How spending $153M to pay its bills put USAID in DOGE’s crosshairs

Pete Marocco was furious. It was Thursday, Jan. 23, and the Trump administration official had discovered that the U.S. Agency for International Development recently made $153 million in payments for a range of expenses. Marocco, who was effectively running the agency from the State Department, demanded to know why the money was sent, according to five people familiar with the incident. Just three days earlier, newly inaugurated President Donald Trump had issued an executive order halting new foreign aid spending, and Marocco was already drafting a diplomatic cable, due to go out the next day, that specified even current foreign aid funds had to be frozen for at least three months, pending a review. Was USAID trying to do an end-run? In meetings over the next 24 hours, USAID officials tried to explain the situation. The $153 million, they pointed out, covered numerous payments, including a key set of employee salaries and money owed to organizations for work already done. In the USAID officials’ view, the payments did not violate the Trump foreign aid freeze. Marocco, apparently, was not convinced. On Monday morning, Jan. 27, Marocco arrived at USAID headquarters with more than a dozen people, most, if not all, representatives of the Department of Government Efficiency, the Trump-blessed initiative run by tech mogul Elon Musk seeking to shrink the federal government, according to the five people. USAID had become the epicenter for Trump and Musk’s visions of a much smaller federal workforce. In the days since, Marocco and DOGE have effectively dismantled the decades-old aid agency, which has $40 billion in annual appropriations and has long been America’s primary vehicle for disbursing humanitarian aid abroad. All but roughly 600 members of its 10,000-plus staff around the world were placed on leave. Current and former officials say they expect the agency to be folded into the State Department, a belief reinforced by the fact that Secretary of State Marco Rubio has been named the acting USAID administrator. Marocco and DOGE, blessed by administration higher-ups, have made the moves against USAID despite protests from Democrats who say they need sign-offs from Congress. On Friday, a judge moved to temporarily halt some of the Trump team’s efforts to shrink USAID, including the administrative leaves forced on a few thousand employees. But the dismantling of USAID and the freeze on foreign aid spending may have already put lives in danger in places from Ukraine to the Thai-Myanmar border as the flow of everything from food to medical aid has slowed or stopped. “This debate in D.C. on bureaucratic shakeups is in reality defining who will live and who will die abroad,” said Scott Paul of Oxfam, an aid organization that does not receive U.S. government funding. PMG spoke to 20 current and former USAID staffers, lawmakers, humanitarian officials and other people familiar with the situation for this article. Most were granted anonymity because they were not authorized to speak publicly and in some cases feared retaliation from the Trump administration. They described two weeks of rapid-fire chaos and the first major display of what the Musk-Trump complex can do. Spokespersons for the White House, where DOGE is centered, the State Department and USAID did not respond to requests for comment. Musk and Marocco also did not respond to such requests. In Washington, many conservatives are cheering the Musk-led DOGE’s gutting of USAID as an example of how it is possible to use rough-and-tumble tactics to rapidly wind down an entire federal agency, even in the face of employee pushback and before inevitable drawn-out legal and bureaucratic battles. “They think they’re a charity, and they’re not,” Sen. John Kennedy said Monday of USAID. “They got a lot of tofu-eating woke-ristas over there — not all of them, but many.” For the left, USAID’s status offers a warning of how a small group of people, when empowered by the president, can quickly dismantle an entire multibillion dollar agency with thousands of staff — even in the face of mounting lawsuits — and if a GOP-controlled Congress lets them. “This is a constitutional crisis that we are in today. Let’s call it what it is,” Sen. Chris Murphy said Monday at a rally outside USAID’s headquarters. “The people get to decide how their taxpayer money is spent. Elon Musk does not get to decide.” A person familiar with the Trump administration’s plans for USAID said the agency’s staff members have seemed unable or unwilling to answer the DOGE team’s basic questions. Current and former USAID staff, however, say the agency’s work is being misrepresented by DOGE representatives and others who do not understand its systems, its protocols or some basic ways the government works. In many ways, USAID was especially vulnerable. Foreign aid is not an issue that tends to mobilize voters, and its humanitarian mission doesn’t directly affect Americans. Still, DOGE’s actions at USAID could provide Trump a blueprint for how to weaken other institutions it is targeting, including