As USAID Faces Shutdown, Links to Terrorists and Warnings Ignored May Have Sealed its Doom

Long before Elon Musk began his attacks on the United States Agency for International Development, the organization had become a welter of controversial finances — including bloated budgets and misallocated funds — and deeply concerning terrorist ties. “This is an agency that’s gone rogue on the original mission JFK created it for,” a non-governmental organization financial expert and risk analyst, Dennis Santiago, tells the Sun. “Then we also discover that after decades of waging a war on terror costing way too much American blood, our aid money may have wound up funding terrorists? What broke down in the chain of coordination among the parts of the US government running our foreign policy?” Thursday evening, news broke that the Trump administration intends to fire most of the agency’s 10,000 employees worldwide, retaining just 290 people. A memo to all employees said everyone but a few “essential” personnel would be put on administrative leave, with those overseas being brought back to the U.S. Friday afternoon, a federal judge said he will impose a “very limited” temporary order blocking some of the Trump administration’s steps to dismantle the agency. This followed the filing of a lawsuit by two of the agency’s biggest unions, arguing that the shutdown was an unlawful breach of the separation of powers.Also on Friday, President Trump himself weighed in on the matter via his preferred social media platform, Truth Social. He wrote, in all capital letters, “USAID IS DRIVING THE RADICAL LEFT CRAZY, AND THERE IS NOTHING THEY CAN DO ABOUT IT BECAUSE THE WAY IN WHICH THE MONEY HAS BEEN SPENT, SO MUCH OF IT FRAUDULENTLY, IS TOTALLY UNEXPLAINABLE. THE CORRUPTION IS AT LEVELS RARELY SEEN BEFORE. CLOSE IT DOWN!”He also referred to the far left Washington Post and MSNBC news personality, Eugene Robinson, as “incompetent” for his “pathetic” defense of USAID adding that, “He should be fired immediately!” Meanwhile, the House Foreign Affairs Committee on Friday scheduled a hearing next week on what it describes as a “USAID betrayal.” So, what went wrong?With a $50 billion budget, USAID is an independent agency, answering only to the president, that is supposed to distribute American foreign aid. Most recently overseen for President Biden by the Obama confidante Samantha Power, USAID has been under siege since Elon Musk declared his intention to shut down the agency last week. A view of a box of food rations from the World Food Program ready to be distributed to local residents at a food distribution point run by the Ukrainian charity Angels of Salvation (AOS) on February 7, 2025 at Druzhkivka, Ukraine. Among the charity’s funders has been the U.S. Agency for International Development (USAID), which has provided Ukraine with billions. Pierre Crom/Getty ImagesThe White House then claimed USAID funds have recently gone to DEI efforts in Serbia, a DEI musical in Ireland, a transgender opera in Colombia and a transgender comic book in Peru. These expenditures, though small, signaled that the agency established by President Kennedy to aid the desperately poor and sick in the world’s most troubled corners, has badly lost its way. With a few tweets, Mr. Musk managed to discredit the agency as he wielded his sledgehammer. Concerning ConnectionsYet widespread concerns about USAID — far more serious than those about small expenditures on DEI and transgender comic books — have persisted for years due to the agency’s failure, despite repeated warnings, to keep its funds out of the hands of terrorists.In July 2024, USAID’s own Office of Inspector General identified Gaza as a “high-risk area” for potential rerouting of American-funded assistance to terrorist organizations, including Hamas. The report emphasized the need for strengthened mechanisms and stringent oversight to prevent the misuse of aid.The Inspector-General also urged USAID-funded implementers to report allegations that funds received by USAID have been distributed or otherwise transmitted to the controversial United Nations Relief and Works Agency which, the New York Times claims, “provides critical humanitarian assistance to millions of people in war-torn Gaza.”Then-USAID Administrator Samantha Power (C) meets with members of the Egyptian Red Crescent and other officials as foreign aid intended for the Gaza Strip is delivered at El Arish International Airport on December 5, 2023 at Arish, Egypt. Ali Moustafa/Getty ImagesIn March 2024, President Biden signed into law a one-year ban on American funding to the Unrwa. The suspension followed allegations that 12 Unrwa employees participated in the attack by Hamas on Israel in October 2023. This week, President Trump signed an executive order permanently ending U.S. funding. The USAID internal watchdog had admitted in its report that it was struggling to monitor monetary movements on the ground. “Receiving allegations of misconduct affecting USAID-funded awards in Gaza becomes more challenging with the Agency programming more than $100 million in humanitarian assistance funding through United Nations organizations,” the report stated. “USAID’s award agreements require the UN and other public international organizations to disclose to USAID OIG allegations of