How a $153M Expense to Settle Accounts Placed USAID Under Scrutiny by DOGE

Assistants to the president and Elon Musk believed that USAID officials were attempting to bypass a funding freeze.

How a $153M Expense to Settle Accounts Placed USAID Under Scrutiny by DOGE
Pete Marocco was furious.

On January 23, he learned that the U.S. Agency for International Development (USAID) had recently disbursed $153 million for various expenses. Marocco, who was effectively managing the agency from the State Department, demanded clarification on why the funds had been sent, as reported by five sources familiar with the situation.

Just three days prior, newly inaugurated President Donald Trump had issued an executive order to halt new foreign aid spending, and Marocco was in the process of drafting a diplomatic cable to be sent the next day specifying that even existing foreign aid funds should be frozen for at least three months, pending review. Was USAID attempting to circumvent this directive?

Over the following 24 hours, USAID officials attempted to clarify the matter, asserting that the $153 million involved crucial payments, including staff salaries and debts to organizations for completed work. From their perspective, these payments did not breach the Trump administration’s foreign aid freeze.

But Marocco was not convinced.

On Monday morning, January 27, he arrived at USAID headquarters accompanied by over a dozen representatives from the Department of Government Efficiency (DOGE), the initiative endorsed by tech mogul Elon Musk aimed at reducing the federal workforce, as noted by five insiders.

USAID had emerged as the center for Trump and Musk's vision of a significantly smaller federal workforce.

In the ensuing days, Marocco and DOGE effectively began dismantling the longstanding aid agency, traditionally responsible for distributing approximately $40 billion in annual humanitarian assistance. Most of USAID's staff—over 9,000 out of 10,000 employees worldwide—were placed on leave. Current and former officials believe the agency will eventually be folded into the State Department, a concern heightened by Secretary of State Marco Rubio being appointed as acting USAID administrator. Under the auspices of the administration, Marocco and DOGE acted against USAID despite Democratic opposition claiming any such moves required congressional approval.

A judge stepped in on Friday, temporarily stopping some of the Trump administration's actions to reduce USAID, including the forced administrative leaves impacting thousands of employees.

However, the disassembly of USAID and the freeze on foreign aid have already jeopardized lives in various regions, from Ukraine to the Thai-Myanmar border, as critical deliveries of food and medical support have stalled or ceased altogether.

“This debate in D.C. on bureaucratic shakeups is in reality defining who will live and who will die abroad,” articulated Scott Paul of Oxfam, an aid organization that does not receive U.S. government funding.

PMG spoke with 20 current and former USAID personnel, lawmakers, humanitarian officials, and other sources for this article. Most requested anonymity due to constraints on public commentary and fear of retaliation from the Trump administration. They characterized a rapid, chaotic two weeks showcasing how the Musk-Trump alliance could impact USAID.

Spokespersons for the White House, State Department, and USAID did not respond to requests for comments. Neither Musk nor Marocco provided comments when approached.

In Washington, conservatives have applauded the Musk-led DOGE for its aggressive approach to dismantling USAID, viewing it as a demonstration of how streamlined tactics can facilitate the rapid reduction of a federal agency despite employee resistance and forthcoming legal and bureaucratic challenges.

“They think they’re a charity, and they’re not,” Senator John Kennedy remarked on Monday regarding USAID. “They got a lot of tofu-eating woke-ristas over there—not all of them, but many.”

For progressives, the turmoil surrounding USAID serves as a stark reminder of how a small cadre of individuals, empowered by the president, can swiftly dismantle a multibillion-dollar agency with thousands of employees—even amid escalating lawsuits—if a GOP-controlled Congress fails to intervene.

“This is a constitutional crisis that we are in today. Let’s call it what it is,” Senator Chris Murphy stated on Monday at a rally near USAID’s headquarters. “The people get to decide how their taxpayer money is spent. Elon Musk does not get to decide.”

