USAID’s Fall from Grace

How America’s Aid Empire Fueled Chaos and Lost to China

If you like articles from The Big Con, hit the like button, subscribe, comment, and recommend us in your Substack recommendations. It really helps get the newsletter to more people.

Imagine a Syrian refugee, displaced by war, watching American aid trucks roll in—only to learn those funds may have armed the very factions tearing her country apart. Or a Brazilian voter, loyal to Jair Bolsonaro, discovering U.S. dollars allegedly backed his rival’s rise. For decades, the U.S. Agency for International Development (USAID) was America’s beacon of soft power, building allies and stability since President Kennedy launched it in 1961. Today, it’s a leaky ship, sinking under bureaucracy, ideological crusades, and covert missteps that have handed China the upper hand in the global race for influence.

As China’s Belt and Road Initiative paves roads and ports across Asia, Africa, and Latin America, 19 of USAID’s top 20 recipient countries—nations receiving billions in U.S. aid—have joined Beijing’s orbit. Why? China offers no-strings infrastructure; USAID, tangled in social agendas and opaque spending, alienates partners and fuels chaos. From Syria’s power vacuum to Hungary’s anti-American backlash, USAID’s alleged overreach has sparked a global blowback, undermining U.S. interests and empowering adversaries.

A February hearing, “How Foreign Aid Undermined U.S. Interests Around the World,” revealed fundamental differences in how Democrats and Republicans envision American foreign assistance. Republican witnesses criticized USAID's focus on "social re-engineering" through programs promoting transgender rights, diversity initiatives, and climate change mitigation. Max Primorac testified that when African officials met with Secretary Blinken, "they were ready to talk counter-genocide. Instead, they got social re-engineering." Republicans argued this approach alienates traditional societies and drives them toward China's infrastructure investments.

Democrats noted that USAID represents less than 1% of the federal budget while supporting American farmers (who provide 40% of food aid), preventing disease outbreaks, and creating markets for U.S. products. Congressman Garcia contrasted scrutiny of USAID's budget with minimal oversight of defense programs like the $183 billion over-budget F-35 fighter.

With the Trump administration’s Department of Government Efficiency (DOGE) now dismantling USAID, the question looms: Can America’s aid be salvaged, or is it time to rethink soft power entirely?

The Experts: Perspectives on USAID's Internal Governance

Max Primorac
Former USAID Official
Senior Research Fellow, The Heritage Foundation
Max Promorac argued that USAID has strayed from its original mission of combating Soviet imperialism and promoting American interests. He claimed the Biden administration used USAID to fund a radical agenda promoting climate, DEI, and LGBT initiatives that alienated potential allies. Primorac alleged that USAID's current approach helped China by pushing countries away from the US through social re-engineering programs while neglecting infrastructure investments. He criticized USAID's approach to counter-terrorism vetting, claiming Biden overturned regulations implemented during the Trump administration.

Gregg Roman
Executive Director, Middle East Forum
Greg Roman focused on alleged terror financing through USAID. He claimed his organization identified $122 million in USAID funds that ended up supporting radical or terrorist-linked organizations. Roman provided specific examples, including World Vision facilitating a sub-grant to the Islamic Relief Agency (linked to Al-Qaeda), money flowing to Helping Hand for Relief and Development (allegedly working with terrorists), and funding for organizations in Gaza with Hamas connections. He criticized USAID's vetting process as weak, self-reporting, and lacking enforcement.

Tyler O’Neil
Managing Editor, The Daily Signal
Tyler O’Neil described connections between USAID and what he called "the left's dark money network." He alleged USAID has deep ties to George Soros's Open Society Foundations, the Tides Foundation, and Arabella Advisors, which he claimed influenced the Biden administration. O'Neil contended these organizations pushed ideological priorities related to DEI, transgender rights, and climate change through USAID funding. He emphasized the "revolving door" between USAID staff and these organizations, suggesting improper coordination.

