The Environmental Protection Agency said that it was canceling $20 billion in grants for climate and clean energy programs that have been frozen for weeks, a move that was labeled illegal by nonprofit groups that were supposed to receive the funds.
The money has been caught in an escalating controversy involving the E.P.A., the Justice Department, the Federal Bureau of Investigation and Citibank, where the funds are being held and are now frozen, prompting lawsuits from three nonprofit groups.
The grants were issued to a total of eight nonprofit organizations through the Greenhouse Gas Reduction Fund, which received $27 billion in funding from Congress through the 2022 Inflation Reduction Act.
But since taking office, Lee Zeldin, the E.P.A.’s administrator, has tried to claw back the money, saying they were part of a “scheme” and citing as evidence a hidden-camera video from Project Veritas, a conservative group known for using covert recordings to embarrass its political opponents.
The E.P.A. can cancel the grant contracts if it can document examples of waste, fraud, and abuse by the grantees. But that hasn’t happened at this point.
Yesterday, Democrats on the House Energy and Commerce Committee launched an investigation into the E.P.A,’s freezing of the funds and what they said were Mr. Zeldin’s “false and misleading statements.”