An individual familiar with the Trump administration's intentions for USAID noted that the agency's staff seemed either unable or unwilling to respond to DOGE’s basic inquiries. However, USAID personnel contend that DOGE representatives and others unfamiliar with the agency are misinterpreting its work and intricate operational protocols.

In many respects, USAID was particularly susceptible to these changes. Foreign aid is not an issue that typically galvanizes voter engagement, and its humanitarian mission does not directly affect Americans. Nonetheless, DOGE's tactics regarding USAID could provide a template for Trump to pursue weakening other targeted institutions, including the Department of Education and the Environmental Protection Agency.

The Trump administration, led by Musk’s DOGE and Marocco, initially accused USAID of flouting a Trump order. They then interrogated its startled leaders, displaced many, and seized control of both digital and physical assets, ordering hundreds—later thousands—to take administrative leave. This rapid action has generated confusion throughout the agency and among its stakeholders.

On Friday, Trump made his stance on USAID clearer than ever: “CLOSE IT DOWN,” he wrote on social media.

This multi-pronged assault has been applauded by most Republicans, with only limited pushback from largely powerless Democrats.

“We were the first victim,” a senior USAID official noted.

The purge begins. The DOGE team that joined Marocco nearly two weeks ago wasted no time asserting its authority.

The group demanded and obtained access to USAID’s Phoenix financial system, overseeing accounting and funding disbursements. DOGE representatives queried various aspects of the agency, including staffing, funding decisions, and the contracting process.

Although DOGE is a new entity, USAID officials were wary of Marocco due to his past with the agency. He had served during the first Trump administration but departed after three months amid staff complaints about his management style. Reports indicated that employees crafted a dissent memo addressing their grievances about Marocco's management, which they submitted to the agency’s inspector general and filed in USAID's Dissent Channel.

While USAID operates independently, it has always been under the policy direction of the Secretary of State, who must approve its expenditures.

As Marocco and DOGE examined USAID's operations, the repercussions of the foreign aid freeze reverberated worldwide. Aid organizations of various sizes reached out to USAID staff, inquiring about possible waivers for their operations.

However, USAID employees struggled to respond. They were still deciphering the directives, and Trump administration officials had instructed them not to communicate with anyone outside the agency— not even State Department colleagues—without authorization from senior Trump-appointed USAID officials.

Nonetheless, some USAID employees sought to obtain waivers for specific groups, a move that may have angered the Trump and Musk teams.

By the end of that Monday, DOGE representatives approached the acting leadership of USAID and presented a list of 58 individuals, almost all senior career officials, to put on administrative leave due to their presumed interference with the funding freeze.

The acting leaders—Trump appointees Matt Hopson and Ken Jackson, along with career employee Jason Gray—expressed skepticism about the request, according to an official familiar with the situation and someone acquainted with the Trump administration's plans for the agency.

DOGE representatives assured them that placing these individuals on leave was a temporary measure; they would remain paid, and many would likely be reinstated following an investigation regarding potential violations of the freeze orders. The acting leaders ultimately consented to this request.

The initial purge sent a powerful message to the rest of the agency.

In subsequent days, DOGE representatives interviewed several remaining high-level USAID staff. However, many agency representatives appeared unable or unwilling to answer basic questions about payment protocols or waiver qualifications, as noted by an individual familiar with the Trump administration’s plans for USAID.

“You’d think that an agency with a $40 billion budget has some sort of a payment control system,” the person observed, underscoring concerns that potentially “illegal payments” might be occurring.

Yet current and former USAID officials contend that many DOGE representatives, often inexperienced and young, lack a comprehensive understanding of how federal funding operates and the myriad mechanisms tracking payments. For instance, grants may span multiple years, making it complicated to explain why a group is receiving funding from allocations made years earlier.

“This is a $40 billion-a-year agency, and they want to understand it in a 30-minute meeting,” stated one former USAID official who remains in contact with current staff.

“We tried explaining, maybe not well, but we were ambushed,” a USAID contractor familiar with internal discussions reflected. “Some were confused. Well, guess what, it’s government. It can be convoluted and confusing.”

