WASHINGTON – The Environmental Protection Agency has terminated grant agreements worth $20 billion issued by the Biden administration under a so-called green bank to finance clean energy and climate-friendly projects.
The action comes weeks after the EPA froze the grants, which EPA Administrator Lee Zeldin has characterized as a “gold bar” scheme marred by conflicts of interest and potential fraud.
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“Twenty billion of your tax dollars were parked at an outside financial institution, in a deliberate effort to limit government oversight — doling out your money through just eight pass-through, politically connected, unqualified and in some cases brand-new" nonprofit organizations, Zeldin said in a video shared Tuesday night.
The grants “raise significant concerns and pose unacceptable risk,'' Zeldin added. “The only way we can reduce waste, increase oversight and meet the intent of the law as it was written is by terminating these grants."
The terminations come as three of the nonprofit groups that received grants have filed lawsuits challenging the funding freeze ordered by the EPA. A hearing for one of the lawsuits is scheduled Wednesday in U.S. District Court.
Maryland-based Climate United Fund said the EPA and Citibank illegally denied the group access to $7 billion awarded last year through the Greenhouse Gas Reduction Fund, a Biden administration program created in 2022 by the Inflation Reduction Act and more commonly known as the 'green bank.' The freeze threatens the group's ability to issue loans and even pay employees, Climate United said.
Two other nonprofits, the Coalition for Green Capital and Power Forward Communities, have also sued Citibank in recent days, alleging that the bank improperly froze an additional $7 billion to finance climate-friendly projects for housing, low-cost electricity, clean air and water.
The three nonprofits are among eight groups tapped last year by then-EPA Administrator Michael Regan to receive $20 billion to finance tens of thousands of projects to fight climate change and promote environmental justice. The money was formally awarded in August.
While favored by congressional Democrats, the green bank drew immediate criticism from Republicans, who routinely denounced it as an unaccountable “slush fund.″ Regan sharply disputed that claim.
Zeldin, who was confirmed as EPA head in late January, quickly targeted the green bank as an example of Biden-era overreach. In a video posted last month on X, Zeldin said the EPA would revoke contracts for the still-emerging bank. Zeldin cited a conservative journalist’s undercover video made late last year that showed a former EPA employee saying the agency was throwing “gold bars off the Titanic” — presumably a reference to spending before the start of Trump’s second term.
“Not only does EPA have full authority to take this action, but frankly, we were left with no other option,'' Zeldin said in the new video. “This termination is based on substantial concerns regarding program integrity, objections to the award process, programmatic fraud, waste and abuse, and misalignment with the agency’s priorities."
Democrats defended the bank program and accused Zeldin of acting without legal authority or evidence of wrongdoing.
“Without a shred of evidence, Administrator Zeldin is escalating his unfounded attempts to unilaterally terminate congressionally authorized and contractually obligated funding that would lower household energy costs, spur economic growth and cut pollution," said Rhode Island Sen. Sheldon Whitehouse, the top Democrat on the Senate Environment and Public Works Committee.
Whitehouse called Zeldin's efforts to block the green bank “a blatant giveaway to the fossil fuel megadonors who bankrolled" President Donald Trump’s campaign.
Zeldin's actions “will drive up energy costs, deepen our reliance on foreign oil and worsen climate change," Whitehouse said, accusing Zeldin of continuing what he called the Trump administration's “lawlessness and disdain for the Constitution."
Separately, Whitehouse challenged a criminal investigation into the Greenhouse Gas Reduction Fund by the Justice Department and FBI.
“Without a true basis to interfere with these properly appropriated and obligated funds, it appears you reverted to a pretextual criminal investigation to provide an alternative excuse to interfere,” Whitehouse wrote in a letter to Attorney General Pam Bondi and FBI Director Kash Patel.