Citibank revealed in court docket filings on Wednesday that the FBI, the EPA, the EPA inspector basic, and the Treasury Department have all requested that the financial institution freeze accounts of a number of nonprofits and state authorities businesses.
The accounts had been frozen in February, however the brand new paperwork make public particulars that had beforehand been unknown, together with a full record of the nonprofits underneath FBI scrutiny.
The funds had been disbursed as a part of the $27 billion Greenhouse Gas Reduction Fund, which was created by the Inflation Reduction Act, a regulation handed by Congress in 2022. Of that, the EPA obtained $14 billion for a National Clean Investment Fund, which gives grants to inexperienced banks.
Green banks use these funds to offer financing for clear know-how initiatives across the nation. Startups which have applied sciences which might be able to scale commercially had been eligible to obtain financing to make initiatives a actuality.
The funding was largely for use for loans, which had been to be paid again and recycled for future lending. Green banks are inclined to have delinquency charges on par with business and residential portfolios held by different business lenders.
Citibank was chosen because the monetary agent to manage that cash, holding it in accounts underneath the names of the awardees. It can be administering a separate, $6 billion Clean Communities Investment Accelerator program. The EPA’s contract with Citibank was publicly introduced in April 2024.
The FBI has requested that Citibank place 30-day administrative freezes on accounts held by nonprofits that had been recipients of the inexperienced financial institution funding. It additionally requested the financial institution to freeze different nonprofit and state authorities company accounts, together with Habitat for Humanity, United Way, the Colorado Clean Energy Fund, and New York State Department of Taxation and Finance.
Three nonprofits that obtained inexperienced financial institution funds have sued Citibank, asking the financial institution to launch the cash of their accounts.
EPA administrator Lee Zeldin has mentioned that the Greenhouse Gas Reduction Fund doesn’t align with the company’s priorities and that he has issues about fraud, although he has not offered proof to assist that declare.
In a listening to on Wednesday, a choose within the U.S. District Court for the District of Columbia questioned a Justice Department lawyer representing the EPA.
“Can you proffer any proof that [the grant] was unlawful, or proof of abuse or fraud or bribery — that any of that was improperly or unlawfully executed, aside from the truth that Mr. Zeldin doesn’t prefer it?” Judge Tanya Chutkan mentioned.
Judge Chutkan additionally ordered the Justice Department to offer the court docket with particulars in regards to the alleged fraud, “as a result of I don’t have the credible proof that’s required.”
Update 3/13/25: Added particulars from the Wednesday listening to.
