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U.S. watchdogs warn of dangers of aid to Hamas-controlled Gaza, detail how Taliban diverted money

The USAID inspector general has warned of the possibility of U.S. humanitarian aid to Gaza being diverted to benefit Hamas. This is a long-running problem, especially in light of past U.S. aid diverted to the Taliban in Afghanistan, through the creation of fraudulent NGOs and co-opting UN facilities by force.

Published: November 6, 2023 11:00pm

Updated: November 6, 2023 11:55pm

The Office of the Inspector General of the United States Agency for International Development (USAID), which acts as a watchdog over the agency, is warning that Gaza is a high-risk area for “potential diversion and misuse” of U.S.-funded humanitarian assistance.

“It is USAID OIG’s investigative priority to ensure that assistance does not fall into the hands of foreign terrorist organizations (FTOs) including, but not limited to, Hamas,” the Fraud Awareness warning released Friday reads.

USAID's OIG highlighted that this danger is common in areas with active terrorist organizations. “USAID OIG has identified deliberate interference and efforts to divert humanitarian assistance in regions where FTO activity is prevalent. This includes: systemic coercion of aid workers by FTOs; imposition of taxes, duties, and fees on USAID awardees and beneficiaries; and FTO influence over beneficiary selection and internally displaced persons camp management,” the warning explains.

This warning comes as the Biden administration announced $100 million in humanitarian aid to "the Palestinian people in Gaza and the West Bank" last month amid the escalating war between Israel and Gaza-based Hamas.

The dangers of diversion of humanitarian aid and related funding in Gaza are longstanding. The BBC reported that in June 2022, a court convicted Mohammed Halabi of diverting diverting up to $50 million of donations earmarked for "humanitarian relief" to Hamas in Gaza. Halabi was the head of the Gaza office of World Vision, a global Christian humanitarian organization.

Halabi’s trial was plagued by accusations of unfair treatment and claims by World Vision that an independent forensic investigation of its finances found not evidence that any aid was actually diverted. The organization still says that Halabi is innocent of all charges and plans to appeal his conviction to the Israeli Supreme Court. Just the News has been unable to determine the status of that appeal. Though much of the evidence is classified, Halabi did give a confession to Israeli security forces, which the judge believed was “coherent” and “unlikely” to be a fabrication.

Humanitarian aid is distributed in Gaza by the United Nations Relief and Works Agency (UNRWA). Reports say that Hamas has repeatedly used UNWRA schools as rocket depots, have repeatedly tunneled beneath UNRWA schools, and dismantled European Union-funded water pipes to use as rocket fuselages, and even since the most recent violence broke out, the UNRWA has accused Hamas of stealing fuel and food from its Gaza premises. In 2006, the United Nations accused Hamas personnel of seizing aid supplies from UNRWA in the midst of one of the previous conflicts between Israel and the Gaza-based terror group.

The USAID’s concerns follow a similar warning about U.S. aid to Taliban-controlled Afghanistan, where, among other methods to divert U.S. funds, the Taliban created fraudulent non-governmental organizations through which to launder money.

A recent report from the Special Inspector General for Afghanistan Reconstruction (SIGAR) found that U.S. education assistance to Afghanistan provides both indirect and direct benefits to the Taliban—the ruling Islamist group that seized control of the country after the U.S. August 2021 withdrawal. Congress created SIGAR in 2008 to provide independent and objective oversight of Afghanistan reconstruction projects and activities. 

The SIGAR report says that U.S.-funded assistance to Afghanistan education programs indirectly “generates tax revenues for the Taliban, such as through personal income taxes on Afghans employed by U.S.-funded programs and sales tax revenue from goods purchased from landlords, contractors, and vendors.”

SIGAR also found that the Taliban establishes its own “fraudulent NGOs” to obtain access to donor funds as well as “infiltrating and extorting existing” Afghan educational NGOs to co-opt the financial assistance.

“The Taliban have also increased their attempts to interfere with and control NGO programming, including by encouraging the establishment of friendly or even directly sponsored NGOs. For example, an NGO official told us that the Taliban are creating their own NGOs to receive and administer U.S. and other donor funding,” SIGAR reported.