prohibited conduct involving USAID funds.”The report highlighted that most United Nations agencies are not reporting a significant number of allegations to USAID’s Office of Inspector General despite being required to do so. Three months after the report’s release, in a letter to then USAID administrator Ms. Power, who famously was forced to resign from the Obama campaign in 2008 for calling Secretary Clinton “a monster,” Senator Cotton accused USAID of enabling the “likely misuse” of more than $1 billion in U.S. humanitarian aid to Gaza, alleging that Hamas had diverted funds intended for relief. “As I predicted would happen from the outset, credible reporting indicates that Hamas terrorists have diverted this aid; indisputable evidence demonstrates that the aid was always at high risk of diversion,” he wrote. “In all likelihood, the Biden-Harris administration has prolonged the Gaza war, allowed aid to flow to Israel’s enemies, and misused taxpayer funds.”Protesters hold signs in front of the UNRWA office in Jerusalem during a demonstration calling for the expulsion of the UNRWA office from the city on February 5, 2024 at Jerusalem. Amir Levy/Getty ImagesMr. Cotton, who’s now part of the Senate GOP’s leadership, pointed out that on September 30, USAID announced around $336 million in additional humanitarian aid for Gaza, Judea, and Samaria. On the same day, the United Nations confirmed that a Hamas leader killed in an Israeli airstrike, Fateh al-Sharif, was employed by the United Nations Relief and Works Agency. His comments suggested that although Washington cut off funds to the United Nations agency, USAID partners may have found their own work-arounds. “USAID continues to work with UN agencies and other local partners in Gaza despite documented concerns about inadequate vetting and possible terrorist ties,” he continued, stressing the Inspector General’s concerns over the lack of oversight and self-reporting. This week, Mr. Cotton wrote on X that, “UNWRA is a cesspool of pro-Hamas terrorists and should never receive another dime of American taxpayer funding.”USAID did not issue a statement addressing the specific concerns raised in the correspondence but responded to press queries by insisting that the agency “does not provide any funding to UNRWA” and that it has in place “extensive risk mitigation procedures” and “has not received evidence to support the claims in Senator Cotton’s letter.”The Sun reached out to Mr. Cotton’s office for further comment on the matter. President Trump is handed an executive order by White House staff secretary Will Scharf (L) in the Oval Office of the White House on February 04, 2025 at Washington, DC. Mr. Trump signed two executive orders, one “reimposing maximum pressure on Iran” and a second executive order withdrawing the United States from the United Nations Relief and Works Agency for Palestine Refugees in the Near East and the United Nations Human Rights Council. Anna Moneymaker/Getty ImagesUNRWA, though, isn’t the only terrorist-connected woe plaguing the embattled agency. In November, the Justice Department announced charges against a 53-year-old Syrian national, Mahmoud Al Hafyan, for allegedly steering more than $9 million in USAID funds to terrorist organizations, including the al Qaeda affiliate then known as Al-Nusrah Front. Now referred to as Hayat Tahrir al-Sham, the group is still considered a Foreign Terrorist Organization despite having taken control of Damascus in December. USAID’s inspector general reported that from 2015 to 2019, Mr. Al Hafyan’s non-governmental organization received $122 million in USAID funds for food aid during Syria’s civil war. He allegedly redirected supplies to the Al-Nusrah Front and sold them on the black market.“This defendant not only defrauded the U.S. government, but he also gave the humanitarian aid he stole to a foreign terrorist organization,” then-United States Attorney Matthew Graves stated. “While this foreign terrorist organization fought with the cruel al-Assad regime, the people who were supposed to receive the aid suffered.”In 2023, House Foreign Affairs Committee Chairman Michael McCaul questioned why USAID two years earlier awarded $110,000 to Helping Hand for Relief and Development through the Ocean Freight Reimbursement Program, despite “longstanding, detailed allegations that HHRD is connected to designated terrorist organizations, terror financiers, and extremist groups.”Secretary of State Rubio meets with President Bukele at his residence at Lake Coatepeque at El Salvador, February 3, 2025. AP/Mark SchiefelbeinThe organization is accused of having charitable ties to another designated Foreign Terrorist Organization, the Falah-e-Insaniat Foundation, the charity wing of Lashkar-e-Tayyiba. This Pakistan-backed militant group, one of the largest and most capable operating in Kashmir, was responsible for the 2008 Mumbai attacks that killed over 160 people.Mr. McCaul claimed that the agency “had failed to take any action to investigate the allegations or suspend the award, despite having been provided detailed information by congressional staff months prior.” The Michigan-based Helping Hand for Relief and Development has never been charged with any wrongdoing and maintains a four-star rating from Charity Navigator. The organization did not