the Department of Education and Environmental Protection Agency. The Trump administration, led by Musk’s DOGE and Marocco, first accused the agency of going against a Trump order. It then questioned its startled leaders, pushed out many and took control of its digital and physical spaces as it ordered hundreds — later thousands — to take administrative leave. It’s an act-fast, act-big approach that has created confusion throughout the agency and those who work with it. On Friday, Trump was more explicit than ever about where he stood on USAID: “CLOSE IT DOWN” he wrote on social media. The multi-front attack has been cheered on by most Republicans, with pushback only from largely powerless Democrats. “We were the first victim,” a senior USAID official said. “We won’t be the last.” The purge beginsThe DOGE crew that showed up nearly two weeks ago with Marocco wasted no time making its presence felt. The group demanded and received access to USAID’s Phoenix financial system, which manages accounting transactions and funding disbursements for the agency. DOGE representatives also began asking questions, including about staffing, funding decisions and how the agency crafts contracts. While DOGE was a new entity, USAID officials were familiar with Marocco, and they were apprehensive about him because of his history with their agency. He served there in the first Trump administration but left after three months amid complaints by staff about his management style and demands he tried to impose on the Bureau for Conflict Prevention and Stabilization, according to reports at the time. The staff composed a 13-page dissent memo about Marocco that they sent to USAID’s inspector general and filed in the agency’s Dissent Channel. Marocco also was reportedly caught on camera at the U.S. Capitol on Jan. 6, 2021, during the insurrection, but has called allegations of his role in the insurrection “petty smear tactics and desperate personal attacks” without addressing whether he had been at the Capitol. While it largely operates as an independent agency, USAID has long fallen under the policy purview of the secretary of State, and the State Department signs off on its spending. As Marocco and his DOGE entourage dug through USAID’s books, the foreign aid freeze’s effect was reverberating across the planet. Aid groups of all sizes were reaching out to USAID staffers, asking if their organization could qualify for a waiver. But USAID employees couldn’t answer. Not only were they still trying to understand the orders, Trump administration officials had told them over the weekend that they couldn’t talk to anyone outside the agency — not even people in the State Department — without approval from top Trump-designated USAID leaders. Still, some USAID officials tried to request waivers for certain groups, a move that many now worry upset the Musk and Trump teams. As that Monday drew to a close, DOGE representatives approached the agency’s acting leadership and handed them a list of 58 people, almost all senior career officials, to put on administrative leave. They said these people were suspected of interfering with the implementation of the funding freeze. The acting leaders — Trump appointees Matt Hopson and Ken Jackson, as well as career employee Jason Gray — were skeptical, according to a current USAID official familiar with the situation and the person familiar with the Trump team’s plans for the agency. DOGE representatives countered by saying it wasn’t that serious to put people on administrative leave — it would be temporary, they would be paid, and many would likely be cleared after an investigation into whether they’d violated the freeze orders. The acting leaders agreed to the decision. Hopson, Gray and Jackson did not respond to requests for comment. The initial purge, however, put everyone else at the agency on notice. In the days that followed, DOGE representatives interviewed several of the remaining top USAID staffers. The agency’s staffers seemed unable or unwilling to answer basic questions, such as how they ensure the payments they make go to the right people or what groups deserve a waiver to a freeze on foreign aid, the person familiar with the Trump administration’s plans for USAID said. “You’d think that an agency with a $40 billion budget has some sort of a payment control system,” the person said, adding that the Trump and DOGE teams want to stop potentially “illegal payments.” But current and former USAID officials said the DOGE representatives, many of them young and with no government experience, didn’t seem to understand how federal funding works or the vast array of mechanisms that track payments. For example, grants often last many years, and explaining why a group is getting funding now from money allocated a decade ago isn’t simple. “This is a $40 billion a year agency, and they want to understand it in a 30-minute meeting,” said one former USAID official in touch with current officials who have been interviewed. “We tried explaining, maybe not well, but we were ambushed,” said a USAID contractor familiar with the internal deliberations. “Some were