumer has worked 20 years to get. It's terminated. . . .  It's terminated because the Democrats are so foolish . . . .  Right now, there is no funding – because it's up to me."