Lee Zeldin, the head of the Environmental Protection Agency, announced last week that he had uncovered evidence of a massive fraud perpetrated by the Biden administration. In a video posted to social media, the former Republican congressman from New York said that Biden’s EPA had “parked” roughly $20 billion at a private bank, “rushing to get billions of your tax dollars out the door before Inauguration Day.” 

The Biden administration’s plan, Zeldin said, was for the bank to distribute the money to a handful of nonprofits, which would then send it out to “NGOs and others” for climate-related spending. But he vowed to stop that plan. “The days of irresponsibly shoveling boatloads of cash to far-left activist groups in the name of environmental justice and climate equity are over,” he said. 

But the scheme Zeldin described is not novel or a secret. The $20 billion he is trying to recover is money that Congress passed in 2022 for a program known as the “Greenhouse Gas Reduction Fund,” also known as the “green bank” initiative. This kind of program once enjoyed bipartisan support in states like Nevada, which opened a clean energy fund under a Republican governor in 2017, and Connecticut, where green bank legislation passed in 2011 with unanimous support from both parties. At least two centrist Republicans, Brian Fitzpatrick of Pennsylvania and Don Young of Alaska, endorsed a national green bank bill in 2021. 

These banks appealed to a number of Republican priorities since it offered local governments and groups flexibility and catalyzed private investment, but congressional Republicans turned against the idea after the passage of the Inflation Reduction Act, the 2022 climate law that reduces carbon emissions through financial incentives. Now, the Trump administration is trying to cancel it altogether.

“The bank must immediately return all the gold bars that the Biden administration tossed off the Titanic,” he said in the video, adding that he would refer the matter to EPA’s internal watchdog and the Justice Department. The EPA now seems to be trying to seize the funds from Citibank, which received the funds months ago, though it has met with some resistance: a top Justice Department prosecutor reportedly resigned on Tuesday rather than sign an order demanding that a bank freeze federal clean energy funds. Even funded organizations themselves were unsure as of press time whether their funds were frozen.

The green bank program was designed to distribute billions of dollars to nonprofit lenders, who would then become banks for clean energy projects. These lenders would provide low-interest loans to tribes, companies, and local governments to build solar farms, improve energy efficiency, and reduce carbon emissions. The money would flow to places that were too disadvantaged or risky to attract private capital on their own — rural areas of Appalachia, for instance, or tribal reservations where income levels are low.

The program was modeled off successful funds in states like Rhode Island and Michigan, which respectively financed infrastructure repairs and homeowner energy upgrades. Although Republicans have described it as a left-wing “slush fund,” it incorporated the flexibility and private industry focus that have appealed to conservatives in several states, said Laura Haynes Gillam, a former senior policy adviser at the Senate’s Energy and Public Works committee who helped lead the drafting of the Inflation Reduction Act.

“The intention was very clear — to allow maximum flexibility for communities and to let the money leverage private investment,” she said. Because borrowers would pay back their loans over time, the initial $20 billion could be deployed over and over again, reducing the need for future climate spending. 

An earlier version of the green bank proposal appeared in a bipartisan climate bill that was introduced in 2007 by former Republican senator Arlen Specter of Pennsylvania. It also appeared in Ed Markey’s cap-and-trade bill, which passed the House of Representatives in 2009 with support from a handful of Republicans but died in the Senate. The Inflation Reduction Act version is “technology-neutral,” meaning that money can go to support forms of clean energy like nuclear and hydrogen, which are more palatable to Republicans.

Times have changed. Zeldin is now alleging that the transfer of money to Citi, and the fact that so much money went to just a few institutions, is evidence of “waste and abuse” by the Biden administration. The federal government has been parking money at private banks since the 1980s through “financial agent agreements,” and the Biden administration distributed the money to Citi before Trump won the presidential election. 

The “gold bars” metaphor Zeldin referenced in the video posted to social media was not his own invention — it came from a former EPA staffer named Brent Efron, who helped implement the Inflation Reduction Act during the Biden administration. In December, the right-wing media organization Project Veritas, which is known for its sting operations on liberal politicians and media figures, posted a hidden-camera video of Efron talking about his work to dole out funding.

“We’re throwing gold bars off the Titanic,” Efron says as he drinks what appears to be a glass of orange wine. “When the Project Veritas operative asks him who is getting the gold bars, he responds, “nonprofits, states, tribes.” Grist could not reach Efron for comment.

Even before the Project Veritas video, Republicans in Congress had already taken aim at the green bank program. Last January, the House Committee on Energy and Commerce called a top Biden EPA official to testify about what it called “Biden’s green bank giveaway.” The administration’s inspector general (whom Trump has since fired) had also pointed to the potential for fraud in the green bank and other programs, saying in a September letter to Congress that the “pace of spending [by the EPA] escalates not only the risk for fraud but also the urgency for oversight.”

Although the Biden administration parked most of the green bank money at Citi before Trump took office, grantees have so far drawn down very little of it, and only a few projects have gotten off the ground. Climate United, a coalition of financial nonprofits that received the largest single tranche of money from the green bank, issued a $32 million loan for what would be the biggest industrial solar development in Arkansas history. The solar system at the University of Arkansas would save the school around $120 million in energy costs over the next 25 years.

Citi may return the money to the EPA rather than risk a public spat with Trump, but if it does, funding recipients could sue the administration for breaching its contract and withholding obligated funds, said people involved with the green bank initiative. State attorneys general, for instance, could sue to recover money that they were supposed to receive under a $7 billion residential solar program that was part of the initiative. The EPA didn’t answer Grist’s questions about the legality of the clawback.

In a curious twist, Efron himself predicted that the administration might withhold funds in the very video that Zeldin cites as evidence of malfeasance. After the “gold bars” comment, he predicts that Trump will try to impound money that the Biden administration sent out.

“I think they will come in, and they will issue an order that all grants have to stop,” says Efron in the video. “They’ll say, ‘we’re reevaluating it,’ and then Congress will…pass a law that says, this money doesn’t exist anymore, that you wanted to give out.”