confused. Well, guess what, it’s government. It can be convoluted and confusing.” Some of the questions seemed designed to nail down who could have been behind the decision to spend the $153 million that irked Marocco, the current USAID official familiar with the situation said. Allegations about USAID officials’ incompetence and motives have even come — repeatedly — from Secretary of State Marco Rubio, who, although the agency’s acting administrator, has delegated much of the work to Marocco and DOGE. “I’d have preferred not to do it this way,” he recently told reporters about USAID’s treatment. “When we tried to do it 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.” ‘It’s like we’re in the Soviet Union’There’s long been bipartisan frustration with the complexity of the U.S. foreign aid apparatus. Calls for restructuring it are not unusual. Republican lawmakers have also in the past accused the agency of stonewalling their investigations into potential misuse of U.S. foreign aid funds. By Tuesday, Jan. 28, Democrats were increasingly worried that the upper echelons of the Trump administration didn’t understand what they’d unleashed. Democratic senators reached out to Rubio, warning him that the cable Marocco had drafted — and Rubio had sent out under his own name — was putting lives at risk by halting deliveries of medicine, food and other critical aid to vulnerable populations. By that Tuesday night, Rubio issued a waiver that would let USAID keep 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.” To some Democrats, it was a sign that Rubio was not entirely comprehending the extent of USAID’s work, nor how much damage Marocco and DOGE were causing at the agency. “I don’t think he’s fully aware of how fast this is moving and what’s happening,” said a Democratic lawmaker familiar with the situation. Aid organizations were relieved but also confused by the waiver. What counted as subsistence? Who exactly would they turn to for requesting a waiver? From what they could gather, Marocco was in charge of signing off on each waiver request. But the process felt painfully slow to those who managed to figure it out. For many aid groups that contract with USAID, the three-month pause in U.S. funding, with no guarantee they’d get their money restored, was effectively a death knell. Some immediately began laying off staff. At the same time, Marocco and DOGE were slashing USAID’s own workforce further. Hundreds of contractors, many of whom perform critical functions directly for the agency, were furloughed. The cuts in staff made it harder for aid groups to coordinate with USAID on getting waivers or arranging deliveries of goods if they could get a waiver. Throughout that week, USAID employees began noticing something else. Their computer settings appeared to have been altered. Some noticed that their online sessions on Google Meets were being automatically transcribed, and that they couldn’t turn the function off, one USAID staffer said. The feeling was “they’re just spying on us,” the staffer said. “It’s like we’re in the Soviet Union.” The physical environment in USAID’s Washington facilities began to change, too. Photos of USAID staffers’ humanitarian work in the field were taken down from the walls, with empty frames left behind. A flashpoint came Thursday, Jan. 30. That day, Nicholas Gottlieb, USAID’s director of employee and labor relations, wrote to the dozens of senior staff put on administrative leave to say he’d found no evidence they’d done anything wrong. Gottlieb sent the note after DOGE representatives briefed him on what they’d found in their probes of the 58 senior staff, five of whom DOGE wanted fired and the rest of whom they wanted to stay on leave, according to the current U.S. aid official familiar with the situation. Gottlieb, unimpressed by DOGE representatives’ findings, told the 58 people that they could come back to work. But he warned that his decision might soon be reversed. It was overturned within hours. Then Gottlieb was put on leave, according to two USAID officials familiar with the matter. It wasn’t entirely clear who overruled and put Gottlieb on leave. The person familiar with the Trump administration’s plans for USAID said Gottlieb lacked the authority to rescind the leaves. Gottlieb declined to comment. The moves from the mass furloughs to funding pauses appeared to be about something bigger. As PMG first reported on Friday, Jan. 31, Trump administration officials were talking about either closing USAID altogether or folding it into the State Department. At the time, a USAID spokesperson for the administration denied the plans, calling the reporting “patently false.” After the article published, Democratic lawmakers issued statements warning Trump he could not restructure a government agency this way without congressional approval. The administration’s moves against the agency “have created a maelstrom of problems that have put our nation at risk and undermined American credibility around the globe,” several leading Democratic lawmakers wrote in a letter that Friday to Gray, who was then listed as USAID’s acting administrator. DOGE