# Former Nebraska officials sue over Environmental Trust fund transfers  
**Published:** 2026-05-22T10:15:22.000Z  
**Source:** [Nebraska Examiner](https://nebraskaexaminer.com/2026/05/22/former-state-officials-sue-pillen-admin-over-alleged-misuse-of-nebraska-environmental-trust-funds/)  
**AI-generated:** yes (claude-haiku-4-5-20251001)  
**Canonical:** https://lincolne.news/article/former-nebraska-officials-sue-over-environmental-trust-fund-transfers

LINCOLN, Neb. — Two former state officials filed a lawsuit Thursday challenging what they characterize as unlawful transfers from the [Nebraska Environmental Trust](https://environmentaltrust.nebraska.gov/), alleging the Pillen administration and state treasurer improperly used lottery proceeds intended for environmental conservation to help balance the state budget.

The lawsuit, filed in Lancaster County District Court by Jon Oberg, former director of the Nebraska Department of Administrative Services, and W. Don Nelson, former chief of staff under Gov. Bob Kerrey, targets [a $13.5 million transfer made this year and a $15 million transfer in 2015](https://nebraskaexaminer.com/2026/05/22/former-state-officials-sue-pillen-admin-over-alleged-misuse-of-nebraska-environmental-trust-funds/), both used to address budget shortfalls and fund property tax relief.

"The sorry truth is that the state is playing a shell game to cover self-created budget gaps at the expense of the Trust's constitutionally-mandated conservation efforts," Oberg said in a statement. "The Trust is not a tool to solve our state's budget problems."

The Trust, created when Nebraska voters approved the state lottery in 1992, receives 44.5% of lottery proceeds—approximately $20 million annually in recent years. [The Trust has supported hundreds of projects that restore grasslands, wetlands, woodlands and rivers](https://greatplains.audubon.org/news/nebraskans-unite-protect-environmental-trust-funding), with [the organization providing close to $419 million in grants to more than 2,500 projects since 1992](https://nda.nebraska.gov/ag_contacts/env_trust.html).

The plaintiffs, represented by the American Civil Liberties Union of Nebraska and the Gutman Law Group, argue that a 2004 constitutional amendment guarantees a certain percentage of lottery funds be used exclusively for conservation through competitive grants. They cite a January statement from State Budget Director Neil Sullivan acknowledging the transfers were being used for "a balanced budget and additional property tax relief"—purposes they say violate the Trust's statutory mandate.

Some transferred funds were directed to the Game and Parks Commission for a marina expansion at Lewis & Clark Lake and to the Department of Water, Energy and Environment for water conservation projects. State officials argue these uses comply with the Trust's conservation mission, with a department spokeswoman stating the transfers protect "vital groundwater and surface water resources."

The lawsuit names Gov. Jim Pillen's budget and administrative services directors, State Treasurer Joey Spellerberg, and heads of the Department of Water, Energy and Environment and the Game and Parks Commission as defendants. This year, the governor proposed [transferring $40 million over two years from the Trust for the Lewis & Clark Lake marina project and water conservation initiatives](https://nebraskaexaminer.com/2026/01/24/pillen-increases-proposed-transfer-from-nebraska-environmental-trust/).

Nelson and Oberg have prior experience challenging Trust transfers. In 2020, their lawsuit forced the Trust's board to reverse a proposal that would have redirected $1.8 million from conservation projects to install ethanol blender pumps at Nebraska gas stations.

## Sources

- [Nebraska Examiner](https://nebraskaexaminer.com/2026/05/22/former-state-officials-sue-pillen-admin-over-alleged-misuse-of-nebraska-environmental-trust-funds/)
- [Nebraska Environmental Trust official website](https://environmentaltrust.nebraska.gov/)
- [Audubon Great Plains - Nebraskans Unite to Protect Environmental Trust Funding](https://greatplains.audubon.org/news/nebraskans-unite-protect-environmental-trust-funding)
- [Nebraska Department of Agriculture - Environmental Trust](https://nda.nebraska.gov/ag_contacts/env_trust.html)
- [Nebraska Examiner - Pillen increases proposed transfer from Nebraska Environmental Trust](https://nebraskaexaminer.com/2026/01/24/pillen-increases-proposed-transfer-from-nebraska-environmental-trust/)

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This article was generated by AI (claude-haiku-4-5-20251001) based on source material from Nebraska Examiner, enriched with 2 web searches. The original source is available at https://nebraskaexaminer.com/2026/05/22/former-state-officials-sue-pillen-admin-over-alleged-misuse-of-nebraska-environmental-trust-funds/.