A nonprofit organization, awarded nearly $7 billion under the Biden administration for clean energy initiatives, has initiated legal proceedings against the Environmental Protection Agency (EPA) under the direction of former President Donald Trump. The lawsuit contends that the EPA unlawfully froze a legally sanctioned grant.
The Climate United Fund, an alliance composed of three nonprofit entities, is demanding access to a Citibank account provided under the Greenhouse Gas Reduction Fund. This fund, instituted through the 2022 bipartisan Inflation Reduction Act and known as the green bank, aims to foster environmentally conscious projects. The freeze potentially jeopardizes the group’s capacity to offer loans or remunerate employees, as they highlighted in the legal documents submitted.
“The collective actions by Citibank and the EPA essentially annul a program legislated and financially supported by Congress,” noted Climate United in their court petition on Monday.
Back in April, then-Vice President Kamala Harris announced that the EPA had selected eight organizations, including Maryland’s Climate United, to be beneficiaries of a $20 billion allocation aimed at combating climate change and advancing environmental justice. This financial commitment was finalized in August.
Despite its support among Democratic lawmakers, the green bank was instantly met with skepticism from Republicans, who dismissed it as an uncontrolled “slush fund.” This claim was robustly refuted by former EPA Administrator Michael Regan.
The program soon became a target for EPA Administrator Lee Zeldin, appointed to the role in late January. Zeldin declared through a social media video that the administration would be rescinding contracts related to the emerging program. He referred to an undercover video from a conservative journalist, alleging wasteful expenditure by the EPA. Using the metaphor “gold bars off the Titanic,” Zeldin accused the program’s participants of financial mismanagement.
The lawsuit explains that Citibank disabled access to the Climate United’s account on February 18, a decision only clarified after a delay. During this interval, Zeldin vocally accused Climate United and similar groups of misconduct, culminating in an announcement that funds had been frozen. Climate United claims the EPA has denied requests to engage in dialogue over the issue.
Democratic lawmakers quickly criticized Zeldin’s actions against the green bank. Senators Chris Van Hollen from Maryland, Ed Markey from Massachusetts, and Representative Debbie Dingell from Michigan expressed their disapproval in a joint statement, citing the investigation and funding freeze as groundless. All three Democrats were instrumental in advocating for the establishment of the green bank.
Citibank has stated it is examining the legal complaint. The bank previously asserted, “Citi has been cooperating with the federal government regarding concerns about this federal grant program,” reaffirming its role as a financial agent without any discretion over fund allocation. The bank also emphasized its compliance with judicial rulings.
The EPA kept silent on the matter due to ongoing legal proceedings. The court filings by Climate United mentioned the resignation of a former prosecutor from the U.S. Attorney’s Office in Washington. The former prosecutor reportedly hesitated to fulfill requests from top Trump administration officials to freeze the group’s financial assets.
Zeldin addressed concerns in a correspondence to the EPA’s inspector about using Citibank to manage the funds—a setup that, he argued, allowed grant recipients to act merely as intermediaries, which in his opinion, compromised transparency. Zeldin further expressed skepticism over the credentials of certain entities managing the grants, noting some affiliations with Democratic politics and figures such as Stacey Abrams, former gubernatorial candidate in Georgia. President Trump also criticized Abrams over her connections to the green bank during his recent Congressional address.
Responding to Zeldin’s assertions, Climate United, in a letter dated March 4, refuted the allegations. They underscored that their extensive application process is accessible to the public and authenticated by the EPA’s exhaustive selection criteria, maintaining that their expenses remain transparent.
Beyond Climate United, the newly established fund has also financed other nonprofits, including the Coalition for Green Capital, Power Forward Communities, Opportunity Finance Network, Inclusiv, and the Justice Climate Fund, which have collaborated with diverse partners such as Rewiring America, Habitat for Humanity, and the Community Preservation Corporation.
The EPA’s prior inspector general advocated for increased oversight of the green bank initiative. “The swift program implementation and narrow timeframe for utilizing a substantial fund amount could propel the EPA to expend the funds without establishing sufficient internal controls to alleviate the risk of fraud, waste, and abuse,” inspected general Sean O’Donnell informed Congress in 2023. O’Donnell was among more than a dozen inspectors general dismissed by Trump in January.
The acting Inspector General, Nicole Murley, has announced her intention to investigate the Greenhouse Gas Reduction Fund comprehensively.
