A half billion dollar fraud and bribery scheme conducted by a USAID contract officer and three conspirators that went undetected for a decade. American-bought equipment stolen by a terror group. Millions of dollars in food that spoiled in warehouses. These are but a few of the wasteful — if not corrupt ways -- millions of USAID dollars have been lost.

While President Donald Trump has sharply cut foreign aid from the auspices of USAID and shifted what remains to the State Department, the massive abuse of America’s generosity to foreign countries over a decade of Obama-Biden governance is coming into clearer focus. 

A Just the News review of audits and investigations of the USAID and State Department inspectors general over the last year chronicles billions of dollars lost, stolen, defrauded, or wasted because of mismanagement or years of neglect.

In many cases, tax money was given away without regard to whether the recipients could responsibly spend it or could keep it out of the hands of terrorists or other enemies, the audits show.

For instance, the USAID inspector general recently revealed that the federal government kept funding the United Nations Relief and Works Agency for Palestine Refugees (UNRWA) despite evidence that 101 of its employees or associates had ties to terror groups like Hamas, including: 

•  A deputy school principal serving as an al-Qassam deputy company commander in the Ain Gallout/5th infantry battalion.
• A deputy school principal serving as squad leader for the Khan Younis Brigade/2nd infantry battalion. 
• A teacher serving as squad leader in Hamas’ military security department/intelligence unit who tracked assignment of explosive devices.
• A teacher serving as a platoon commander of the Central Brigade/Al Quds 2nd Battalion.
• A math & computer teacher with ties to an al-Qassam intelligence squad.
• A teacher with expertise as a sniper for Hamas.
• A teacher and Hamas soldier with orders to bring two anti-tank missiles to a prescribed location during the October 7 terror attacks
• A school principal who served as an operative of the Hamas East Jabaliya Battalion, and coordinated communications with other suspected Hamas members during the October 7, 2023 atrocities committed against Israel 

Similarly, the same USAID watchdog revealed that the Yemen-based terror Ansar Allah — also known as the Houthis—walked away with about $122,000 worth of U.S. government-funded equipment from a USAID-funded aid organization.

$17 million of the $21 million of food aid stored in warehouses was not distributed to emergency food providers. Some good-intentioned aid also was wasted by bad management and logistics, the audits show.

For instance, about $17 million of the $21 million of food aid stored in Djibouti warehouses was not distributed to emergency food providers.

That included $10 million of goods at risk of reaching its best-used-by date prior to arriving at its intended destination. About $2.9 million of food aid had already spoiled due to significant packaging defects by the vendor, investigators reported.

To make matters worse, taxpayers incurred at least nearly $500,000 in storage costs for spoiled, unusable food. And another $1.5 million in food became infested because USAID “did not enforce temperature control requirements,” eventually requiring additional fumigation costs, the memos stated.

U.S. food aid in Ethiopia ended up being sold for pennies on the dollar

Some U.S. food aid in Ethiopia also ended up being sold for pennies on the dollar in online stores instead of reaching people in need, one report revealed.

“The investigation identified indicators of potential vulnerabilities across multiple stages of the supply chain that could allow for diversion,” USAID’s inspector general said.

Lack of common sense was cited at USAID’s Bureau for Humanitarian Assistance when it provided food and healthcare plus good old-fashioned cash payments to help support displaced people in the West Bank and Gaza. 

“Although providing cash can be flexible and more cost effective than providing in-kind commodities, it is also susceptible to fraudulent activity such as misappropriation and theft,” the IG warned. “Having controls over cash assistance is important for mitigating risks of fraud in humanitarian aid programming, such as diversion to U.S.-designated terrorist organizations.”

Trump’s historic reduction of foreign aid has touched off a political firestorm among Democrats, who accuse the administration of starving struggling nations overseas for fraud they claim is minuscule in the big picture of government.

But the fraud examples uncovered by the federal agency watchdogs has provided Republicans a powerful counter narrative about the victimization of generous American taxpayers.

House Oversight Committee Chairman James Comer recently told Just the News he thinks Democrats have a pecuniary interest in keeping foreign aid going despite strong indicators of fraud, suggesting nonprofit recipients of federal largesse are big Democrat donors.

“Well, I'm seeing a direct correlation of us cutting off the NGOs and the amount of money going to Democrat candidates and being funneled through,” Comer said. “…There was a reason I believe the Democrats raised all sorts of heck over Republicans wanting to dismantle USAID.”

Sometimes even when fraud is uncovered, prosecutions don’t occur, the memos show.

History of declining prosecution

When USAID’s Office of Inspector General determined a top official in Zimbabwe embezzled Pay As You Earn (PAYE) taxes from the salaries of local employees for his own use, no prosecution occurred in America.

“Although the Finance Director was arrested and charged with theft (among other charges) by local authorities, the Country Director fled, and their location remains unknown,” the IG recently reported. “The Department of Justice declined to pursue Federal prosecution. OIG also referred the individual to USAID for consideration of suspension and debarment action. However, no action was taken.”

Likewise, a top official at a US-funded nonprofit in Zambia allegedly embezzled approximately $193,295 through altered bank account transactions. While the nonprofit reimbursed for some of the lost funds, “the Department of Justice Office of Foreign Litigation and U.S. Attorney’s Office for the District of Colombia declined to pursue Federal or local prosecution,” one memo disclosed.

Since the Trump administration took over, efforts to recover funds lost to foreign fraud have ramped up.

For instance, a woman convicted in 2024 of defrauding a US-funded global nonprofit of approximately $425,000 over many years entered into a civil settlement last month with the Department of Justice and agreed to pay $160,000 to resolve allegations that she violated the False Claims Act.

Last fall, a Pakistani man was sentenced for conspiracy to commit theft while working as a contractor la USAID-funded power distribution program in Pakistan that involved a years-long kickback scheme that went infected.

The man allegedly arranged for local vendors to provide services for substantially less than the rates in the purchase orders and kept the difference, prosecutors said.

One of the largest foreign aid grifts uncovered in the last couple of years finally was unmasked last summer, ultimately costing taxpayers a half billion dollars, officials 

In the scheme that dates to the Obama-era of foreign aid, a federal contracting officer and three businessmen pleaded guilty to bribes involving cash, NBA tickets, and a country club wedding to secure lucrative contracts that totaled about $550 million.

The defendants were about to score again in November 2023 under President Joe Biden’s open border policies, with one of their companies being awarded a contract worth up to $800 million to among other things address "a variety of issues affecting the root causes of irregular migration from Central America to the United States.”

USAID’s watchdog, however, prompted the cancellation of the contract based on "evidence of conduct of a lack of business honesty or integrity."