A second nonprofit has filed a lawsuit against Citibank to unlock climate funding awarded through the EPA’s multibillion-dollar green bank initiative.
The Coalition for Green Capital sued the bank Monday for allegedly violating its terms with the federal government by barring access to its accounts and those of 19 smaller groups that it lends money to. The move escalates a legal fight over the Trump administration’s decision to halt funding to a $14 billion clean energy finance program created under the Inflation Reduction Act. Citibank oversees the account holding the money and is under pressure by the Trump administration to return the money.
“Citi’s actions have blocked CGC from deploying funds appropriated by Congress for energy projects to lower electricity costs and provide clean air and water for all Americans,” said a spokesperson for CGC, which was awarded $5 billion last year under EPA’s National Clean Investment Fund program. “CGC is seeking a court order compelling Citi to release the funds and honor its contractual obligations.”
The suit came two days after Climate United, the largest group awarded funds under the same program, filed suit Saturday against EPA and Citibank for withholding the funds and failing to explain why the money was frozen Feb. 18. Climate United followed that Monday by asking the court to order EPA and the bank to immediately release the funds while litigation continues. The lawsuit filed Monday by CGC did not name EPA as a defendant.
EPA Administrator Lee Zeldin has for weeks been targeting CGC and seven other nonprofits as part of his effort to take back billions of dollars awarded through the Greenhouse Gas Reduction Fund. He has claimed without providing evidence that the program is afflicted by fraud, a legal threshold that program supporters say would be needed for the administration to claw back the money from Citibank.
Citibank said it had been working with the federal government to allay the administration’s concerns about the grant program. “Our role as financial agent does not involve any discretion over which organizations receive grant funds,” said a spokesperson for the bank. “Citi will of course comply with any judicial decision.”
The lawsuit was filed in the U.S. District Court for the Southern District of New York, where Citibank is headquartered.
