Key Takeaways
- •The subcommittee reviewed systemic oversight failures in foreign assistance following the Trump administration's dismantling of USAID and the subsequent transfer of aid programs to the State Department.
- •Adam Kaplan (Deputy Inspector General, USAID OIG) testified that the United Nations frequently obstructs fraud investigations and lacks the rigorous staff vetting required of other aid contractors.
- •Rep. Jared Moskowitz (D, FL-23) challenged the logic of dissolving USAID due to waste, noting that the Pentagon remains intact despite failing eight consecutive audits and losing trillions.
- •Rep. Warren Davidson (R, OH-8) criticized USAID for funding radical social agendas, while Democrats highlighted the "grotesque waste" of incinerating 500 metric tons of emergency food aid.
- •Latesha Love-Grayer (Director, GAO) warned that the State Department has delayed oversight inquiries for eight months, complicating efforts to ensure the new aid structure prevents future fraud.
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Hearing Analysis
Overview
The House Foreign Affairs Oversight and Intelligence Subcommittee held a hearing on March 17, 2026, titled "Waste, Fraud, and Abuse in Foreign Assistance: Lessons Learned and Charting a Path Forward." The hearing examined systemic vulnerabilities in U.S. foreign aid delivery, the effectiveness of internal controls, and the administrative consequences of the Trump administration's decision to shutter the U.S. Agency for International Development (USAID) and transfer its functions to the U.S. Department of State. Chairman Cory Mills (R, FL-7) convened the hearing to address how "bad actors" and terrorist organizations have exploited oversight gaps, while Ranking Member Jared Moskowitz (D, FL-23) and other Democrats argued that the dismantling of USAID was illegal, lacked a transition plan, and resulted in significant humanitarian loss and administrative waste.
Key Testimony
Witness testimony highlighted critical gaps in the oversight of international aid. Mr. Adam Kaplan, Deputy Inspector General for the USAID Office of Inspector General (OIG), identified three primary challenges: lack of transparency from the United Nations (UN), inadequate award terms, and insufficient staffing for monitoring. Kaplan specifically criticized the UN for "nonstop obstruction" regarding information sharing on investigations, noting that response times for information requests ranged from six months to two years. He also noted that UN staff are often exempt from the rigorous vetting required of other contractors, citing investigations into UN staff ties to Hamas. Kaplan highlighted a massive food diversion scandal in Ethiopia and monitoring failures in Ukraine as evidence of these systemic issues. Ms. Latesha Love-Grayer, Director of International Affairs and Trade at the Government Accountability Office (GAO), testified that while the State Department has assumed the role of primary aid provider, it has failed to implement 29 of 51 GAO recommendations regarding fraud risk management. She noted that agencies often lack program-specific fraud assessments and fail to use data analytics to identify unusual spending patterns.
Overview
Policy proposals discussed during the hearing focused on strengthening legal and administrative controls. Mr. Kaplan urged the implementation of a mandatory disclosure clause for UN awards and the inclusion of "forum selection clauses" in agreements with foreign NGOs to ensure they can be sued for fraud in U.S. courts. Rep. Gabe Amo (D, RI-1) highlighted his "SUPPLIES Act," which would require the State Department to establish clear guidance on handling unused supplies to prevent aid from being destroyed or diverted. Rep. Warren Davidson (R, OH-8) discussed his "Aid Accountability Act of 2025," aimed at permanently defunding agencies that use aid to promote what he characterized as radical social agendas, such as abortion or LGBTQ+ initiatives, in violation of the Helms Amendment.
The hearing revealed a sharp partisan divide regarding the restructuring of foreign assistance. Chairman Mills and Rep. Davidson argued that USAID was an "autonomous" entity that ignored executive intent, funding "woke" initiatives like DEI programs and "transgender operas" while allowing funds to reach terrorist organizations like Al-Shabaab and Hamas. Conversely, Democratic members, including Rep. Madeleine Dean (D, PA-4) and Rep. Sara Jacobs (D, CA-51), argued that the "illegal" closure of USAID has led to the deaths of hundreds of thousands of people due to the suspension of life-saving health and nutrition programs. They pointed to the incineration of 500 metric tons of emergency food assistance—which cost $125,000 to destroy after being purchased for $800,000—as a primary example of waste created by the administration’s transition.
