Climate group sues Trump admin, Citibank over $7 billion in frozen funds

A climate group awarded $7 billion in federal grants for climate and housing projects has sued the Trump administration and Citibank, alleging unlawful withholding of funds. 

The investment fund Climate United claims it has not received the funds it was supposed to get from the Environmental Protection Agency’s (EPA) Greenhouse Gas Reduction Fund and has not been given an explanation from the agency or CitiBank, per Politico.

The lawsuit, filed in the US District Court for the District of Columbia, seeks an injunction to force Citibank to release the funds and prevent the EPA from interfering. It argues that the EPA violated the Administrative Procedure Act and says the suspension of the funds is arbitrary and an abuse of discretion. It further claims that EPA Administrator Lee Zeldin violated the Fifth Amendment’s due process clause. Zeldin has referred to the climate program as a “green slush fund.”

“EPA has failed to provide Climate United with a reasoned explanation for its actions or a meaningful opportunity to object or to be heard,” the suit claimed. Further, the lawsuit accuses Citibank of breaking its contract for failing to disperse grant funds. 

Citibank spokesperson Mark Costiglio stated the bank has been cooperating with the government’s concerns about the grant program and will comply with any judicial ruling.

“[CityBank] has been working with the federal government in its efforts to address government officials’ concerns regarding this federal grant program. Our role as financial agent does not involve any discretion over which organizations receive grant funds. Citi will of course comply with any judicial decision,” Costiglio said.

The lawsuit follows reports that the Justice Department is investigating climate grants and has ordered recipients to testify in court later this month. The $7 billion was intended for electric vehicle charging infrastructure and renewable energy projects. Climate United claims it lacks alternative funding sources and may have to cut staff and reduce operations if the money remains frozen.