The Trump administration has frozen $20 billion in climate funds amid an FBI investigation into possible criminal activity, sparking lawsuits from recipient organizations and accusations of political manipulation.
At a Glance
- Citibank has been instructed by the EPA and Treasury Department to pause all disbursements from the $20 billion Greenhouse Gas Reduction Fund
- The FBI has requested a 30-day freeze on the funds while investigating alleged criminal violations
- EPA Administrator Lee Zeldin has called for all funds to be reclaimed, calling it a “significant day for deregulation”
- Several climate organizations have sued Citibank for breach of contract over the withheld funds
- Senator Sheldon Whitehouse has accused the EPA of “misusing law enforcement” to serve Trump’s political interests
Biden’s Last-Minute Climate Billions Under Scrutiny
In what appears to be yet another example of the previous administration’s eleventh-hour attempts to lock in spending before leaving office, a massive $20 billion climate fund established during Biden’s final days has been frozen pending criminal investigation. The Greenhouse Gas Reduction Fund, part of Biden’s massive Inflation Reduction Act which allocated $27 billion for “clean energy investments,” has come under intense scrutiny from the Trump administration. The fund was established during the final week of President Biden’s term and has remained inactive since President Trump took office.
The Environmental Protection Agency and Department of Treasury have instructed Citibank, which holds the funds, to pause all further disbursements. Citibank counsel K. Winn Allen confirmed the bank’s cooperation, stating the funds are “subject to an ongoing criminal investigation.” The FBI has specifically requested that the financial institution freeze disbursements for at least 30 days while they investigate possible criminal violations related to the fund’s creation and intended distribution channels.
NEW: The top criminal prosecutor at the Washington, D.C. US Attorney’s Office, Denise Cheung, has resigned after the Trump administration requested she investigate and freeze funding related to climate spending under the Biden administration, according to CNN.
“Earlier… pic.twitter.com/goI3l5UrkE
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Questions About Fund Recipients and Management
According to reports, the money was set to be distributed through eight politically connected non-governmental organizations, some of which appear to have been recently created and may lack proper qualifications for managing billions in taxpayer dollars. This revelation raises serious questions about whether the fund was genuinely intended for environmental purposes or was simply a mechanism to channel federal money to favored political allies before the administration change.
“Citibank has … only done its best to serve its customers while following instructions from the government of the United States, to whom Citibank owes a duty of loyalty and at whose direction Citibank is contractually obligated to act”
Some recipients have already received portions of the funds, including the Coalition for Green Capital and the Climate United Fund. These organizations and others, such as Power Forward Communities, have now sued Citibank for breach of contract over the withheld funds. Climate United has claimed the freeze is harming Americans and delaying critical programs, while also accusing the EPA of unlawfully terminating their grant agreement. A court hearing has been scheduled to potentially reveal specific misconduct allegations against Climate United.
Democrats Cry Foul Over Investigation
Predictably, some Democratic lawmakers have rushed to defend the massive last-minute spending package. Senator Sheldon Whitehouse has gone so far as to accuse the EPA of “misusing law enforcement” to recover the climate funds, alleging the criminal investigation is merely a pretext to interfere with the fund’s operation. Whitehouse has demanded information from Attorney General Pam Bondi and FBI Director Kash Patel about the investigation, characterizing the administration’s actions as serving “vindictive political whims.”
EPA Administrator Lee Zeldin, who has been a strong advocate for reclaiming the funds, described the situation as a “significant day for deregulation in U.S. history.” The EPA’s inspector general has launched their own investigation into the fund’s creation and management. Meanwhile, Citibank maintains it is simply following government instructions and is contractually obligated to act at the government’s direction, placing the bank in the awkward position of being sued by fund recipients while complying with federal directives.