Some of the inquiries seemed aimed at pinpointing who might have authorized the $153 million expenditure that displeased Marocco, according to the current USAID official familiar with the situation.

Allegations questioning USAID officials' competence and motives frequently emerged from Secretary of State Marco Rubio, who—despite being the acting administrator—has delegated much of the agency's oversight to Marocco and DOGE.

“I’d have preferred not to do it this way,” he remarked about USAID's treatment. “When we tried to coordinate from the top down by getting cooperation from the central office and USAID, what we found instead are people trying to use the system to sneak through payments and push through payments despite the stop order.”

“There’s long been bipartisan frustration with the complexity of the U.S. foreign aid apparatus. Calls for restructuring it are not unusual.”

By January 28, the urgency among Democrats grew as they worried that the upper echelons of the Trump administration did not grasp what they had unleashed. Democratic senators reached out to Rubio, warning him that Marocco's drafted cable—sent out under Rubio's name—was endangering lives by halting essential deliveries of food, medicine, and other critical aid to vulnerable populations.

That Tuesday night, Rubio issued a waiver allowing USAID to continue funding “core life-saving medicine, medical services, food, shelter, and subsistence assistance, as well as supplies and reasonable administrative costs as necessary to deliver such assistance.”

Yet for some Democrats, this waiver was indicative of Rubio's incomplete understanding of the scope of USAID's work and the damage being inflicted on the agency by Marocco and DOGE.

“I don’t think he’s fully aware of how fast this is moving and what’s happening,” observed a Democrat familiar with the situation.

Aid organizations were left relieved yet puzzled by the waiver. Questions arose regarding what defined subsistence, and who they should turn to for waiver requests. From available information, it seemed Marocco was responsible for approving each waiver, but the process appeared painfully slow.

For many aid groups contracted with USAID, the three-month funding pause—with no assurance their resources would be restored—was effectively a death knell, as many began laying off staff.

Simultaneously, Marocco and DOGE pushed further cuts to USAID's workforce. Hundreds of contractors who perform critical functions were furloughed. Staffing reductions hindered aid organizations' ability to collaborate with USAID on waivers or coordinate deliveries.

Throughout that week, USAID employees noticed unsettling changes. Many reported that their computer settings were altered; some found that their sessions on Google Meets were automatically transcribed, with no option to disable the feature. One staffer articulated a pervasive sense of surveillance, exclaiming, “It’s like we’re in the Soviet Union.”

The physical atmosphere in USAID's Washington offices shifted as well, with photographs of staff humanitarian efforts removed from the walls, leaving empty frames.

A significant moment occurred on January 30, when Nicholas Gottlieb, USAID’s director of employee and labor relations, wrote to the senior staff placed on administrative leave, stating he found no evidence of wrongdoing.

This message followed a briefing from DOGE representatives, who delivered their findings regarding the 58 senior officials. While five were slated for termination, the majority were recommended for continued leave, according to a current USAID official acquainted with the developments.

Unimpressed with DOGE's findings, Gottlieb informed the affected employees that they could return to work, but advised that his decision might soon be revoked—a prediction that came true within hours. Gottlieb himself was then placed on leave, according to two USAID officials familiar with the episodes.

It remains unclear who authorized Gottlieb's leave. According to the person familiar with the Trump administration’s plans for USAID, Gottlieb did not possess the authority to rescind the administrative leaves. He has opted not to comment.

The sequence of mass furloughs and funding freezes seemed indicative of a larger agenda.

On January 31, officials reported that discussions within the Trump administration were shifting toward either completely dissolving USAID or merging it with the State Department. A USAID spokesperson at that time denied these claims, labeling them “patently false.”

Following the publication of this report, Democratic lawmakers expressed concern, warning Trump that he could not restructure a government agency without congressional oversight.

The administration's measures against USAID “have created a maelstrom of problems that have put our nation at risk and undermined American credibility around the globe,” several prominent Democratic lawmakers articulated in a letter to Gray, who was then identified as USAID’s acting administrator.