Noam Unger
Director of the Sustainable Development and Resilience Initiative, Center for Strategic and International Studies (CSIS)
Noam Unger defended foreign assistance as critical to U.S. interests and national security. He argued that the Trump administration's abrupt dismantling of USAID is counterproductive and undermines American interests by creating a vacuum China is already filling. Unger highlighted USAID's historical successes in countering communism, fighting disease, and building economic partnerships. He emphasized that USAID passes audits and represents less than 1% of the federal budget while supporting American farmers and protecting against global threats.

J. Brian Atwood (Written Statement)
Senior Fellow and a member of the Board of Governors of the Watson Institute at Brown University
J. Brian Atwood, former USAID Administrator during the Clinton Administration, strongly rejects the premise that USAID undermines U.S. interests. Atwood argues that this view "demeans the motives of Presidents and Congresses past" who supported the agency with bipartisan backing for decades. He details how USAID addresses critical security threats with less than 1% of the national budget, including disease surveillance (49 monitoring sites now shut down), programs like PEPFAR (saving 26 million lives), reducing migration through economic opportunity, and countering China's Belt and Road Initiative. Atwood highlights USAID's role in reducing global extreme poverty from 59% to 8% since 1950, warns against Russian and Chinese disinformation designed to undermine the agency, and argues that while reforms may be needed, the current dismantling approach "is not reform; it is destructive and counterproductive" to American national security.

The Drift from Kennedy’s Vision

USAID was born to counter Soviet influence, promote self-sufficiency, and open markets. Yet, Republican witnesses at a February 2025 congressional hearing, “How Foreign Aid Undermined U.S. Interests Around the World,” argued it’s become a tool for “social re-engineering.” Max Primorac, a former USAID official, testified, “When African officials met with Secretary Blinken, they were ready to talk counter-genocide. Instead, they got social re-engineering.” Programs pushing transgender rights ($2 million in Guatemala), LGBT job opportunities ($1.5 million in Serbia), and climate initiatives have alienated traditional societies, driving them toward China’s pragmatic deals.

Democrats counter that these programs reflect American values and address global threats. Rep. Stansbury noted Pacific allies, facing Chinese authoritarianism, specifically request climate aid. Noam Unger of CSIS emphasized USAID’s successes: “It’s less than 1% of the federal budget but supports American farmers, prevents disease outbreaks, and counters China’s influence.” J. Brian Atwood, former USAID chief, added, “Dismantling USAID is not reform; it’s destructive and counterproductive,” citing its role in cutting global poverty from 59% to 8% since 1950 and saving 26 million lives through PEPFAR.

Yet, the numbers tell a stark story: 19 of USAID’s top 20 recipients are Belt and Road members, including South Africa, which Primorac called “China’s main African partner” despite billions in U.S. aid. This strategic failure, coupled with allegations of covert interference, has fueled bipartisan calls for reform.

USAID's Alleged Meddling: A Trail of Blowback

The hearing exposed a deep rift over USAID’s role. Republicans branded the agency a tool of cultural overreach, with Max Primorac quoting Pope Francis’s charge of ideological colonization that is “pushing a radical ideology onto the developing world.” Far from spreading democracy, they argued, USAID funneled billions to reshape foreign governments, sparking global fires. Their testimony revealed a pattern of overreach that fueled chaos, empowered adversaries, and eroded America’s clout.

How did it go so wrong? Let’s unravel the blowback.:

• Syria’s Chaos: USAID allegedly poured $15 billion over a decade into opposition groups, mercenaries, and anti-government networks, masked as humanitarian aid. By 2024, this culminated in Bashar al-Assad’s overthrow, leaving a power vacuum where Hayat Tahrir al-Sham struggles amid rival factions. The fallout? Escalated tensions with Russia, a resurgent extremist threat, and global accusations of U.S. imperialism, as Iran and Belarus cracked down on NGOs citing American meddling.

• Ukraine’s War: In 2014, USAID’s billions in civil society funding allegedly fueled the Euromaidan uprising, toppling Viktor Yanukovych. Russia’s response—annexing Crimea and igniting the Donbas conflict—escalated into the 2022 invasion. The blowback deepened anti-Western sentiment and emboldened authoritarian regimes like Azerbaijan to expel USAID, fearing similar “coups.”

