Trump administration considering criminal referrals in USAID fight
The Trump administration is signaling it may bring criminal referrals against employees of the U.S. Agency for International Development (USAID) or grantee recipients over allegations of misuse of foreign assistance, which would mark an extraordinary next step in the administration’s push to gut the agency.
Peter Marocco, who is serving as acting deputy administrator for USAID, told lawmakers in a closed-door briefing Wednesday that he and his staff are looking at making criminal referrals to the Department of Justice, according to two people familiar with the conversations.
It’s unclear if Marocco will follow through on the threat, said one person who was in the room during the briefing, but they saw it as a significant signal, coming up in a meeting with members of the House Foreign Affairs Committee.
A January memo from the USAID Office of Inspector General (OIG) laid out resistance from some aid grantees over sharing information that officials say is needed for oversight and accountability. The OIG memo highlighted $8 billion that was primarily distributed to United Nations agencies and multilateral development banks which they criticized as being shielded from scrutiny.
However, an OIG advisory notice on Feb. 10 warned that the Trump administration’s mass layoffs of USAID staff and contractors, and a freeze on foreign aid, hindered oversight and the safeguarding of $8.2 billion in obligated humanitarian assistance. Both OIG reports were authored by Paul K. Martin. A veteran of Trump's first term who was appointed by Biden on Jan. 2, Martin was dismissed on Feb. 11.
The State Department, when reached for comment, said it generally does not comment on communications and briefings with Congress. Secretary of State Marco Rubio is the official head of USAID, but Marocco has been a leading figure in efforts to gut the agency.
Criminal referrals would further escalate tensions between the Trump administration and Elon Musk’s Department Of Government Efficiency team on one side, and government employees, foreign aid recipients and Democrats on the other. Some Republicans have privately advocated for certain programs and spending priorities behind the scenes.
Democrats slammed the Wednesday meeting with Marocco, saying little information was learned about the Trump administration’s decision to carry out mass layoffs related to USAID and terminate thousands of funding grants, amounting to about $60 billion.
“We asked specifically what American companies who have been contracted with the State Department, contracted with the USAID, have been terminated and why. He refused to answer the question,” Rep. Sydney Kamlager-Dove (D-Calif.) said.
“While he contradicted himself, saying that they have detailed documentation on all of the programs, on all of the vendors, and yet somehow he is not able to provide that information.”
Democrats complained the briefing occurred behind closed doors and not publicly, lasted only one hour and permitted each lawmaker 30 seconds to ask questions, with few if any follow-ups allowed. Marocco was given two minutes to answer each question.
“He couldn't address why errors were made, he couldn't give us any specifics on how they are conducting this review,” Rep. Sara Jacobs (D-Calif.) said.
“He couldn't give us answers on what specific programs are turned off or turned on, and he wouldn't even commit to providing us written accounting of what the money is going to and what is being turned on and what is being turned off. So I think it's clear that this is anything, but an actual methodical review.”
And not all Republicans were comfortable with Marocco’s briefing.
Rep. Michael McCaul (R-Texas), chair emeritus of the committee, said Marocco told the group that waivers, meant to exempt lifesaving foreign assistance, were not being “fully implemented.”
“They have lifesaving, humanitarian assistance waivers, and they need to implement them,” McCaul said. The former chair left the hearing after about 30 minutes. Outside, HIV/AIDS activists protested the hearing, shouting “Marocco has blood on his hands! Unfreeze aid now!”
Still, Republicans have rallied around grants to programs they oppose, such as LGBTQ inclusion and visibility programs, or education grants for refugees.
“Mr. Marocco was very clear in exposing the waste that goes on out there, in pointing out the way that many of these programs at State and USAID were designed to not be accountable and making sure again that the priority is to put dollars into programs that save life — food, medication and things like that — and not all the other BS that is going on, the radical liberal things,” said Rep. Brian Mast (R-Fla.), the committee chair.
Marocco met with lawmakers shortly after the Supreme Court rejected the Trump administration’s request to keep billions of dollars in foreign aid frozen, sending the case back to the lower courts and potentially allowing the administration to continue to dispute the order.
“The big question was: Would they abide by the Supreme Court's ruling? That question was never answered,” Rep. Gregory Meeks (D-N.Y.), the ranking member of the committee, said to reporters following the closed-door briefing.
“He didn't answer the question. He's gotta go back to talk to his people.”
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