FBI, EPA, and Treasury demand Citibank freeze funds in Trump's climate money crackdown

Citibank Freezes Accounts of Nonprofits and State Agencies at FBI Request

Citibank recently disclosed in court filings that several government agencies, including the FBI, the EPA, and the Treasury Department, have asked the bank to freeze accounts belonging to various nonprofits and state government agencies. These accounts were frozen back in February, but new documents have now revealed more information about the situation, such as a full list of the nonprofits being scrutinized by the FBI.

The funds in question were distributed as part of the $27 billion Greenhouse Gas Reduction Fund, established by the Inflation Reduction Act of 2022. The EPA received $14 billion from this fund to support the National Clean Investment Fund, which offers grants to green banks dedicated to financing clean technology projects across the nation.

Green banks play a crucial role in providing financial support to startups with scalable clean technology projects. The funding from the Greenhouse Gas Reduction Fund was primarily designated for loans, with the intention that the funds would be repaid and reinvested for future lending activities. It is worth noting that green banks typically maintain delinquency rates comparable to those of commercial and residential portfolios held by traditional lenders.

Citibank was appointed as the financial administrator responsible for managing the allocated funds, holding them in accounts under the names of the grant recipients. Additionally, Citibank is overseeing a separate $6 billion Clean Communities Investment Accelerator program. The contract between Citibank and the EPA was publicly announced in April 2024.

In response to the FBI’s request, Citibank has imposed 30-day administrative freezes on accounts held by the targeted nonprofits, including well-known organizations like Habitat for Humanity, United Way, the Colorado Clean Energy Fund, and the New York State Department of Taxation and Finance. Three nonprofits that received funding from the green bank have taken legal action against Citibank, seeking the release of the frozen funds.

EPA administrator Lee Zeldin has expressed reservations about the Greenhouse Gas Reduction Fund, citing concerns about potential fraud. However, he has yet to provide concrete evidence to support these claims. During a recent court hearing, Judge Tanya Chutkan raised questions about the legality and validity of the grant, emphasizing the need for credible evidence to substantiate any allegations of fraud or misconduct.

Stay tuned for further updates on this developing story.