• Brazil’s Divide: Chairwoman Greene claimed USAID spent tens of millions on propaganda and censorship laws to silence Jair Bolsonaro, a conservative ally of the United States, paving the way for Lula da Silva’s 2022 victory and Bolsonaro’s 2023 electoral ban. The result? A polarized Brazil, strained U.S. ties, and a government wary of Western NGOs as Trojan horses.

• Hungary’s Defiance: Viktor Orban, Hungary’s firebrand conservative and Trump ally, found himself in USAID’s crosshairs. The agency channeled funds to opposition media like Atlatszo, which drew 10–15% of its budget from USAID, to challenge Orban’s rule. In response, Orban cracked down, tightening media and NGO controls, and steered Hungary closer to Russia and China. DOGE’s 2025 USAID funding freeze, cheered by Orban, left outlets like Atlatszo strapped, raising fears that Russian propaganda could gain ground in a NATO ally already cozy with the Kremlin.

• India’s Mistrust: Brandon Gill alleged USAID tried to sway elections against Narendra Modi in 2024. Since Modi won, India’s crackdowns on NGOs and surging nationalism strained the U.S.-India partnership, critical for countering China.

• Albania and Romania’s Instability: Judicial reforms in Albania allegedly led to the prosecution of opposition leader Sali Berisha, a critic of the socialist prime minister, deepening political divides. Testimony suggested that USAID collaborated with George Soros's Open Society Foundations in implementing these changes. In Romania, Greene accused USAID of “canceling elections” in 2024, eroding democratic trust and amplifying Russian influence in Eastern Europe.

Democracy Promotion or Foreign Intervention?

Witness Noam Unger defended these programs as continuing the tradition established by President Reagan in his Westminster speech, where he called for democracies to support other democracies. Democrats emphasized that many of these programs were established with bipartisan support and continued across multiple administrations, including under Presidents Bush and Trump, suggesting they represent enduring American interests rather than partisan projects.

The Republican narrative, while politically motivated and often exaggerated, tapped into real concerns about overreach, as historical U.S. interventions—from Guatemala to Iran—have long produced unintended consequences. This blowback—geopolitical instability, strengthened authoritarianism, eroded U.S. credibility, and anti-Western sentiment—reveals a paradox: USAID’s push for democracy often backfired, alienating allies and empowering foes. By targeting leaders like Assad and Yanukovych, the U.S. sparked conflicts and power vacuums. By allegedly meddling in allies like Hungary and India, it alienated partners and strengthened adversaries. The Soros connection, while speculative, amplified perceptions of a coordinated Western agenda, uniting disparate regimes in their rejection of U.S. influence.

Are USAID’s interventions—backing Syria’s opposition, funding Hungary’s media, or allegedly rigging Brazil’s elections—truly about democracies uplifting each other, as Noam Unger claims? Or do they expose American power brokers rejecting leaders like Orban or Modi who stray from Washington’s playbook? These moves, fueling chaos from Syria to Brazil, show a refusal to let nations chart their own course. Supporters argue they shield democracy from authoritarian creep, but using authoritarian tactics to fight authoritarians is itself an authoritarian ploy.

The US-China Rivalry for Global Influence

The effectiveness of U.S. foreign aid affects America's global standing, alliance networks, and ability to counter China's growing influence in developing regions. Primorac testified that 19 of the top 20 USAID recipients are members of China's Belt and Road Initiative, suggesting that despite receiving American aid, these countries were aligning economically with China. He cited South Africa as an example, noting it "has received billions of American aid dollars yet is China's main African partner" and "supports Hamas and Iran and opposes us at every turn at the United Nations."

Should U.S. Foreign Aid Infrastructure or Ideology?

Strategic competition with China emerged as another critical theme, with competing development models vying for global influence. While China's Belt and Road Initiative offers infrastructure investments without governance conditions, USAID incorporates American values alongside economic assistance.

Republicans argued USAID's emphasis on social programs undermines American interests abroad. Primorac stated developing nations "sought more trade with and investment from America to bind our countries together, but instead they got transgender, diversity, and abortion programs that have alienated billions of people." Congressman Burlison characterized this approach as "alienating the United States on the world stage."

