WASHINGTON – A nonprofit that was awarded practically $7 billion by the Biden administration to finance clear power and climate-friendly tasks has sued President Donald Trump’s Environmental Safety Company, accusing it of improperly freezing a legally awarded grant.
Local weather United Fund, a coalition of three nonprofit teams, demanded entry to a Citibank account it obtained by means of the Greenhouse Gasoline Discount Fund, a program created in 2022 by the bipartisan Inflation Reduction Act and extra generally often known as the inexperienced financial institution. The freeze threatens its means to subject loans and even pay workers, he group stated.
“The mixed actions of Citibank and EPA successfully nullify a congressionally mandated and funded program,” Local weather United wrote in a Monday court docket submitting.
Final April, then-Vice President Kamala Harris introduced that EPA had chosen eight teams, together with Maryland-based Local weather United, to obtain $20 billion to finance tens of thousands of projects to battle local weather change and promote environmental justice. The cash was formally awarded in August.
Whereas favored by congressional Democrats, the inexperienced financial institution drew rapid criticism from Republicans, who routinely denounced it as an unaccountable “slush fund.” Former EPA Administrator Michael Regan sharply disputed that claim.
The financial institution was rapidly focused by EPA Administrator Lee Zeldin, who was confirmed to the position in late January. In a video posted on X, Zeldin stated the EPA would revoke contracts for the still-emerging program. Zeldin cited a conservative journalist’s undercover video made late final 12 months that confirmed a former EPA worker saying the company was throwing “gold bars off the Titanic” – presumably a reference to spending earlier than the beginning of Trump’s second time period.
Zeldin has repeatedly used the time period “gold bars” to accuse the Greenhouse Gasoline Discount Fund’s recipients of misconduct, waste and potential fraud.
Based on the lawsuit filed in federal court docket, Citibank reduce off entry to Local weather United’s checking account on February 18 — an motion the financial institution didn’t clarify for weeks.
The cutoff passed off as Zeldin made a number of public appearances accusing Local weather United and different teams of misconduct, finally asserting that the funds have been frozen, based on the lawsuit. Local weather United stated the EPA has refused to satisfy with the group.
A number of Democratic lawmakers slammed Zeldin’s assaults on the inexperienced financial institution.
“The Trump administration’s malicious and unfounded assaults on the Greenhouse Gasoline Discount Fund have resulted in a sham investigation and unsubstantiated funding freeze,” Maryland Sen. Chris Van Hollen, Massachusetts Sen. Ed Markey and Michigan Rep. Debbie Dingell stated in a press release. The three Democrats pushed for creation of the inexperienced financial institution.
Citibank stated it was reviewing the lawsuit.
“As we’ve stated beforehand, Citi has been working with the federal authorities in its efforts to handle authorities officers’ issues relating to this federal grant program,” the financial institution stated in a press release Monday. “Our position as monetary agent doesn’t contain any discretion over which organizations obtain grant funds. Citi will after all adjust to any judicial determination.”
The EPA declined to remark, citing pending litigation.
In its court docket submitting, Local weather United pointed to the resignation of a former prosecutor within the U.S. Lawyer’s Washington workplace after refusing calls for from prime Trump administration officers to freeze the group’s property.
Zeldin raised questions in a letter to the company’s watchdog in regards to the EPA’s use of Citibank to carry the cash, a construction that allowed the eight entities for use as “move throughs” for eventual grant recipients. The method undermined transparency, Zeldin alleged.
He additionally questioned the {qualifications} of among the entities overseeing the grants and stated some have been affiliated with the Biden administration or Democratic politics, together with Stacey Abrams, a former Democratic nominee for Georgia governor. Trump singled out Abrams over her ties to the inexperienced financial institution in his address to Congress final week.
In a letter to EPA officers on March 4, Local weather United disputed Zeldin’s allegations. The group’s prolonged software materials is publicly out there and the EPA used a rigorous choice course of, Local weather United stated, including that its spending is clear.
Along with Local weather United, the brand new fund has awarded money to other nonprofits, together with the Coalition for Inexperienced Capital, Energy Ahead Communities, Alternative Finance Community, Inclusiv and the Justice Local weather Fund. These organizations have partnered with a spread of teams, together with Rewiring America, Habitat for Humanity and the Group Preservation Company.
The EPA’s former inspector normal had urged extra oversight of the green-bank program.
“The speedy implementation of this system, mixed with the comparatively slim window of availability for such a big quantity of funding, might lead the EPA to expend the funds with out absolutely establishing the inner controls that mitigate the chance of fraud, waste, and abuse,” then-inspector normal Sean O’Donnell advised Congress in 2023.
Trump fired O’Donnell in January, together with greater than a dozen different inspectors normal.
Performing Inspector Normal Nicole Murley has stated she is trying into the Greenhouse Gasoline Discount Fund.
__
Phillis reported from St. Louis.
___
The Related Press receives help from the Walton Household Basis for protection of water and environmental coverage. The AP is solely chargeable for all content material. For all of AP’s environmental protection, go to https://apnews.com/hub/climate-and-environment
Copyright 2025 The Related Press. All rights reserved. This materials might not be revealed, broadcast, rewritten or redistributed with out permission.
