Trump EPA aims to claw back $20B in ​‘green bank’ funds

The Trump administration is accusing the Biden-era ​“green bank” program of mismanaging $20 billion in funds — and now it wants to claw back the money, which is meant to help underserved groups access solar, heat pumps, EV charging, and other technologies that reduce planet-warming emissions and clean the air.

Under the Biden administration, the Environmental Protection Agency decided to place the $20 billion allocated to the green bank program — formally known as the Greenhouse Gas Reduction Fund — into a financial agency agreement, which puts federal funds in the custody of a private bank. The move was thought to have insulated the program from President Donald Trump’s ongoing assault on clean-energy funding.

But on Wednesday, EPA Administrator Lee Zeldin released a video on X in which he declared that decision improper. His evidence? A video publicized by Project Veritas, a right-wing group known for conducting smear campaigns and making accusations that it cannot back up with evidence.

“The days of irresponsibly shoveling boatloads of cash to far-left activist groups in the name of environmental justice and climate equity are over,” Zeldin said.

The federal green bank program was created by the Inflation Reduction Act to inject low-cost capital into climate and clean energy projects that private lenders tend to avoid, with the hope of spurring additional private investment. It is modeled after government and nonprofit green banks that have operated for years in 17 states with a focus on low-income and disadvantaged communities.

In April, the EPA picked eight nonprofit coalitions to act as the green banks administering the total of $20 billion in funding. Those coalitions have since issued financing for projects that include building solar installations for the University of Arkansas, lowering the cost of U.S.-built electric trucks for small freight companies and independent truckers, helping fund commercial property energy efficiency and clean energy upgrades, and reducing the expense of deploying electric school buses.

“This is opening up new investments in rural communities, in low-income communities, that do not pencil otherwise,” Zach Friedman, senior director of federal policy for nonprofit group Ceres, told Canary Media in a Thursday interview.

In Wednesday’s video, Zeldin claimed without evidence that the decision to put the $20 billion into a bank account not under EPA’s direct control was ​“purposefully designed to obligate all of the money in a rush job with reduced oversight.”

“The financial agent agreement with the bank needs to be instantly terminated, and the bank must immediately return all of the ​‘gold bars’ that the Biden administration tossed off the Titanic,” he said.

That last statement from Zeldin is a rephrasing of comments made by an EPA advisor under the Biden administration that were captured in a video posted by Project Veritas, which is notorious for surreptitiously recording individuals with the intent of discrediting organizations it targets. Project Veritas operatives often infiltrate organizations under false pretenses, and its recordings have spurred attacks on those groups by Republican lawmakers and right-wing media organizations. Until last week it was under investigation by the Justice Department for its alleged role in stealing the diary of former President Joe Biden’s daughter.

In the video, posted on X in December, the EPA advisor said that the Biden administration’s work to commit climate and clean energy funding before the Trump administration took power ​“feels like we’re on the Titanic and we’re throwing, like, gold bars off the edge.” He also said that the goal of that work was to protect that funding from the threat of the Trump administration ​“taking that money away.”

Those fears were prescient.

On his first day in office, Trump issued an executive order demanding that federal agencies halt all spending of funds authorized by Congress in the 2022 Inflation Reduction Act and the 2021 bipartisan infrastructure law, sparking multiple legal challenges and raising the specter of a constitutional crisis if the Trump administration continues to defy court orders.

In the past week, two separate federal judges have issued court orders demanding that the Trump administration resume the disbursement of funds. One of those judges ruled on Monday that the Trump administration had so far failed to comply with his order. On Tuesday, a federal appeals court rejected the Trump administration’s emergency appeal to overrule that judge’s order.

Despite these court decisions, multiple grant recipients have told Canary Media and other media outlets this week that they remain unable to access grant money. Others reported that they could draw funds from the EPA’s grant disbursement portal on Friday but then were unable to do so on Monday.

That freeze has affected access to legally obligated funds for hundreds of nonprofit groups, school districts, private companies, city and county governments, and other federal grant recipients.

Groups unable to draw on those funds have been forced to use their own money to pay contractors for work already underway to avoid breaching their contracts. Some have told their public- and private-sector partners to cancel or postpone ongoing work. Others have furloughed employees.

