Two weeks after their bank accounts were frozen amid a swirl of investigations by the Trump administration, nonprofit organizations that were supposed to receive $20 billion to help curb climate change are still unable to withdraw money, raising concerns about their ability to pay staff.
The accounts were frozen by Citibank, which holds the money, after Lee Zeldin, the Environmental Protection Agency administrator, suggested there was potential fraud and the F.B.I. and Department of Justice launched investigations. Those inquiries went forward despite the determination by a top federal prosecutor that there was not enough evidence to open a grand jury criminal probe.
“Citi was designated as the financial agent of the United States pursuant to the authority of the U.S. Treasury Department and has been working with the federal government in its efforts to address government officials’ concerns regarding this federal grant program,” the bank said in a statement. “Our role as financial agent does not involve any discretion over which organizations receive grant funds. Citi will of course comply with any binding instructions from the federal government.”
Mr. Zeldin has criticized the policy and the structure of the program that was created by Congress and run by the Biden administration. He called for the money to be returned to the federal government, but has presented no evidence that a crime has been committed. This week, he asked for a third, concurrent investigation by his agency’s acting inspector general.
Climate United, which received almost $7 billion under the program to distribute to other organizations, said Tuesday that it is struggling to make payroll, and individual project developers cannot withdraw the money they were promised.
“These relationships take many months to build and are in jeopardy if funding freezes continue,” said Brooke Durham, a Climate United spokeswoman.
On Tuesday, lawyers for Climate United asked the E.P.A. to justify its actions. In a letter to the agency, the lawyers detailed Climate United’s efforts to meet with E.P.A. representatives, adding that the agency canceled a Feb. 25 meeting after learning that Climate United’s lawyers would be present.
The Trump administration has for the last six weeks attempted to find malfeasance connected to the distribution of money from the Inflation Reduction Act, the Biden administration’s signature climate law. The law provides tax incentives for clean energy manufacturing, and also calls for the E.P.A. to issue billions of dollars worth of grants to states, tribes, nonprofit groups and others to reduce emissions from fossil fuels, the main driver of climate change.
Mr. Zeldin has taken particular aim at $20 billion obligated in April that came from a program called the Greenhouse Gas Reduction Fund, which is sometimes known by the shorthand “green bank” funding.
Under it, Congress required the E.P.A. to award grants to organizations that in turn would offer loans and grants to businesses, homeowners and others to spur clean energy across the country, particularly in low-income neighborhoods. Funds were held in Citibank accounts under the names of the grantees.
Former Vice President Kamala Harris was a champion of the program, calling it “the largest investment in financing for community-based climate projects in our nation’s history.”
The Trump administration has run into roadblocks in its efforts to claw back the funding. Denise Cheung, a top federal prosecutor in D.C., refused to order that Citibank freeze the funds, citing a lack of evidence of possible criminal activity.
Last month, she wrote in a letter, obtained by The New York Times, that she was asked to step down by the interim U.S. attorney in Washington, Ed Martin, after she determined there was not enough evidence to open a grand jury criminal investigation or to order a bank to freeze the accounts.
The Trump administration appears to be basing its portrayal of the program as somehow criminal on a hidden-camera video produced last year by Project Veritas, a right-wing group known for trying to entrap political opponents with covert recordings.
In the video, shot at a bar or restaurant toward the end of the Biden administration, Brent Efron, then an E.P.A. employee, is asked about his job by an unidentified male who gushed “amazing,” when Mr. Efron said he worked on climate change.
At one point in the video, Mr. Efron refers to “green banks,” which he tells the person covertly recording him are nonprofit institutions that make it more financially feasible to build renewable energy projects.
Project Veritas edited the video to then cut to a different part of their conversation in which Mr. Efron was describing how there was a rush to finish obligating funds that had been authorized by Congress before the Trump administration took office.
“It truly feels like we’re on the Titanic and we’re throwing like gold bars off the edge,” Mr. Efron said in the video.
Mr. Zeldin and other Trump officials now frequently invoke the “gold bars” phrase to suggest the prior administration was rushing to spend tax dollars in ways that were vulnerable to waste, fraud and abuse.
But a lawyer for Mr. Efron, Mark Zaid, said his client, whom he portrayed as “the victim of a Project Veritas attack,” was not referring to the frozen funds.
“He is the one who made that ‘gold bars’ statement that Zeldin keeps seizing on, but it has nothing to do with this Greenhouse Gas Reduction Fund,” Mr. Zaid said. “He wasn’t talking about that. Those funds were already allocated and obligated.”
In the Project Veritas video, after using the “gold bars” phrase, Mr. Efron was asked who was getting the gold bars. He replied “nonprofits, states, tribes, cities” adding: “a lot of them are small, like, local nonprofits.”
Mr. Efron has been contacted by both the office of the E.P.A. inspector general and by an agent with the Washington field office of the F.B.I., according to Mr. Zaid.
The F.B.I. agent left a card at Mr. Efron’s home. Mr. Zaid said that on behalf of his client, he called the agent, who told him he had been sent by a prosecutor in the Southern District of Florida. But “that disappeared very quickly, and I am in discussion with the D.O.J. right now to better understand what is actually going on,” Mr. Zaid said.
There had been, he said, a “strange bouncing around of which U.S. attorney was going to handle this case.”
The person with the office of the E.P.A. inspector general — one of the many watchdog agencies whose leaders have been purged by Mr. Trump — sent Mr. Efron an email to which Mr. Zaid replied, the lawyer said, but he had not heard back.
Right-wing media outlets have labeled the green bank a slush fund and highlighted a link between fund recipients and Stacey Abrams, a Democratic organizer and former candidate for governor in Georgia.
Ms. Abrams served for one year as a senior counsel for Rewiring America, one of the nonprofit groups that stood to receive control of $2 billion to administer loans to different climate programs.
The Trump administration has also claimed that funding was awarded to organizations with ties to the Biden White House. Mr. Zeldin repeated these conflict of interest claims in his Monday letter to the Office of the Inspector General seeking further investigation.
John Podesta, who oversaw implementation of the Inflation Reduction Act as a senior climate adviser to the Biden administration, said in an interview that the process for issuing grants was “extremely” stringent and called the Trump administration attacks politically motivated.
“We knew it was a possibility that they’d try to interfere with people getting access to their money,” Mr. Podesta said of the Trump administration. In recent weeks the Trump administration also has frozen billions of dollars that were appropriated by Congress for clean energy projects, releasing some of the money only after two judges ordered it.
“We followed the law and they are breaking the law,” Mr. Podesta said.
