Climate: The $20 billion E.P.A. controversy

Source: Climate: The $20 billion E.P.A. controversy

…The money was “green bank” funding from the E.P.A.’s Greenhouse Gas Reduction Fund, which received $27 billion under the Biden-era 2022 Inflation Reduction Act.

Funds were held in Citibank accounts under the names of eight nonprofit grantees, which were planning to send it to other green banks and loan it out for climate projects.

Dept. of Justice resignation

The situation escalated on Tuesday, when Denise Cheung, a top federal prosecutor in Washington, D.C., abruptly resigned after she refused to open a criminal investigation into an unnamed government vendor and freeze unspent assets. The vendor is believed to be Citibank, and the assets in question are thought to be the $20 billion identified by Zeldin’s team.

Cheung said in a resignation letter that she felt there was not sufficient evidence to restrict the nonprofits’ access to the accounts.

By Thursday, it wasn’t clear whether Citibank would freeze the funds. That has created confusion among grant recipients about whether they’ll have access to the money.

The Department of Justice did not respond to a request for comment. A spokesperson for the E.P.A. referred to a post on Zeldin’s X account. Citibank declined to comment.

…Though Zeldin characterized the process as a “rush job,” plans to award $20 billion to the eight nonprofits were announced in April. The money was legally committed ahead of a September deadline.

The role of private banks

Thus far, there has been no evidence of illegal activity related to the $20 billion in funds. And the federal government has long made agreements with private banks, including Citibank, to handle financial transactions like the payment of government benefits with debit cards. A 2016 Government Accountability Office report found that one Treasury Department bureau was using 20 financial agents at the time.

Adam Kent, director of blended and inclusive finance at the Natural Resources Defense Council, said a financial agent had been chosen for the E.P.A. grants to make it easier for green banks to raise additional money from private markets. (Green banks typically use a mix of public and private money to fund decarbonization efforts.)

Last year the Biden administration estimated the funds would attract $7 in private capital for every government dollar spent.