Democratic witnesses defended USAID's approach as reflecting core American values and addressing global challenges like climate change. In contrast, witnesses consistently portrayed China's Belt and Road Initiative as more appealing to developing nations because it offered concrete infrastructure investments—roads, bridges, ports, and telecommunications—without imposing social conditions or ideological requirements.

Primorac described China's appeal with a vivid metaphor: "China is like gangsters... the biggest, baddest guy offering you money when you want it, like a loan shark... But a lot of people that are desperate for money, they go for that."

The fundamental question emerged: Should US foreign assistance prioritize immediate infrastructure needs without conditions, or continue promoting American values alongside development?

China: Competitor or Ally?

During questioning, Republican members highlighted the contradiction of sending taxpayer dollars to the world's second-largest economy while simultaneously identifying China as America's most significant geopolitical rival. They argued that providing any foreign assistance to America's primary strategic competitor fundamentally contradicts U.S. interests, especially as China actively expands its global influence through the Belt and Road Initiative.

Witness testimony revealed that some USAID projects in China focus on civil society development, climate initiatives, and health programs. However, Republican witnesses characterized these efforts as ineffective or counterproductive, arguing they ultimately strengthen the Chinese government rather than advance American strategic objectives. Max Primorac testified that such funding represents a "strategic incoherence" in America's approach to China, especially when these programs align with Chinese governmental priorities like climate initiatives.

The discussion connected to broader concerns about the strategic alignment of foreign aid with national security priorities. Representative Fallon pointedly asked, "Do you know if USAID sent any funding toward lab research in Wuhan, China?" The committee discussion suggested that sending aid to China represented a fundamental failure in prioritizing American interests, with members calling for a complete reassessment of which countries should qualify for U.S. assistance based on their alignment with American security objectives.

Accountability and Oversight concerns

The hearing exposed significant accountability gaps in USAID's operations, raising bipartisan concerns about fund management and transparency. Republican witnesses highlighted structural issues in how aid is tracked and distributed, particularly through the "miscellaneous foreign awardees" category that allows billions to flow with limited documentation.

Who Controls the Purse Strings?

A significant theme throughout the hearing was the role of unelected bureaucrats in directing foreign aid. Republican witnesses emphasized how unelected officials control USAID funding with limited oversight or democratic accountability. Max Primorac testified that while policy theoretically flows from leadership, "in the end, contract officers have to make sure at the Office of Acquisition Procurement that these are following U.S. laws and the policies of the President." When directly questioned by Congressman Cloud whether any decision-makers face electoral accountability, Primorac confirmed "there is no one at USAID that is elected."

Critics pointed to evidence of partisan bias within the bureaucracy that may influence funding priorities and recipient selection. Chairwoman Greene cited statistics showing "96% of all political contributions from USAID employees go to Democrat party candidates or PACs," suggesting an ideological imbalance within the agency. Tyler O'Neil described what he characterized as a "revolving door" between USAID staff and organizations like Open Society Foundations, the Rockefeller Foundation, and Arabella Advisors, claiming these connections created conflicts of interest in funding decisions.

Both sides acknowledged the need for transparency but disagreed fundamentally about whether the solution was reforming existing systems or completely rebuilding them after a pause in funding.

The Buck Stops… Where?

At the heart of USAID’s woes is a lack of accountability. Republican witnesses exposed a system where billions flow through “miscellaneous foreign awardees” with minimal tracking. Max Primorac called it “an aid industrial complex that refuses accountability.”

Several reasons were provided for these tracking issues:

1. Deliberate Opacity: Republican witnesses suggested the lack of transparency was sometimes intentional to shield controversial funding decisions from scrutiny. Max Primorac characterized the system as "an aid industrial complex that refuses to have accountability and oversight."

2. Lobbying Influence: Testimony alleged that NGO lobbies like InterAction actively work against increased transparency requirements, including having "tried to kill legislation, like H.R. 160, which was meant to increase transparency in USAID's funding of overseas organizations."

3. Emergency Waivers: The system of waivers for humanitarian emergencies was described as circumventing normal tracking procedures.

4. Bureaucratic Resistance: Witnesses claimed bureaucrats intentionally avoid creating transparent tracking systems to maintain flexibility and avoid accountability.

