In a stunning report released earlier this month, the Middle East Forum (MEF) revealed that terror-linked organizations have received $164 million from the U.S. State Department and the U.S. Agency for International Development (USAID) — which provided the largest share ($152.9 million) — based on incomplete foreign aid data that dates back to 2007. According to MEF, numerous terror-linked organizations have obtained public funding through subawards on larger grants given to more established, mainstream organizations.

The Trump administration has made the suspicious character of some foreign aid recipients into a salient issue with its immediate push to institute drastic reforms at USAID. Within the first week of his administration, the White House froze all foreign aid spending, furloughed most USAID staff, and appointed Secretary of State Marco Rubio as Acting Administrator of USAID. The goal of these actions is not to abolish all U.S. foreign aid, but to restructure into an effective tool of U.S. foreign policy under the auspices of the State Department.

In fact, USAID’s own Office of the Inspector General (OIG) has been calling for serious reforms for years, with little effect. Among the necessary reforms, USAID must adopt better procedures for vetting not only organizations that receive an award, but also the organizations that receive sub-awards. (Essentially, large organizations bid for awards on various projects, then they often subcontract the work out to other organizations, who actually receive the funds and perform the work.)

The MEF included one example in particular that highlighted this problem. In 2014, USAID awarded more than $700,000 to World Vision, a large evangelical charity, to “improve water, sanitation and hygiene and to increase food security in Sudan’s Blue Nile state.” Of that grant, World Vision sub-contracted with the Islamic African Relief Agency, also known as the Islamic Relief Agency (ISRA), to perform part of the work for $200,000.

The problem is that the Khartoum, Sudan-based ISRA was a known financier of terrorists. It established formal cooperation with Maktab al-Khidamat (MK), Osama bin Laden’s precursor to al-Qaeda, in 1997, MEF described. By 2000, ISRA had raised $5 million for bin Laden and even offered to “help relocate [bin Laden] to secure safe harbor for him,” according to the Treasury Department, which sanctioned ISRA for financing terrorists in 2004.

In 2010, a U.S. branch of ISRA, the Islamic American Relief Agency (IARA) was shut down after it illegally transferred $1.2 million to Iraqi insurgents. At the time, USAID said it canceled $1.3 million worth of contracts with IARA and barred it from obtaining further awards. At least three people involved in the scheme pled guilty to charges of conspiracy, theft of public funds, and money laundering, and at least five people were sentenced to prison in 2012, including former Michigan Congressman Mark Siljander.

Yet, only two years later, World Vision was working with ISRA in Sudan on a USAID contract. “In a press release, World Vision claimed they were not aware of ISRA’s status before partnering with them and appeared to shift the blame for this incident to the United States government,” reported the Oversight and Investigations Unit of the Senate Finance Committee, in a December 2020 letter to Finance Committee Chairman Senator Chuck Grassley (R-Iowa). “First, they claim that on two separate occasions, two different government agencies were notified that World Vision was working with ISRA and neither agency raised any concerns. Second, World Vision argues that the online search tool provided by the Treasury Department made it difficult to ascertain whether or not ISRA was a sanctioned entity.”

The terror connection was only discovered when a separate organization, the International Organization for Migration (IOM), vetted World Vision and its partners regarding a separate humanitarian project. To their credit, when told that ISRA was sanctioned for terrorist activities in September 2014, World Vision immediately ceased all payments to ISRA. Two months later, they contacted the Office of Foreign Assets Control (OFAC) requesting clarification of ISRA’s status and a temporary license to complete the existing contract anyway.

The Treasury Department denied such a license in January 2015, but in February, “World Vision again requested a license to transact with ISRA in order to pay them $125,000 for services rendered. In its request, World Vision stressed that it could face severe legal consequences and even expulsion from Sudan if it did not pay ISRA the monies owed.”

In May 2015, the OFAC issued a “Cautionary Letter” to World Vision “notifying it that the transactions they engaged in with ISRA appear to have violated the Global Terrorism Sanctions Regulations.”

“We did not find any evidence that World Vision intentionally sought to circumvent U.S. sanctions by partnering with ISRA. We also found no evidence that World Vision knew that ISRA was a sanctioned entity prior to receiving notice from Treasury,” wrote the Finance Committee Oversight and Investigations Unit.

“However, based on the evidence presented, we conclude that World Vision … should have known how, but failed to, properly vet ISRA as a sub-grantee, resulting in the transfer of U.S. taxpayer dollars to an organization with an extensive history of supporting terrorist organization and terrorists, including Osama Bin Laden,” they continued. “Our review demonstrates this failure occurred because World Vision’s system for vetting prospective sub-grantees was borderline negligent and ignored elementary level investigative procedures.”

This is old news. The original incident occurred 10 to 11 years ago, and the Senate investigation quoted above concluded four years ago. The point in raising it here is to illustrate the consequences of inadequate vetting procedures. First, U.S. taxpayer dollars might be transferred to terrorist organizations in violation of financial sanctions designed to constrain the damage those organizations can cause. Second, mainstream aid organizations risk serious consequences including expulsion if, once begun, they stop their work with terror-aligned groups. Third, as long as mainstream aid organizations are in charge of vetting their own sub-awardees, they can commit similar sanction violations through negligence. If USAID has to vet an awardee’s vetting procedures, they may as well go ahead and take on the responsibility of vetting the sub-awardees too.

Nor is World Vision the only mainstream charity that has experienced problems with subgrantees. MEF noted that USAID provided $90,000 in a subgrant to Palestine Children’s Relief Fund (PCRF), “a front for Islamic Jihad,” through Catholic Relief Services. MEF also said that Catholic Relief Services had provided sub-grants to other terror-aligned groups, including ANERA, Bayader, and Islamic Relief.

The MEF report highlighted “a lone voice of internal concern” in the OIG, which notes that “the only individuals subject to USAID’s [vetting] procedures are those whose implementing partners and their subawardees self-identify as ‘key individuals.’” Additionally, writes MEF, “OIG memoranda note that current vetting procedures are patently unable to identify ties between aid organizations and designated terrorist groups; and fail to keep track of sub-awardees and their activities.”

This accords with the prevailing laxity and imprecision the MEF identified in the agency. In explaining why their records of foreign aid recipients were incomplete, MEG complained, “records of federal funding, particularly through USAID, are obfuscated by deficient disclosure practices, deleted data, and deliberate attempts to evade transparency, with millions of dollars given to anonymous beneficiaries in terrorism-stricken areas of the globe.”

If nothing else, this sounds like an agency in need of reform. In his typically disruptive style, this is exactly what President Trump is trying to accomplish, and proponents of good government — of whatever political stripe — should be willing to help his administration accomplish that goal.