representatives were already frustrated by Gottlieb’s actions and what they saw as insubordination from USAID officials. They also were annoyed by what they felt were inappropriate limits on their physical access to USAID facilities. DOGE staffers believed they had the authority — including from the White House — to access more space, the person familiar with the Trump administration’s plans for USAID said. But USAID facilities are set up in a manner that means people need certain security clearances to access certain areas, even if no classified information is necessarily present in those spaces. That makes the issue of physical access more complicated. And some rooms — ones often referred to as SCIFs — have more security constraints and require significantly higher levels of clearance than others. Further alarming USAID staff was the fact that some sensitive but unclassified information outside of SCIFs — such as data on pro-democracy organizations in autocratic countries that quietly receive USAID support — could inadvertently get out and endanger lives if DOGE representatives ever mishandled the information. Amid the turmoil, Matt Hopson, the Trump-appointed USAID chief of staff who had taken his position just days earlier, left his position on Friday, Jan. 31. Standoff over spaceThe tensions over physical access hit a high the next day. That Saturday, Feb. 1, around half a dozen DOGE representatives showed up to the headquarters building bent on getting access to areas previously off-limits. Top USAID security officials denied them entry. The DOGE representatives threatened to call the U.S. Marshals Service, the person familiar with the Trump team’s plans for USAID said. The standoff was ultimately defused, and the DOGE staff, some of whom did have security clearances, were granted the expanded access they wanted — essentially paving the way for them to take control of the building. Two senior USAID security officials were placed on administrative leave, along with dozens of other USAID officials, including many in the legislative and public affairs office. The person familiar with the Trump team’s USAID effort downplayed claims that the DOGE representatives had nefarious motives. “No one asked for or accessed classified information,” the person insisted, adding that the group also did not enter or even try to enter the SCIFs. The person stressed the young people assigned to DOGE, many of them engineers, are not responsible for the new administration’s policies toward USAID. They’re implementing decisions made by senior officials, the person said, adding that because they’ve been named by some media outlets: “They are getting harassment and death threats.” USAID’s website was taken down and its X account went dark on Feb. 1 as well. The growing public outcry over USAID’s fate drew comments from Musk and Trump, both of whom made it clear they had little sympathy for the agency. Notably, Musk spoke first. On Feb. 2, he called USAID a “criminal organization” that should “die.” Hours later, Trump said USAID was run by “radical lunatics.” But it wasn’t until later in the week that he more clearly said he wanted to shut down the agency. A mass recallBy Monday morning, USAID staffers in Washington were told to work from home and not go to the main headquarters building. Also Monday, the Trump administration reached out to Congress to officially tell lawmakers that it had plans for USAID. “They were scrambling around when it came to a notification to Congress,” said Sen. Andy Kim , who previously worked for the agency. “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 some Republicans became alarmed behind the scenes, particularly after it became clear that Rubio’s waiver wasn’t working well in practice — and that it might affect their constituencies. The funding freeze, for instance, put a hold on some of the $2 billion in U.S. farm commodities that USAID purchases for humanitarian aid each year. “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,” Sen. Jerry Moran posted on X on Monday. With each passing day, actions increasingly looked aimed at obliterating USAID. By Tuesday night, all USAID direct hires around the world were told they’d be placed on paid administrative leave by Saturday morning. With few exceptions, those based overseas were told to return to the U.S. within weeks. As of Friday afternoon, only around 600 USAID direct hires globally have been deemed essential enough to stay on the job. While DOGE representatives have been key players in the changes, some current and former USAID officials view Marocco as a major force — one who is influencing Rubio’s reaction. Marocco was the author of notices sent out to many individual USAID staff members placed on leave this week. Marocco’s memo detailed the terms of the leave, including telling recipients they could not enter USAID premises without his permission. It also included the phone number of USAID’s Staff Care Program for employees needing mental health counseling. Daniel Lippman and Carmen Paun contributed to this report.

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