In Washington, a nonprofit alliance was awarded nearly $7 billion by the Biden administration to promote clean energy and climate-friendly projects but has taken legal action against President Donald Trump’s Environmental Protection Agency (EPA). They allege the agency improperly froze a grant that was legally allocated to them. The Climate United Fund, consisting of three nonprofits, is seeking access to a Citibank account provided through the Greenhouse Gas Reduction Fund. This fund, known as the green bank, was established by the bipartisan Inflation Reduction Act in 2022. The group claims that the freeze hinders its capacity to grant loans and pay its employees.
The organization declared that the actions of Citibank and the EPA negate a program funded and authorized by Congress. In another lawsuit, the Coalition for Green Capital, which obtained $5 billion from the same Biden-era program, accused Citibank of contract breach for not distributing the funds awarded by the EPA. The Washington-based group expressed that Citibank’s actions have prevented them from utilizing congressional funds for energy projects, intended to lower electricity costs and provide cleaner resources.
Both nonprofits are among eight organizations selected to receive $20 billion to support environmental justice and combat climate change. The funds were officially granted in August. Despite support from congressional Democrats, the green bank has faced Republican criticism as an unaccountable “slush fund,” a claim disputed by former EPA Administrator Michael Regan.
The grant program quickly became a target for current EPA Administrator Lee Zeldin, appointed in late January. In a video, Zeldin announced intentions to revoke contracts associated with the program, referencing a video from a conservative journalist in which an ex-EPA employee criticized agency spending. Zeldin frequently uses the phrase “gold bars” to suggest misconduct and waste among the Greenhouse Gas Reduction Fund’s beneficiaries.
According to the lawsuit filed in federal court, Citibank blocked Climate United from accessing their bank account on February 18, without providing an immediate explanation. The restriction coincided with Zeldin’s public criticism of Climate United and similar organizations, who were later informed about the fund freeze. Climate United claims the EPA has not engaged them for discussions.
Several Democratic lawmakers condemned Zeldin’s actions, describing them as an unwarranted probe and an unfounded funding blockage. They argued that these attacks could cost jobs, raise prices, and harm communities. The three Democrats who advocated for the program criticized Zeldin’s approach to the green bank.
Citibank responded to Climate United’s suit, asserting that they are coordinating with federal authorities to address concerns about the grant program, stating that their role as a financial agent doesn’t involve decisions over grant fund allocation. The EPA declined to comment due to the ongoing litigation, with a court hearing scheduled in the U.S. District Court for the District of Columbia.
In court documents, Climate United noted that Denise Cheung, a senior prosecutor, resigned after allegedly resisting pressure from top Trump administration officials to freeze the climate groups’ assets. Zeldin questioned the EPA’s arrangement of using Citibank to manage the funds, claiming the setup lacked transparency and linked some organizations with Democratic politics interests.
Climate United rebuffed Zeldin’s allegations, highlighting their application transparency and rigorous selection by the EPA. The fund has also supported other nonprofits including the Coalition for Green Capital, Power Forward Communities, and others allied with groups like Rewiring America and Habitat for Humanity.
A Columbia University expert criticized the Trump administration’s pursuit to retract already allocated funds, viewing the investigations as unjustified. Meanwhile, officials announced pulling $400 million from Columbia University, terminating grants over issues unrelated to climate efforts.