5. Outdated Systems: Roman described USAID's vetting system as "archaic, relying heavily on self-reported data with no real-time checks or teeth," suggesting the technological infrastructure for proper tracking is simply inadequate.

Democrats and witness Noam Unger outlined five existing oversight mechanisms: congressional notification processes, implementing partner audits, counter-terror vetting in high-risk contexts, inspector general investigations, and the ability to halt programs at the first sign of large-scale waste or diversion. He argued that the Trump administration's gutting of USAID staff had actually weakened these oversight capabilities rather than strengthening them.

Links to Terrorism Financing

The most explosive allegations centered on USAID money flowing to terrorist organizations. Primorac testified, "You have international NGOs and U.N. agencies actively lobby here in Washington, DC, against vetting policies that would prevent [funding going to terrorists]." This suggests UN agencies were directly involved in lobbying efforts against stricter vetting procedures, which helps China.

Gregg Roman testified that the Middle East Forum had identified $122 million in USAID funds that ended up supporting radical or terrorist-linked organizations, including:

• Jammal Trust Bank: According to Gregg Roman's testimony, "The USAID dollars helped pad the pockets of this financial institution, later designated by the U.S. Treasury Department as a terrorist sponsor for sponsoring Hezbollah. Roman characterized this funding as "no mere oversight" but rather evidence of "a broken system that handed cash to a future terror-financing entity.”

• InterAction: According to testimony, InterAction received approximately $5 million annually from the State Department during the period discussed. Roman characterized InterAction as pushing "disinformation to protect the status quo and sabotage meaningful congressional oversight." He described it as "the largest NGO lobby interaction" that works against transparency in USAID funding. According to testimony, Roman claimed a co-witness at the hearing previously worked for InterAction "from 2018 to 2023."

• Together Project: No specific funding amount was provided for the Together Project itself, but Roman described it as an umbrella organization formed by Islamist organizations. He testified: "Islamist organizations, which work with designated terror organizations in different Middle Eastern countries and territories came under attack by our organization, the Middle East Forum, back in 2017. They put together a lobby, which acted as an umbrella to go to Congress to say, ignore that organization that is exposing public data about money going to radical organizations, they are so-called 'Islamophobic.'"

• World Vision: Roman testified that "over the past two decades, this major evangelical NGO has received nearly $2 billion from USAID." He specifically highlighted that in 2014, World Vision facilitated a $125,000 sub-grant to the Islamic Relief Agency, which was linked to Al-Qaeda.

• Helping Hand for Relief and Development: Described as receiving a $78,000 grant from USAID in 2023 "despite openly working with the terrorist who orchestrated the 2008 Mumbai Massacre."

Witnesses noted the double standard that private citizens sending money to these same organizations could face 20-year prison sentences for material support of terrorism, while the government continues to fund them through waivers and lax enforcement. Democrats, while not defending terrorism financing, emphasized that cutting off all aid would cause greater humanitarian suffering and potentially create more instability and terrorism.

Reforms: Proposed and In Progress

The USAID hearing produced sharply contrasting visions for reforming the agency, reflecting fundamental disagreements about its purpose and accountability. While both sides acknowledged the need for improved transparency and oversight, they diverged significantly on implementation approaches, with Republicans advocating for comprehensive structural changes and Democrats defending the existing framework while supporting targeted improvements.

The Republican narrative, while politically motivated and often exaggerated, tapped into real concerns about overreach, as historical U.S. interventions—from Guatemala to Iran—have long produced unintended consequences. The collective blowback from these alleged USAID operations reveals a paradox: efforts to promote democracy and Western interests often undermined both. By targeting leaders like Assad and Yanukovych, the U.S. sparked conflicts and power vacuums. By allegedly meddling in allies like Hungary and India, it alienated partners and strengthened adversaries. The Soros connection, while speculative, amplified perceptions of a coordinated Western agenda, uniting disparate regimes in their rejection of U.S. influence.

Democrats countered that USAID's democracy promotion activities represent legitimate support for universal values rather than regime change operations. Witness Noam Unger defended these programs as continuing the tradition established by President Reagan in his Westminster speech, where he called for democracies to support other democracies. Democrats emphasized that many of these programs were established with bipartisan support and continued across multiple administrations, including under Presidents Bush and Trump, suggesting they represent enduring American interests rather than partisan projects.

