Court Docs Reveal Citibank Froze Nonprofits’ Accounts on FBI’s Request

Recently disclosed court documents reveal that Citibank was following requests from the FBI, the Environmental Protection Agency (EPA), the EPA Inspector General, and the Treasury Department when it froze the accounts of several nonprofit organizations and state agencies in February.

The FBI told Citibank that these groups were involved in “possible criminal violations,” including “conspiracy to defraud the United States.” The funds in question were allocated by the Biden administration to support climate initiatives aimed at curbing pollution.

Affected groups include Habitat for Humanity, DC Green Bank, and United Way. These organizations are now facing significant disruptions, jeopardizing ongoing sustainability projects and endangering their ability to pay rent and staff salaries.

Although the account freezes began in February, Citibank’s filing in opposition to unfreezing the government-allocated funds has provided previously undisclosed details, including a full list of nonprofits currently under FBI investigation for “possible criminal violations, including 18 § U.S.C. 371 (Conspiracy to defraud the United States) and 18 § U.S.C. 1343 (Wire fraud).”

Citibank’s agreement with grant recipients typically limits account freezes to 48 hours unless the EPA takes full control, a measure usually reserved for fraud cases. In February, a high-ranking federal prosecutor resigned after refusing to instruct the bank to freeze the funds, writing in a letter to the interim U.S. Attorney Ed Martin that “I still do not believe that there is sufficient evidence to issue the letter you described.”

The funds are part of the Greenhouse Gas Reduction Fund, a $27 billion program established by the Inflation Reduction Act of 2022. Of this total, the EPA received $14 billion for the National Clean Investment Fund, which offers grants to “green banks.” Citibank was selected as the financial agent to manage the funds and hold them in accounts under the recipients’ names.

Earlier this month, Trump’s EPA claimed that the Greenhouse Gas Reduction Fund experienced “financial mismanagement, conflicts of interest, and oversight failures.” According to the release, these issues have prompted the need for “a comprehensive review” of the funds, which will take place alongside ongoing investigations by the U.S. Department of Justice (DOJ) and FBI.

Climate United Fund — a coalition of three nonprofits that received nearly $7 billion from the program — sued both the EPA and Citibank, alleging that the freeze violates the Administrative Procedure Act and arguing that “the combined actions of Citibank and EPA effectively nullify a congressionally mandated and funded program.” The Coalition for Green Capital and Power Forward Communities have both filed separate lawsuits against Citibank, accusing the bank of breaching its contract by withholding EPA-approved funding.

Democratic Sen. Sheldon Whitehouse (Rhode Island) has called for an inquiry into whether federal law enforcement is being used to hinder climate finance efforts. He stated in a press release that it appears that Attorney General Pam Bondi and FBI Director Kash Patel have “reverted to a pretextual criminal investigation” to provide an excuse to interfere with the disbursement of government-allocated funding.

Whitehouse warned that, “If DOJ and the FBI are aiding and abetting this unlawful plot, it crosses very significant redlines for the agency and its personnel. That kind of misconduct is itself a violation of law and subjects lawyers participating in such conduct to professional as well as legal consequences. It is therefore imperative that the truth be told about what has gone on in this ominous episode.”