Frustrations have risen within DOGE regarding what they viewed as insubordination from USAID officials. They also expressed dissatisfaction over perceived restrictions on their access to agency facilities.

DOGE representatives claimed they held authority—from the White House and beyond—to access broader areas, as reported by the person familiar with the plans for USAID.

However, USAID’s facility design requires certain security clearances for access to specific zones, complicating matters further. Access to certain spaces, known as SCIFs, necessitates even stricter security protocols.

Moreover, concerning agency staff was the risk that sensitive but unclassified information—such as data on pro-democracy organizations in authoritarian regimes receiving USAID support—could inadvertently become public if DOGE personnel mishandled the information.

Amidst this turmoil, Matt Hopson, the Trump-appointed chief of staff at USAID, who had just assumed the role days earlier, relinquished his position on January 31.

Tensions surrounding physical access intensified the next day.

On February 1, several DOGE representatives arrived at the headquarters, determined to gain entry to previously restricted areas. Top USAID security officials denied them entry, leading DOGE representatives to threaten contacting the U.S. Marshals Service, as revealed by the individual acquainted with the Trump administration’s strategy for USAID.

The standoff ultimately resolved, granting DOGE staff—some of whom had security clearances—the expanded access they sought, essentially allowing them control over the building. Consequently, two senior USAID security officials were placed on administrative leave, alongside many others from the legislative and public affairs office.

Despite claims by the person familiar with the Trump team’s intentions regarding USAID, he downplayed allegations of improper motives within DOGE.

“No one asked for or accessed classified information,” he asserted, emphasizing that the team did not attempt to enter SCIFs.

The individual stated that the young engineers assigned to DOGE were not the architects of the new administration’s USAID policies; instead, they implement directives from senior officials, further noting that they have faced harassment and threats, as some media outlets have named them.

On February 1, USAID’s website and X account were both taken offline.

The mounting public outcry regarding USAID’s fate prompted remarks from Musk and Trump, who appeared unsympathetic toward the agency. Musk labeled USAID a “criminal organization” that should “die” on February 2. Hours later, Trump described the agency as being run by “radical lunatics.” However, it wasn't until later in that week that he more distinctly advocated for shutting down the agency.

A mass recall ensued. By the following Monday morning, USAID personnel in Washington were instructed to work from home and avoid the main headquarters. That same day, the Trump administration formally notified Congress of its plans for USAID.

“They were scrambling around when it came to a notification to Congress,” articulated Senator Andy Kim, who had previously worked for USAID. “And they said, ‘We’re going to study USAID and make some possible reforms.’ That was obviously just, you know, a total lie. They know what they were trying to do. They weren’t just studying it.”

Even behind the scenes, some Republicans began to express alarm, particularly as Rubio's waiver struggled with real-world application—potentially affecting their own constituents. The funding freeze notably halted some of the $2 billion in U.S. farm commodities that USAID purchases annually for humanitarian purposes.

“I urge @SecRubio to distribute the $340 million in American-grown food currently stalled in U.S. ports to reach those in need. Time is running out before this life-saving aid perishes,” tweeted Senator Jerry Moran on Monday.

With each passing day, the administration's undertakings increasingly appeared directed at essentially obliterating USAID.

By Tuesday night, all USAID direct hires globally were informed that they would be placed on paid administrative leave by Saturday morning. Excluding a handful of exceptions, those stationed abroad were instructed to return to the U.S. within weeks. By Friday afternoon, only around 600 USAID direct hires worldwide had been deemed critical enough to remain in their positions.

While DOGE representatives have played significant roles in these changes, many current and former USAID officials regard Marocco as a compelling force influencing Rubio’s actions.

Marocco authored the notices sent to individual USAID staff members placed on leave that week, detailing the terms of their leaves—including restricting their access to USAID premises without his consent.

He also provided the contact information for USAID’s Staff Care Program for those in need of mental health support.

Daniel Lippman and Carmen Paun contributed to this report.

Debra A Smith contributed to this report for TROIB News