How the Trump Administration’s Push to Raid ‘Green Banks’ Threatens Local Climate Projects

Lee Zeldin, head of the Environmental Protection Agency (EPA), recently claimed to have found major fraud involving the Biden administration. In a social media video, he said the administration “parked” about $20 billion in a private bank, hurriedly pushing taxpayer money out just before Inauguration Day.

Zeldin argued that the funds were intended for nonprofits, which would then distribute money for climate initiatives. He promised to halt this plan, stating, “The days of irresponsibly shoveling cash to activist groups are over.” Yet, his concerns about this scheme are not new. The $20 billion he references is funding from Congress in 2022 for the “Greenhouse Gas Reduction Fund,” known as the “green bank” initiative.

This initiative has had support across party lines in the past. For instance, states like Nevada and Connecticut have successfully implemented similar funds with backing from Republicans. The goal was to provide local governments and organizations with flexibility to attract private investments. However, following the passage of the Inflation Reduction Act, congressional Republicans have recently turned against the idea.

In his video, Zeldin insisted that the EPA must demand repayment from the bank, Citibank. Tensions escalated when a top prosecutor in the Justice Department resigned rather than sign an order to freeze federal clean energy funds. Meanwhile, organizations that received this funding were left uncertain about the status of their loans.

The green bank program was designed to fund nonprofit lenders, enabling them to offer low-interest loans for clean energy projects like solar farms and energy-efficient upgrades. It aimed to support areas lacking access to private capital, such as rural communities and tribal lands.

Successfully modeled after schemes in Rhode Island and Michigan, the green bank initiative initially attracted bipartisan support. Critics have labeled it a “slush fund,” but the framework was intended to leverage private investments while allowing flexibility for local needs. Laura Gillam, a former policy adviser, emphasized that the goal was to maximize community flexibility and reduce long-term climate spending.

Earlier proposals for a green bank date back to the mid-2000s, receiving support even from some Republicans. The current version is designed to be “technology-neutral,” allowing funding for various forms of clean energy, making it more appealing to a diverse political spectrum.

Despite the original intent, Zeldin argues that the quick transfer of funds to Citibank and the concentration on a few institutions point to government misuse. This practice, however, is common and has been ongoing since the 1980s through financial agreements with private banks.

The “gold bars” metaphor Zeldin used actually originated from Brent Efron, a former EPA staffer. In a separate Project Veritas video, Efron discussed the funding process, saying they were “throwing gold bars off the Titanic.” His comments went viral, primarily for highlighting the more immediate concerns about funding borrowing organizations.

Even before the viral video, congressional Republicans initiated inquiries into the green bank program. The House Committee on Energy and Commerce had already called officials to testify about perceived “giveaways” under Biden’s administration. The prior administration’s inspector general noted potential fraud risks associated with the program as well.

Despite receiving a significant amount of funding, many initiatives funded by the green bank have yet to break ground. One of the largest loans was recently issued for a solar project in Arkansas, expected to save the University of Arkansas a significant amount over the next few decades.

As tensions continue, Citi could return the funds to the EPA to avoid confrontation with the administration. However, such action could lead to legal disputes from recipients who may claim breach of contract over awarded funds. In a twist, Efron himself suggested during the video that the administration might withhold funds after Trump took office, raising questions about future funding.

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