The Foreign Aid-Industrial Complex Has Some Soul-Searching to Do

When surveyed, voters across the West, from the US and the UK to France and Germany, report wanting their tax dollars going toward social services at home while being less enthusiastic about various causes abroad. Governments have also realized that some recipients of their foreign aid have diverged sharply from their own objectives and values, and turned into proxies of anti-American, anti-Western influence campaigns. And so, after years of leaving foreign spending on autopilot, countries have begun to reign in overseas development to reflect the priorities of their electorates.

The danger of modern foreign aid mechanisms thus goes beyond frivolity of spending, and extends – thanks to a lack of oversight and an overreliance on middlemen with varying agendas – into countries’ funding of causes that threaten their own security and flirt with terror glorification and support.

Examples, unfortunately, abound. In December 2020, the US Senate’s Oversight and Investigations Unit made public its findings that major humanitarian NGO World Vision had knowingly channeled funds received from the US government’s development agency USAID to ISRA, an Al-Qaeda affiliate in Sudan. World Vision made these transfers nearly a decade after ISRA was designated as a terror entity by the US Treasury for ties to terrorists “including Osama Bin Laden.” For World Vision, this wasn’t an isolated incident either – in 2016, the organization’s Gaza manager was arrested for and later convicted of embezzling aid money to US-designated terror group Hamas, and “tak[ing] an active and significant part” in its activities.

The USAID black hole took other forms, too. An investigation by NGO Monitor, the independent research institute where I work, has uncovered highly problematic grants channelled through the Tides Network, an opaque “fiscal sponsor” entrusted by an array of federal sources to spend government money.

USAID, the Departments of State, Labor, Agriculture, and even NASA have sent Tides over $55 million since 2008, mainly allotted for civil society initiatives as part of a “Foreign Assistance Program” meant to “advance US foreign policy objectives.” Tides distributed the money to various bodies, theoretically aligned with American policy aims.

However, listed after the innocuous-enough “Fiji Council of Social Services” on the US government’s Tides outlays list is 7amleh, an anti-Israel activist organization claiming to fight “censorship,” by which it means social media companies’ guidelines against hate speech, terror glorification and incitement to violence. Especially since the brutal Hamas attack of October 7, 2023, 7amleh has primarily lobbied Meta to reframe pro-terror agitprop as neutral content. For example, it advocated on behalf of a news account described as “Hamas-affiliated” by the State Department, and pushed back on restrictions against the “Al-Aqsa Flood” keyword, Hamas’s name for the massacre.

Cases extend far beyond the US. Since October 7th, NGO Monitor has revealed UK government funding in the Palestinian territories to NGO partners with links to terror groups, to the tune of £100 million and counting. One project details a cash assistance program coordinated via UNICEF with MoSD, a Gaza ministry “affiliated with the de facto authorities” in the enclave. “Thus,” in the government’s own words, “UK Aid can be linked directly or indirectly with supporting the de factor [sic] authority in Gaza which is part of a proscribed group.” The UK has also been a primary backer of Norwegian Refugee Council operations in the territories, despite the NGO’s “strong partnerships with national and local authorities, particularly with the MoSD in Gaza and the West Bank” – again, Hamas.

Thankfully, NGO Monitor’s revelations come at a time of international introspection that presents an opportunity for change. In February, France launched a commission to review its development aid, following public outcry at “billions squandered on aid to foreign countries.” The US has also wound down USAID, its primary foreign aid vehicle, pending significant reform – realizing it had morphed into a black box which had drifted away from serving American interests.

The problem, said congressman and international development expert Michael Baumgartner, is that foreign aid bodies like USAID have “become trapped in what has been called the ‘iron triangle’ of government programs,” where “bureaucrats, private contractors, and lobbyists work together to block efforts of the executive to control or even understand the agency.” Essentially, development becomes so opaque that legislators and the electorates who elevate them to office lose track and control of their funds’ destinations.

Western governments have come to the conclusion that, while there is value to foreign development, significantly more accountability is needed to bring it in line with voter priorities and make sure it doesn’t fund explicitly hostile causes.

Eliminating the use of groups like Tides and World Vision as passthroughs and “fiscal sponsors” – often coming in with their own ideological agendas – would go a long way. More broadly, foreign development is indeed a valuable component of the West’s soft power toolbox. It is worth revitalizing, but only in a reformed capacity where sufficient oversight, transparency and accountability ensure projects legitimately advance worthwhile foreign policy goals.

____ 

Olga Deutsch is Vice President at NGO Monitor