The US government has taken a significant step in its efforts to reclaim climate funding, with the FBI, EPA, and Treasury Department requesting Citibank to freeze accounts of several nonprofits and state government agencies. The accounts in question were recipients of the $27 billion Greenhouse Gas Reduction Fund, established by the Inflation Reduction Act in 2022.

The Greenhouse Gas Reduction Fund provides grants to green banks, which in turn offer financing for clean technology projects across the country. Startups with scalable technologies are eligible to receive financing, with the majority of the funding allocated for loans that are to be repaid and recycled for future lending.

Citibank, selected as the financial agent to administer the funds, has been instructed to place 30-day administrative freezes on the accounts of nonprofits that received green bank funding. The bank has also been asked to freeze accounts of other nonprofits and state government agencies, including Habitat for Humanity, United Way, and the Colorado Clean Energy Fund.

Three nonprofits that received green bank funds have filed a lawsuit against Citibank, requesting the release of the frozen money. EPA administrator Lee Zeldin has expressed concerns over potential fraud, although no evidence has been provided to support these claims.

Background

The Inflation Reduction Act, passed by Congress in 2022, allocated $27 billion for the Greenhouse Gas Reduction Fund. The EPA received $14 billion for the National Clean Investment Fund, which provides grants to green banks. Citibank was announced as the financial agent to administer the funds in April 2024.