Several organizations were central to the discussion. USAID was the primary focus, with its legacy of oversight failures being weighed against its humanitarian impact. The State Department was scrutinized for its perceived lack of capacity and transparency in assuming USAID’s responsibilities; Ms. Love-Grayer noted that State has delayed responding to GAO inquiries for eight months. The United Nations and its agencies, including UNRWA and OCHA, were criticized for lack of transparency and potential ties to terrorist groups. The Department of Government Efficiency (DOGE) was mentioned by Ranking Member Moskowitz as having "sidelined Congress" during the restructuring process. Other entities mentioned included the U.S. African Development Foundation (USADF), which faced criticism for procurement red flags, and various NGOs like Mercy Corps, Save the Children, and Samaritan's Purse, which were discussed in the context of varying levels of transparency.
Notable exchanges included Rep. Dean’s forceful rebuttal of claims that USAID funded "transgender operas," asserting that such grants were actually State Department public diplomacy funds, not USAID development aid. Rep. Amo and Rep. Schneider (D, IL-10) pressed the witnesses on the "waste" of destroying food aid and the firing of nearly 10,000 USAID experts, which they argued decimated the government's ability to conduct oversight. Mr. Kaplan confirmed that the State Department and State OIG have attempted to limit the USAID OIG’s jurisdiction to "looking backwards" at pre-2025 allegations, despite recent appropriations language supporting continued USAID OIG oversight of all humanitarian and development funds. The hearing concluded with a call for greater cooperation from the State Department and the implementation of outstanding GAO recommendations.
Transcript
The subcommittee on oversight intelligence will come to order. The purpose of this hearing is to review waste, fraud, and abuse in US foreign assistance and to examine how ineffectively internal controls and oversight mechanisms have enabled bad actors to profit. I also just want to advise members and witnesses that votes are expected at 3:00 PM this afternoon. When votes are called, we will temporarily adjourn this hearing, should it not be already over, to allow members to participate and we will reconvene immediately thereafter. I appreciate everyone's flexibility and cooperation in advance. I now recognize myself for an opening statement. Good afternoon and welcome to today's oversight and intelligence subcommittee hearing entitled Waste, Fraud, and Abuse in Foreign Assistance: Lessons Learned and Charting a Path Forward. I'd like to thank our distinguished witnesses for appearing before the subcommittee today and for supporting our efforts to safeguard US taxpayers' dollars to expose waste, fraud, and abuse and hold accountable those who have been exploiting US generosity. As a nation, we should be embarrassed that funding for foreign assistance has too often strengthened America's adversaries, the same adversaries who have oppressed and terrorized the populations we sought to help. Whether through a local NGO, a large for-profit entity, or a public international organization, opportunistic bad actors have for years exploited pervasive weaknesses in the system of foreign assistance that we created. From my old time, my own time in Afghanistan, I witnessed firsthand how contracts profited enormously with little to show for it. Between 2005 and 2017, $259 million was spent on a road project that was never even completed. After 12 years, only about 15 percent of the road was built and even those sections that were completed quickly deteriorated. Contractors benefited from lack of oversight and took US taxpayer dollars without completing the projects. In 2025, the Special Inspector General for Afghanistan Reconstruction, SIGAR, estimated that as little as 30 to 40 percent of donor funds actually reached the intended population after the Taliban's and other fees, bribes, and extortion. Terrorists have extorted and enriched themselves through international aid around the world. For years, Al-Shabaab, a designated terrorist organization, extorted millions of dollars annually through collecting taxes, establishing roadblocks to UN aid. In the early 1990s, Somalian warlords deliberately starved their own people to encourage international aid and in line basically ply their own pockets. For decades, inspectors general and auditors have sounded the alarm to systemic oversight and accountability failures that have enabled waste, fraud, and abuse in foreign assistance. From the lack of internal controls in the early stages of awarding a grant or contract to the opaque layers of the subcontracting that follows, the bad actors at every single level have profited from US foreign assistance. In June of last year, a contracting officer for the United States Agency for International Development, USAID, received an estimated $1 million in bribes to repeatedly manipulate the procurement process, approve awards, and deceive USAID decision makers in favor of two awardees. Three owners and presidents of their respective companies also pleaded guilty for a decade-long bribery and fraud scheme that involved over $550 million in prime contracts. Last year, the president took an un- a very important step to end these wasteful and corruptive practices. With USAID's failures now behind us, we have an opportunity to chart a new path forward, a path that safeguards US funds and that does not enrich our enemies. A path that does not measure effectiveness by dollars spent but by real outcome that doesn't just benefit the intended recipients but also clearly make the United States safer, stronger, and more prosperous. Reform in foreign assistance has been long overdue and with that, I look forward to hearing how we can chart this new path together. With that, I will now recognize my ranking member, Representative Moskowitz.
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