A nonprofit organization named Climate United Fund has filed a lawsuit against the Environmental Protection Agency (EPA) under the Trump administration, claiming that it unlawfully froze access to a nearly $7 billion grant awarded for clean energy initiatives. The lawsuit stresses that the freezing of the funds jeopardizes Climate United's ability to issue loans and even pay its staff. The funds were allocated through the Greenhouse Gas Reduction Fund, established in 2022 by the Inflation Reduction Act, commonly referred to as the green bank.
Climate United Fund, a coalition of three nonprofit groups, was among eight selected by then-Vice President Kamala Harris in April 2023 to receive a total of $20 billion intended for various projects aimed at combating climate change and enhancing environmental justice. The formal awarding of these funds took place in August 2023. However, the green bank has faced significant criticism from Republican lawmakers, branding it as an unaccountable "slush fund," a claim that former EPA Administrator Michael Regan has strongly contested.
The recent concerns surrounding the green bank intensified with the appointment of EPA Administrator Lee Zeldin in late January 2024, who publicly criticized the program and suggested that the EPA would revoke grant contracts. He cited a controversial undercover video, which portrayed comments from a former EPA official indicating that the agency was irresponsibly spending funds. Zeldin has frequently referred to the grants as "gold bars," alluding to alleged misconduct and fraud among the recipients of the Greenhouse Gas Reduction Fund.
According to the lawsuit filed in federal court, on February 18, 2024, Citibank, which manages Climate United’s bank account, cut off access to the account—an action that went unexplained for several weeks. This occurred in the backdrop of Zeldin’s accusations against Climate United and other organizations regarding potential misconduct and his eventual announcement of the funding freeze. The EPA has reportedly refused Climate United’s request for a meeting to discuss the matter.
Several Democratic lawmakers have condemned Zeldin’s claims, asserting that they are unfounded and have led to unwarranted investigations and an unjust freeze of funds. Senators Chris Van Hollen and Ed Markey from Maryland and Representative Debbie Dingell from Michigan issued statements criticizing the Trump administration's damaging actions against the Greenhouse Gas Reduction Fund, which they supported creating.
Citibank, in response to the lawsuit, announced that it was reviewing the allegations and reiterated its role as a financial agent, stating that it has no discretion over fund allocation. The bank emphasized its commitment to comply with any judicial decision regarding the issue. The EPA, citing the ongoing litigation, has declined to comment further.
In its court filing, Climate United pointed out that a former prosecutor from the U.S. Attorney’s Office in Washington had resigned rather than comply with demands from top Trump administration officials to freeze the organization’s assets. Zeldin has raised questions about the EPA's use of Citibank for fund management, suggesting that it lacks transparency and undermines the rigorous selection process that was used to award the grants.
Climate United has contested Zeldin’s allegations, stating that their application materials are publicly accessible and that the EPA employed a thorough selection process. Apart from Climate United, other nonprofits that received funding from the program include the Coalition for Green Capital and Power Forward Communities, among others, all of which aim to partner with various groups to tackle environmental issues.
The situation surrounding the green bank has prompted regulatory concerns. A former EPA inspector general noted the rapid implementation of the program, warning that it could lead to potential fraud, waste, and abuse if not properly managed. This concern has been echoed by the acting inspector general, who is currently investigating the Greenhouse Gas Reduction Fund.
