Citibank, EPA Sued Over Access to Clean Energy Grant Funding (3)

A climate change nonprofit group is suing Citibank NA and the US Environmental Protection Agency over its access to clean energy project grant funds.

Climate United Fund’s lawsuit comes in the wake of President Donald Trump’s new EPA administrator Lee Zeldin calling the National Clean Investment Fund, a program under the Greenhouse Gas Reduction Fund, a “criminal” scheme. The lawsuit was filed March 8 in the US District Court for the District of Columbia.

The grant was intended to support Climate United’s efforts to finance critical clean energy projects that accelerate local economic development, save money, spur demand for domestic manufacturing, create jobs, and reduce air pollution, the nonprofit says. An EPA grant to Climate United required that its funds be held at Citibank under a financial agent agreement between the bank and the US Treasury Department, according to the lawsuit.

Unless the EPA takes exclusive control of the funds, Citibank must disburse funds to Climate United at its request, the suit alleges. But EPA never attempted to exercise its right to take exclusive control of the funds through legal means, “nor could it, because the preconditions for exercising that right have not occurred.”

On Feb. 23, Zeldin said that “the entire scheme, in my opinion, is criminal,” the lawsuit says. On March 4 he asserted that the “money is now FROZEN,” the suit says.

EPA also engaged in behind-the-scenes efforts to cause Citibank to withhold Climate United’s funds, the suit says—resulting in the resignation of Denise Cheung, the long-time chief of the criminal division of the US Attorney’s Office for the District of Columbia, following her refusal to carry out the “illegal directive” to send a letter to Citibank demanding that it freeze GGRF funds.

The efforts from Zeldin, who is also a named defendant, and others at EPA apparently worked, Climate United says. Citibank is refusing to honor the nonprofit’s disbursement requests despite the bank’s “unambiguous contractual obligation” to do so, the suit says.

The EPA has “no legal basis” for causing Citibank to deny its disbursement requests, Climate United says.

The group says Citibank committed breach of contract, and that EPA and Zeldin violated the Administrative Procedure Act and the Due Process Clause.

Climate United seeks the court to order Citibank to comply with its contractual obligations under the ACA, including by disbursing grant funds “to which Climate United is entitled,” and to stop EPA and Zeldin from impeding Citibank from complying with its contractual obligations.

Climate United also seeks the court to enjoin EPA and Zeldin from unlawfully suspending or terminating its grant award “except as permitted in accordance with the ACA, the grant award, and applicable law.”

Citibank is reviewing the suit, a company spokesperson said in a written statement.

“As we’ve said previously, Citi has been working with the federal government in its efforts to address government officials’ concerns regarding this federal grant program,” the spokesperson said. “Our role as financial agent does not involve any discretion over which organizations receive grant funds. Citi will of course comply with any judicial decision.”

An EPA spokesperson declined comment. “In keeping with a longstanding practice, EPA does not comment on pending litigation,” the spokesperson said.

Jenner & Block LLP represents Climate United Fund.

The case is Climate United Fund v. Citibank NA, D.D.C., No. 1:25-cv-00698, complaint 3/8/25.