Trump Officials Block Biden Admin’s $20B Climate Fund Over Probe

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Trump administration freezes $20 billion Biden-era climate fund as FBI criminal investigation uncovers potential violations in the EPA’s Greenhouse Gas Reduction Fund distribution.

Key Takeaways

  • President Trump’s EPA and Treasury Department instructed Citibank to freeze disbursements from the $20 billion Greenhouse Gas Reduction Fund established during Biden’s presidency.
  • The FBI has requested a 30-day freeze on fund disbursements while investigating criminal violations related to the distribution process.
  • The fund was established during Biden’s final week in office and would have distributed money through eight politically connected NGOs.
  • Senator Sheldon Whitehouse has accused the EPA of fabricating a criminal investigation to reclaim the funds to serve Trump’s political interests.
  • Several climate fund recipients have sued Citibank for breach of contract over the withholding of funds.

Criminal Investigation Leads to Climate Fund Freeze

The Trump administration has taken decisive action by freezing a $20 billion climate fund that was established under the Biden administration through the Environmental Protection Agency. Citibank, which serves as the custodian of these funds, has confirmed it received instructions from both the EPA and the Department of Treasury to halt all further disbursements from the Greenhouse Gas Reduction Fund (GGRF). The fund freeze comes amid an ongoing FBI criminal investigation into potential violations related to how the money was being distributed to various environmental organizations.

The climate fund, which was part of Biden’s Inflation Reduction Act and included $27 billion for clean energy investments, was established during the final week of President Biden’s term and has remained inactive since President Trump took office. EPA Administrator Lee Zeldin has called for the funds to be reclaimed, citing concerns about the qualifications of recipient organizations and potential financial mismanagement. The agency’s inspector general has launched a separate investigation into the fund’s administration and distribution practices.

Political Controversy Surrounds Fund Freeze

Senator Sheldon Whitehouse has raised serious objections to the EPA’s actions, accusing the agency of “misusing law enforcement” to claw back climate funds to serve the Trump administration’s political agenda. In a formal request to Attorney General Pam Bondi and FBI Director Kash Patel, Whitehouse has demanded information about the criminal investigation into the GGRF, suggesting that the investigation may be a pretext to interfere with the fund after EPA Administrator Lee Zeldin falsely suggested financial mismanagement.

“Citibank has … only done its best to serve its customers while following instructions from the government of the United States, to whom Citibank owes a duty of loyalty and at whose direction Citibank is contractually obligated to act,” wrote K. Winn Allen.

The funds were intended to be distributed through eight Non-Governmental Organizations (NGOs), some of which were recently established. Critics within the Trump administration have questioned the qualifications and political connections of these organizations. Some disbursements had already been made prior to the freeze, including to the Climate United Fund and the Coalition for Green Capital, which are now at the center of the investigation for possible criminal violations.

Legal Battles Emerge Over Frozen Funds

Several intended recipients of the climate fund have filed lawsuits against Citibank for breach of contract over the withholding of funds. Power Forward Communities is among the organizations that have taken legal action, claiming that the freeze has caused significant harm to Americans by delaying critical climate programs. Climate United has accused the EPA of unlawfully terminating their grant agreement without proper justification or due process.

Citibank has maintained that it is simply following government instructions and is contractually obligated to act at the government’s direction. According to court documents, the FBI has requested that disbursements be frozen for at least 30 days while the investigation proceeds. A recent court hearing was held to potentially reveal the specific misconduct allegations against Climate United and other fund recipients, though the details of these allegations remain largely undisclosed pending the outcome of the investigation.

EPA Administrator Zeldin has described the situation as a significant day for deregulation in U.S. history, suggesting that the administration’s actions are part of a broader effort to reform environmental policy and spending. The outcome of the ongoing investigation and legal challenges will likely determine the ultimate fate of the $20 billion in climate funding that currently remains in limbo.

Sources:

  1. EPA accused of faking criminal investigation to claw back climate funds – Ars Technica
  2. Trump administration demands Citibank freeze Biden’s $20B climate slush fund due to criminal probe

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