SIGAR conducted its own survey of NGOs across seven Afghan provinces. Its survey confirmed the reports, finding that the Taliban are “creating their own NGOs to obtain aid money; diverting direct assistance such as medicine and food; interfering with program implementation by pressuring Afghan NGOs to purchase items from Taliban-owned companies or requiring Afghan NGOs to hire Taliban officials; and requiring Afghan NGOs to falsify reports on programming efforts.”

You can read the report below:

SIGAR reports that the United States has “ongoing audits” to determine the extent of the benefits the Taliban receives from U.S. aid. The six educational programs funded by the State Department and USAID are estimated to cost approximately $185 million, according to the report. Only a fraction of the funds have been dispersed so far.

Taliban interference and influence over U.S. aid in Afghanistan is not limited to the education sector. SIGAR has also found significant Taliban interference in the World Food Program’s (WFP) provision of aid to the country.

More than half of U.S. funds earmarked for food aid to Afghanistan are dispersed to WFP in support of its projects, according to the most recent quarterly report to Congress from SIGAR. WFP is an organization affiliated with the United Nations dedicated to providing food assistance around the world.

Aid organizations and the beneficiaries in Afghanistan reported instances of fraud, waste, and abuse, theft, and food diversion. Thirty-two specific instances were reported by the WFP to USAID from January 2020 to December 2022, even before the Taliban took complete control of the country, SIGAR reported.

These same organizations reported increasing interference by the Taliban in food distribution, including by inserting themselves into the organizations’ data collection, preventing female aid workers from carrying out their duties, stealing food supplies, and pressuring aid workers, according to the report for SIGAR.

You can read the food assistance report below:

Additionally, as Just the News documented yesterday, the UNRWA — which is partially funded by the United States — has historically come under scrutiny for its educational work, which has been found to include antisemitic and anti-Israel materials. 

In April 2018, the U.S. Department of Justice settled a civil fraud case with Norwegian People’s Aid, (NPA) another recipient of USAID funds, accused of providing material support to Hamas and other entities, including Iran, the Popular Front for the Liberation of Palestine, and the Democratic Front for the Liberation of Palestine.

The organization funded a project for Hamas called “Youth of Today…Leaders of Tomorrow” which trained youth affiliated with the organization to improve societal skills. The Department of Justice (DOJ) alleged that Hamas used this information to improve the groups’ attractiveness to youth to increase its support. According to the DOJ, in connection with the settlement, NPA admitted to and accepted responsibility for its conduct.

So far, Biden administration officials have said that there is no evidence that Hamas is preventing or diverting any aid that has entered the Gaza Strip.

U.S. Special Envoy David Satterfield, speaking in Jordan this weekend, told reporters that the aid distributors in Gaza have not reported any aid diversions since the Egypt first permitted trucks to cross the Gaza border in late October.

The distributors "do not report to us in this 10 day, 12 day period of assistance delivery, interdiction of or seizure of goods by Hamas," he said, according to Reuters.

USAID says that humanitarian aid to Gaza is being closely monitored for any potential diversion. “We take every precaution to safeguard all U.S. taxpayer supported humanitarian assistance for its intended purpose and support Palestinian civilians directly,” a USAID spokesperson told Just the News on Monday.

“To that end, USAID utilizes safeguards for assistance to Gaza that are over and beyond other high-risk environments to ensure that aid is delivered without Hamas influence and Hamas does not receive direct or indirect benefit” said the spokesperson, who declined to be identified by name.

“USAID’s risk mitigation measures for assistance to Gaza includes partner vetting, anti-terrorism certifications that require organizations to certify compliance with anti-terrorism laws, restrictions of facility names to ensure they do not recognize or honor terrorism, mandatory anti-terrorism clause provisions in grants and contracts, regular Office of Inspector General audits, and close cooperation with Israeli authorities on our assistance,” the spokesperson continued.

The Biden Administration has so far been unsuccessful in securing the “humanitarian pause” that both President Biden and Secretary of State Antony Blinken have called for in recent weeks, and there is considerable debate over the difference between a "humanitarian pause" and a "ceasefire."

Israel shows no signs of restraining its hunt for Hamas terrorists based in Gaza. On Monday, the Israeli Defense Forces said that the military has successfully encircled Gaza City, the most populated city in the Gaza Strip and the headquarters of Hamas.

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