Minnesota AG sues Trump administration for holding up green project funds

The U.S. Environmental Protection Agency, in a “highly irregular and illegal campaign” against state green banks, has held up funds appropriated by Congress, Minnesota Attorney General Keith Ellison claimed in a lawsuit Wednesday.

Ellison filed the lawsuit in U.S. District Court for the District of Columbia on Wednesday along with attorneys general from California, Illinois and Maine. The lawsuit also names as a defendant Citibank, which it says was pressured by the EPA to freeze funds that should be available to state green banks that provide financing for pollution-reducing projects.

The lawsuit seeks a preliminary injunction ordering the EPA and Citibank to stop holding up the funds.

A spokesperson for the EPA said the agency does not comment on pending litigation. Citibank was not immediately available for comment.

In a news release announcing the lawsuit, Ellison said he was leading the group of attorneys general in “opposing yet one more illegal power grab by the Trump administration.”

The Inflation Reduction Act, passed in 2022, authorized billions of dollars for green lending agencies. But when President Donald Trump returned to office in January, he issued an executive order freezing funds authorized by the bill.

The executive order says the U.S. is “blessed with an abundance of energy and natural resources that have historically powered our Nation’s economic prosperity.”

“In recent years,” the executive order says, “burdensome and ideologically motivated regulations have impeded the development of these resources, limited the generation of reliable and affordable electricity, reduced job creation, and inflicted high energy costs upon our citizens.”

Ellison and fellow attorneys general argue that the directive was unlawful.

“If the current president wants to ask Congress to repeal the act and the funding that goes along with it, he is free to do so,“ Ellison said, ”but no president or federal agency can single-handedly undo an act of Congress, much less in the improper and disgraceful way this president and EPA have tried to go about it.”

Ellison said the group is also holding Citibank accountable “for improperly complying with the government’s campaign of intimidation and freezing funds that it is required by law to release.”

According to the lawsuit, green banks in Minnesota, Illinois, California and Maine have been unable to access funds held at Citibank.

The attorneys general allege EPA leaders began making unsubstantiated allegations of fraud and abuse to justify efforts to claw back Inflation Reduction Act funds for green projects.

The lawsuit notes the EPA has rules and procedures to prevent waste and fraud.

“Instead of invoking these well-defined mechanisms for policing grants,” the lawsuit says, “EPA pursued a pressure campaign — in public and in secret — to coerce Citibank to freeze the ... award funds."

Ellison has been involved in numerous lawsuits against the Trump administration in recent weeks for its efforts to freeze federal funds, fire probationary employees and restrict gender-affirming care.