immediately respond to the Sun’s request for comment. Such questions may just be the tip of the iceberg when it comes to USAID grappling with allegations of bolstering terrorist, corrupt or unethical groups and practices in recent years. “The corruption, misallocation, and misappropriation of funds should strike fear in the hearts of every American taxpayer,” the managing director of strategic advocacy firm Nestpoint Associates, John Thomas, tells the Sun. A Storied HistoryEstablished in the 1960s under President Kennedy, USAID administers United States humanitarian and development aid, distributing about $50 billion annually — more than half of the country’s foreign aid budget. The agency employs around 10,000 people, a third of whom work abroad, although most of the groundwork is executed by other organizations financed and contracted by USAID. The agency funds initiatives in over 60 countries, with Ukraine, Jordan, Yemen, and Afghanistan being the biggest recipients in recent years. The United States spent more than $70 billion on international aid in 2023, predominantly through USAID, and is by far the world’s largest foreign aid donor, with the United Kingdom coming a distant second at $15.3 billion, according to government data. Life-Saving Aid Despite its failings, many observers emphasize the crucial role USAID plays in delivering humanitarian aid and supporting global health initiatives. Its work spans a wide range of activities, from providing food assistance in crisis zones to operating the world’s leading famine detection system, which uses data to predict food shortages. The agency also focuses heavily on health programs, such as administering polio vaccinations and working to prevent the spread of potential pandemic viruses.The United States Agency for International Development, February 1, 2025, at Washington. AP/Carolyn KasterBeyond these efforts, USAID is involved in activities like supplying prosthetic limbs to injured soldiers in Ukraine, clearing landmines, and managing the containment of Ebola outbreaks in Africa. Its broad scope of operations has far-reaching effects, making it a valuable resource for addressing global humanitarian and health challenges.“USAID is a core pillar of our foreign policy. It was built on cornerstones of democratic governance, economic development, food sustainability, public health, education, and addressing poverty,” said Mr. Santiago. “These cornerstones help America infuse the spirit of capitalism and respect for human rights into countries as part of our pursuit of global stability without resulting in military confrontation and brinksmanship.”Some contend that Mr. Trump and Mr. Musk’s intention to shut it down could create a vacuum for Washington’s adversaries to fill and trigger even more national security headaches. “Abandoning USAID is disastrous. It’s critical in advancing U.S. interests, promoting stability, and providing life-saving aid worldwide,” California Democratic Representative Mike Levin wrote on X. “China and Russia will eagerly fill the gap.”Dismantling the agency isn’t as simple as signing an executive order—it would almost certainly face legal and congressional challenges.Reform Over Removal? On Monday, Secretary of State Marco Rubio accused the agency’s leadership of “insubordination” and declared himself its “acting head” amid escalating hostility from the White House. Thousands of USAID employees are being put on leave on Friday – most of the agency’s staff with the exception of those in “mission-critical” roles and core leadership. Mr. Musk has made clear he intends to shut USAID down completely. “It’s not an apple with a worm in it. We have actually just a bowl of worms,” he said. The argument that USAID does not need to be obliterated altogether but requires extensive reform — starting with better mechanisms to determine its own impact — is also gaining traction.The effectiveness of its aid is difficult to measure, and audits disclose that many programs fail to meet their goals. USAID has been criticized for its lack of rigorous evaluations, and many reports fail to meet the agency’s own standards of quality. USAID humanitarian aid destined for Venezuela. AP/Fernando VergaraInternal reviews have shown that nearly half of the programs did not meet expectations, and much of the money may be spent on ineffective initiatives.Adding to the concerns, USAID’s grant processes are complicated and favor large contractors, limiting the opportunity for smaller organizations, especially those in recipient countries, to access funding. This has led to a concentration of funding in just a few organizations, leaving many smaller, more contextually aware groups without support and thus not producing the best results for the communities it aims to help.The agency has long relied primarily on a cost-plus grant structure, in which contractors outline their anticipated expenses. USAID reimburses them for those costs regardless of whether the desired outcomes are achieved.“There is no reward for solving a problem,” added Mr. Thomas. “It’s just about spending money on the problem and continuing to spend money on it. That must change.”

As USAID Faces Shutdown, Links to Terrorists and Warnings Ignored May Have Sealed its Doom

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