The EPA has shifted its rationale for withholding funding in the wake of court orders demanding a halt to the Trump administration’s actions.

In an EPA memo obtained by Canary Media last Thursday, Chad McIntosh, acting EPA deputy administrator, stated that the agency is looking into ​“several reports and investigations” that ​“have raised serious concerns with the implementation of certain grant programs and subsequent grant awards.” The memo’s sole citation of alleged impropriety was the same ​“gold bars” comment from the Project Veritas video.

In a Friday email obtained by Canary Media, the EPA’s Office of the Chief Financial Officer cited the acting deputy administrator’s memo in instructing EPA budget and planning staff that a long list of Inflation Reduction Act and bipartisan infrastructure law programs should be ​“temporarily paused,” pending a ​“review for compliance with applicable administrative rules and policies.”

In a Thursday email to Canary Media, the EPA stated that it has restored funding as of Friday afternoon in accordance with the court orders. But the statement added that EPA personnel had ​“identified certain grants programs as having potential inconsistencies with necessary financial and oversight procedural requirements or grant conditions of awards or programs.”

The Greenhouse Gas Reduction Fund’s $20 billion had largely been viewed as protected from the risk of Trump administration interference due to the financial agency agreement.

In a November interview, Reed Hundt, a former Federal Communications Commission chair under the Clinton administration and a longtime champion of green bank legislation, told Canary Media that the groups in charge of allocating the $20 billion all had ​“a contract with the government that tells us and our network partners what we must do. We have the money, and we’re going to fulfill the contract.” Hundt formerly led the Coalition for Green Capital, one of the recipients of the funds, and left that position in January.

It’s not clear how Zeldin might carry out his pledge to claw back the funds and ​“get them back inside of control of government as we pursue next steps.”

According to multiple individuals with knowledge of the matter who spoke to Canary Media and reporting from The Washington Post, the funds are held in an account controlled by Citigroup, the third-largest bank in the U.S. by assets. Zeldin did not name Citigroup in his video statement but said that ​“there is zero reason to suspect any wrongdoing by the bank.” Citigroup did not immediately respond to a request for comment.

Zeldin described the financial agency agreement for the $20 billion as a ​“scheme” that ​“was the first of its kind in EPA history.” The Treasury Department has used financial agents to provide services on its behalf since the passage of the National Bank Acts of 1863 and 1864. Financial agency agreements have also long been used in uncontroversial programs like the Treasury Department’s Electronic Federal Tax Payment System, which was launched in 1996.

Zeldin implied in his Wednesday video that the financial agency agreement for the Greenhouse Gas Reduction Fund had been hidden from public review, stating that ​“my awesome team at EPA has found the gold bars.”

But Zealan Hoover, former senior advisor and director of implementation at the EPA under the Biden administration, told The Washington Post on Wednesday that the agreement was developed ​“with extensive input from career staff at EPA and Treasury” and that the EPA’s Office of Inspector General was briefed ​“to ensure robust oversight systems were in place.”

An individual with knowledge of the program’s structure confirmed with Canary Media that it was reviewed and approved by career federal employees and disclosed to the Government Accountability Office and the EPA Office of Inspector General. The person, who requested anonymity to share internal information without fear of retribution, said Citigroup was selected through a competitive procurement process by the EPA and the Treasury Department and that awardees played no part in the decision-making process.

Zeldin said he intends to refer the matter to the EPA inspector general’s office and ​“work with the Justice Department.” The EPA currently has no inspector general, as the individuals holding those watchdog positions at the EPA and 16 other federal agencies were fired by Trump in his first week in office, an act that violates federal law and is being challenged in court.

The $20 billion from the Greenhouse Gas Reduction Fund is ​“going to be difficult, I think, for an EPA to come in and claw that back,” Michael Catanzaro, CEO of Republican lobbying firm CGCN Group and a former special assistant for domestic energy and environmental policy in the first Trump administration, said during a November panel discussion hosted by the law firm Norton Rose Fulbright. ​“I think you’re going to create some serious legal problems if you try to do that.”