The solution proposed by Republican witnesses was creating "a consolidated website where every single award and subaward is on there, but not only can Members of Congress look at it, but the American people who fund this can go through it." They argued this transparency would force accountability through public scrutiny.

Republican Reform Proposals

Republican witnesses outlined a comprehensive overhaul focused on transparency and accountability mechanisms:

1 - Shift USAID's focus from perpetual assistance to fostering self-sufficiency through infrastructure investment and economic partnerships. Successful recipients should transition from assistance to trade and investment partnerships

2 - Congress, media, and taxpayers should be able to access details for all awards and subawards—including grant outcomes—not just funding amounts. Provide full transparency through public websites, tracking all aid and connecting employee IDs to specific funding decisions.

3 - Eliminate self-certification and require direct verification against terrorist databases for all funding recipients.

4 - Pursue criminal investigations for terrorism financing violations.

5 - Replace the "archaic" system relying on "self-reported data" with real-time oversight tools.

6 - Add clawback provisions to recover misused funds.

Democratic Defense of Existing Mechanisms

Democrats and witness Noam Unger maintained that USAID already possesses robust oversight capabilities that were undermined by recent staffing reductions:

1 - The current system already incorporates multiple layers of oversight that could function effectively with proper staffing and implementation.

2 - Maintaining adequate professional staffing ensures proper oversight, not necessarily new mechanisms. Technical expertise of career staff essential for effective oversight

3 - Reforms should preserve USAID's broader humanitarian and development objectives. Pausing programs during restructuring would create humanitarian suffering while opening strategic opportunities for adversaries like China to expand influence

DOGE’s Reckoning: Reform or Ruin?

Enter DOGE, which froze USAID’s funding, canceled 83% of its programs (5,200 contracts), and locked out staff, aiming to merge the agency into the State Department. Since the hearing in February, DOGE’s key actions tackle systemic payment transparency issues, partially addressing concerns about USAID’s untraceable funds and wasteful spending.

• Mandatory TAS codes: USAID’s complex global transactions make traceability critical—especially for programs in conflict zones like Syria—where oversight is challenging. The TAS code mandate ensures that USAID payments are tied to specific appropriations, reducing the risk of funds being diverted to unapproved activities, such as alleged support for Syrian opposition groups. Additionally, USAID’s compliance with the Payment Integrity Information Act (PIIA) in 2023 suggests it already had mechanisms to reduce improper payments, though these were not foolproof.

• Automated Payment Verification System: By rejecting payments with invalid codes, the system enhances real-time accountability, addressing concerns about USAID’s “dangerous spending” raised by Senator Joni Ernst. It could prevent funds from reaching unvetted NGOs or media outlets, as alleged in Hungary and Brazil, reducing the risk of blowback like authoritarian crackdowns.

• Public Disclosure of Grant Payments: USAID’s transparency efforts, like ForeignAssistance.gov and the Greenbook, already provide public data, but critics argue these lack detail on program outcomes. DOGE’s posting of 37,207 grant payments on doge.gov aligns with USAID’s IATI commitments but aims for greater granularity, potentially exposing questionable grants like those allegedly targeting Orban or Modi.

• “Defend the Spend” System: This system forces USAID to articulate the strategic value of its programs, potentially weeding out those misaligned with U.S. interests, as Rubio emphasized. It could reduce funding for controversial initiatives, like Brazil’s alleged anti-Bolsonaro propaganda, minimizing blowback such as strained U.S.-Brazil relations. HHS’s involvement suggests scalability across agencies.

However, they fall short of resolving the strategic transparency needed to prevent blowback from alleged operations in Syria, Ukraine, and elsewhere, which require clarity on program intent and impact.

DOGE’s moves, while curbing waste, risk new blowback: Critics, including Atwood, warn this “creates a vacuum China’s filling.” Plus, DOGE’s own transparency flaws—error-filled claims and secretive operations—undermine its reforms, raising doubts about whether it’s fixing USAID or breaking it.