A coalition of organisations awarded $7 billion in federal funding for climate and housing initiatives has filed a lawsuit against the Trump administration and Citibank, seeking to regain access to the funds. The lawsuit argues that the money, allocated through the Environmental Protection Agency’s (EPA) Greenhouse Gas Reduction Fund, has been unlawfully withheld.
Climate United, the coalition leading the legal challenge, claims it has been unable to access the funds and has not received any explanation from either the EPA or Citibank, which is managing $20 billion in grants under a federal arrangement. The lawsuit requests a court injunction ordering Citibank to release the funds and preventing the EPA from obstructing the disbursement.
The case is the latest in a series of disputes over the Trump administration’s attempts to reverse climate policies and reclaim previously allocated funds. The Greenhouse Gas Reduction Fund, the largest programme under the Inflation Reduction Act, has been a particular target of these efforts.
Filed in the U.S. District Court for the District of Columbia, the complaint alleges that both the EPA and Citibank have unlawfully withheld the funds, reflecting broader accusations that President Donald Trump’s administration is improperly withholding already approved funding.
The Justice Department is reportedly investigating the climate grants, with recipients ordered to testify in federal court later this month. Meanwhile, concerns over political interference have surfaced following the resignation of a senior federal prosecutor in Washington, who claimed she was pressured to open a criminal investigation into the funding without sufficient evidence.
Spokespeople for the EPA have not commented on the lawsuit. Citibank spokesperson Mark Costiglio stated that the bank is reviewing the case, adding that Citibank is acting as a financial agent and has no discretion over which organisations receive funds.
The lawsuit accuses the EPA of violating the Administrative Procedure Act, describing its decision to withhold or suspend the grant as “arbitrary, capricious, and unlawful.” It further claims that EPA Administrator Lee Zeldin breached the Fifth Amendment’s due process clause by publicly denouncing the climate programme and outlining plans to halt the funding.
Zeldin has criticised the programme as a “green slush fund” and argued that the Biden administration attempted to distribute funds hastily before the change in government. During his recent address to Congress, Trump cited the Greenhouse Gas Reduction Fund as an example of “appalling waste.”
However, the lawsuit states that the EPA has not provided evidence of mismanagement or issued any formal determination that Climate United failed to comply with grant conditions. “EPA has failed to provide Climate United with a reasoned explanation for its actions or a meaningful opportunity to object or to be heard,” the complaint asserts.
The coalition also accuses Citibank of breaching its contract by refusing to disburse the funds without providing a legal or factual basis. According to the lawsuit, Citibank denied Climate United’s requests to access funds on 18 and 21 February and subsequent occasions.
The $7 billion grant was intended to support projects such as electric vehicle charging infrastructure, energy-efficient housing, and renewable energy developments. Climate United warns that the freeze on funding has left it without alternative financial resources, forcing it to defer employee compensation and putting it at risk of running out of operating funds. Without immediate financial relief, the organisation may have to cut hours and furlough staff.
“Climate United’s access to its grant funding should be restored,” the coalition stated in its legal filing.
