A US investigation is underway into the United States Agency for International Development (USAID) over allegations that it funneled millions of dollars to organizations linked to terrorism.
USAID, tasked with distributing humanitarian aid globally, saw its budget significantly increase under the Biden administration, with billions allocated to various initiatives, including media organizations in Ukraine, Lebanon, and the Palestinian territories.
While USAID claims its mission is to promote democracy, economic development, and human rights, concerns are mounting over the misallocation of funds. Investigations suggest that some of these funds have been directed toward organizations with ties to extremist groups, raising questions about oversight and accountability.
In 2024, USAID allocated over $150 million to the media sector, including $40 million aimed at bolstering local journalism and ensuring independent reporting in politically unstable regions.
Additionally, reports indicate that humanitarian aid funds intended for rebuilding Gaza’s infrastructure have also benefited groups tied to Hamas. The distribution of these funds remains opaque, and allegations suggest that USAID’s support of projects in the Palestinian Authority has, at times, contributed to the spread of anti-Israel propaganda.
USAID officials maintain that these funds were designated for educational programs, healthcare, and infrastructure projects. However, watchdog groups and security analysts contend that a significant portion was misappropriated, with some funds ultimately used to reconstruct Hamas military facilities, reinforcing the terror organization’s presence in Gaza.
A report by the Middle East Forum found that at least $122 million of USAID grants went to organizations affiliated with designated terrorists. Among the troubling findings, USAID granted over $900,000 to the Bader Association for Environment and Development, which allegedly operates in close collaboration with Hamas. The report states that the organization has coordinated with Hamas’s Interior Ministry, its Labor Ministry, and other government bodies under its control.
Internal congressional reports have called for increased scrutiny and tighter oversight of USAID’s financial practices. Lawmakers argue that, despite repeated warnings, millions of dollars continue to flow to entities with extremist ties, undermining the very democratic values that USAID purports to support.
BBC, one of the media organizations that received USAID funding, has faced longstanding criticism for its coverage of Israel. Reports have accused the network of legitimizing Hamas by using terms such as “armed activists” instead of “terrorists” and minimizing coverage of Hamas’s diversion of foreign aid for military purposes. British lawmakers have also found BBC’s coverage of the Israeli-Palestinian conflict to be biased and lacking in balance.
The impact of USAID funding in conflict zones extends beyond Gaza. Infrastructure rehabilitation funds, particularly in water, health, and education, have reportedly been repurposed for military objectives. American media reports have further criticized USAID’s history of wasteful spending, including funding for Anwar al-Awlaki, an al-Qaeda recruiter. Critics argue that the agency’s lack of rigorous vetting has led to taxpayer dollars being used to support individuals and organizations with extremist affiliations.
RUSSIA HAS also voiced concerns about USAID’s activities, accusing the agency of financing opposition groups in foreign nations and interfering in the internal affairs of sovereign states. Russian officials have called for the US government to disclose the names of agents and groups that have received USAID funds, citing fears of political destabilization efforts in Eastern Europe and the Middle East.
Domestically, Republican lawmakers have intensified calls for accountability.
Sen. Ted Cruz has claimed that USAID secretly transferred hundreds of millions of dollars to Hamas, directly enabling the terror group’s military build-up ahead of the October 7 attack. In a recent podcast, Cruz alleged that these funds facilitated the purchase of weapons and the construction of underground tunnel networks used to smuggle arms and fighters.
While President Donald Trump had frozen aid to Palestinian entities during his first term, President Biden reversed the policy, leading to the resumption of significant financial transfers. In 2022 alone, USAID allocated approximately $200 million to Palestinian aid programs, with an additional $336 million planned for future disbursement. Critics argue that these funds, rather than promoting stability, have indirectly bolstered Hamas’s operational capabilities.
Concerns over financial oversight extend to broader regional policies. The Palestinian Authority’s controversial “pay for slay” policy, which provides financial incentives to terrorists and their families, has prompted legislative action in the US. In response, Congress passed the Taylor Force Act in 2018, restricting economic aid to the Palestinian Authority unless it ceased such payments. However, despite these restrictions, reports indicate that aid has continued to flow through indirect channels, raising concerns over compliance and enforcement.
In 2024, USAID also allocated $224 million to Lebanon, a country grappling with economic collapse and political instability. Given Hezbollah’s significant influence in the region, questions remain about whether these funds are being properly monitored to prevent misuse by terrorist-affiliated groups.
USAID controversy
The controversy surrounding USAID has led to policy shifts within the US government.
Two weeks ago, Secretary of State Marco Rubio ordered an 85-day freeze on most foreign aid, excluding Israel and Egypt, to allow for a comprehensive review of funding allocations. The move has been met with mixed reactions, with some praising the decision as a necessary step to curb financial mismanagement and others warning that it could jeopardize critical humanitarian programs.
Shortly thereafter, President Trump announced sweeping cuts to USAID’s workforce, reducing the agency’s staff from 14,000 to just 294 employees. The dramatic downsizing has been interpreted as an effort to dismantle the agency in response to growing concerns over corruption and inefficiency. However, a federal court has since issued an injunction, temporarily blocking the dismissals while legal challenges proceed.
As scrutiny intensifies, the future of USAID remains uncertain. With mounting evidence of misallocated funds and growing political pressure for reform, the agency faces an uphill battle to restore credibility and ensure that American taxpayer dollars are used effectively and transparently.
THE IMPLICATIONS of USAID’s funding mismanagement stretch far beyond the Middle East. Analysts warn that similar concerns exist in other regions where the agency operates, particularly in Africa and Southeast Asia. A pattern of insufficient oversight, vague accountability measures, and failure to track where funds ultimately end up have eroded trust in the agency’s mission. The international community is closely watching how the US government will respond to the growing outcry over foreign aid mismanagement.
Moving forward, lawmakers are expected to push for enhanced tracking mechanisms, stricter regulations, and greater transparency in USAID’s financial dealings.
Without significant reforms, experts argue, the agency risks further tarnishing its credibility and inadvertently supporting causes that contradict American foreign policy interests. The growing skepticism surrounding USAID underscores a broader debate over the effectiveness and oversight of US foreign aid initiatives.
The writer is the CEO of Radios 100FM, an honorary consul, deputy dean of the Diplomatic Consular Corps, president of the Radio Communications Association, and former correspondent for IDF Radio and NBC News.
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