Hours after a federal judge ordered Citibank to pay out as much as $625 million in federal climate grant money that had been frozen at the Trump administration’s request, an appeals court stayed the decision. The grant money was frozen again before any was sent to recipients.
It was another setback for nonprofit recipients of $20 billion in funds that were appropriated by Congress through the 2022 Inflation Reduction Act. The grants, which were part of the Environmental Protection Agency’s Greenhouse Gas Reduction Fund and are sometimes called “green bank” funds, were finalized before the November election, then frozen in mid-February at the request of the Trump administration.
Brooke Durham, a spokeswoman for Climate United, a nonprofit that had been awarded almost $7 billion and has sued the administration for access to the funds, said the organization plans to oppose the stay, in hopes of avoiding laying off employees because they can’t pay them. The earliest they could see any relief is next Friday, she said.
“If this freeze continues, we will continue to lose trust, lose projects, and lose capacity to operate,” said Beth Bafford, chief executive of Climate United.
Lee Zeldin, the administrator of the E.P.A., took aim at the Greenhouse Gas Reduction Fund soon after he took office. The $20 billion in grants add up to roughly double the agency’s budget in recent years.
Mr. Zeldin has suggested that aspects of the program were vulnerable to waste, fraud or abuse. He took issue with the Biden administration’s decision to hold the money in accounts at Citibank, suggesting the financial agreement limited government oversight. He also repeated conflict-of-interest claims made in various conservative media outlets, suggesting that funds were unfairly given to Biden administration allies.
Despite two investigations, the E.P.A. hasn’t offered concrete evidence to support its claims.
“Though repeatedly pressed on the issue, E.P.A. offers no rational explanation for why it suspended the grants,” wrote Judge Tanya Chutkan of the district court for the District of Columbia in her opinion. “Nor has E.P.A. offered any rational explanation for why it needed to cancel the grants to safeguard taxpayer resources.”
Judge Chutkan ordered that Citibank release funds that were “properly incurred before the mid-February suspension of plaintiffs’ funds.” But before any funds were released, an appeals court barred Citibank from disbursing any money.
In response to a request for comment, the E.P.A. said “we couldn’t be more confident in the merits of our appeal and will take every possible step to protect hard-earned taxpayer dollars.”
Citibank declined to comment.
Claire Brown covers climate change for The Times and writes for the Climate Forward newsletter.
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