US EPA Freezes Billions of Dollars, Climate Group Files Lawsuit

The United States Environmental Protection Agency (EPA) has frozen the allocation of billions of dollars in funding to several non-profit organizations, including the Climate United Fund (CUF) and the Coalition for Green Capital (CGC).

As part of the Greenhouse Gas Reduction Fund, these funds, also known as “Green Banks,” were established under the Inflation Reduction Act passed by the bipartisan United States Congress in 2022 to support clean energy and climate-friendly initiatives.

Currently, CUF, which has received nearly $7 billion in funding, has filed a lawsuit against the EPA, accusing the agency of inappropriately freezing the funds. The group claims that the freeze has hindered its ability to issue loans and pay employee salaries.

Another organization, CGC, which has received $5 billion in assistance, filed a lawsuit against Citibank on Monday, March 10, alleging that the bank refused to disburse grants provided by the EPA, thus breaching their contract. In a statement, the organization said, “Citibank’s actions have hindered CGC’s utilization of funds allocated by Congress for energy projects, originally intended to lower electricity costs and provide clean air and water sources for all Americans.”

These two non-profit organizations were among the eight organizations designated by then EPA Administrator Michael Regan. The eight organizations were set to receive $20 billion, the so-called “Green Banks,” to finance tens of thousands of projects to address climate change and promote environmental justice. This funding was officially approved in August of last year.

While the “Green Banks” were favored by the Democratic Party in Congress, they immediately drew criticism from the Republican Party, which often condemns the bank as an irresponsible “slush fund.” Current EPA Administrator Lee Zeldin, who was confirmed to the position at the end of January, quickly shifted blame towards the bank, accusing recipients of the Greenhouse Gas Reduction Fund of improper conduct, waste, and potential fraudulent activities.

Zeldin raised concerns in a letter to the oversight agency about the EPA’s use of Citibank to hold funds, criticizing the structure that allows these eight entities to act as “pass throughs” for the ultimate fund recipients. Zeldin alleged that this process undermines transparency. He also questioned the qualifications of some entities overseeing the grants and suggested that some may have connections to the Biden administration or Democratic Party officials.

The EPA’s decision to freeze the funds has also faced criticism from Democratic members of Congress. They believe that the fund freeze is based on “false investigations,” “baseless” claims and argue that actions taken by the Trump administration will harm communities and lead to job losses.

The case is set to be heard in a hearing at the United States District Court for the District of Columbia on Wednesday, March 12.

(This article was referenced from an Associated Press report)