Devex Newswire: Legal pressure on Trump’s foreign aid freeze ramps up

As widely expected, lawsuits against U.S. President Donald Trump’s foreign aid freeze are beginning to trickle in. We have details on the latest one.

Also in today’s edition: We put numbers on that foreign aid freeze, and food assistance catches a big break — on paper at least.

+ Join us tomorrow, Feb. 12, for the Devex Career event: Circles of career evolution — unlocking fearless impact. Save your spot now.

Seeking relief

Last week, a federal district court ruling granted temporary relief to some USAID employees who were about to find themselves on administrative leave or forced out of their postings abroad. Yesterday, another lawsuit — brought by the AIDS Vaccine Advocacy Coalition, or AVAC, and the Journalism Development Network — argued the Trump administration “illegally and unconscionably” froze foreign assistance funding.

For AVAC, “the abrupt cessation of funding and the stop-work order has been disastrous,” the complaint says. About 40% of the organization’s budget came from USAID, and its work, including ongoing research conducted by African civil society organizations, has been halted, leaving participants in medical research trials in the lurch.

The complaint also said: “The public interest favors entry of a declaration that the Executive Order is unconstitutional, in violation of the separation of powers, because implementation of the Executive Order has caused and will continue to cause needless death, destruction, and immiseration; will continue to threaten U.S. global security; and will directly result in thousands of Americans losing jobs and income.”

Read: New lawsuit challenges US foreign aid funding freeze

Go figure

The Devex data team has been working furiously these last few weeks to contextualize the sweeping impacts of Trump’s aid freeze.

One question we sought to answer is how many organizations will be affected. In short, a lot. USAID works with over 1,600 prime awardees and almost 2,500 prime contractors, many of whom derived most of their income from the agency.

On top of that, thousands more organizations partner with those primes. USAID lists roughly another 9,500 subcontractors and subawardees. However, the actual consequences may be much wider because many of those organizations partnered with local NGOs or have other organizations in their supply chain.

On the question of money, my colleagues Miguel Antonio Tamonan and Alecsondra Kieren Si have been trying to understand the ramifications — and it’s not been easy. They identified that around $56 billion had been obligated to USAID partners but not yet paid — with the likelihood that there’s more money not recorded — on top of another estimated $4 billion that would likely have been obligated this quarter.

Some of that money will be spent, but the majority of it now seems unlikely to be delivered.

Among the largest implementers, the blow has been severe. A study by Devex found that USAID’s largest partners had lost around a fifth of their income; the worst affected organizations lost more than 80% of their revenue overnight.

It’s hard to track the total number of jobs that will be lost worldwide, but what we do know is staggering. Just at USAID alone, more than 10,000 jobs are at risk or have been lost. Furthermore, the largest USAID implementers have announced furloughs, with thousands of cuts across just four organizations: the two largest contractors, Chemonics International and DAI Global, and the two largest INGO grantees, Catholic Relief Services and FHI 360.

Read: The US aid freeze in data — mapping an unfolding catastrophe

Plus: How the aid freeze affects nearly $60B in USAID spending (Pro)

+ To keep up to date with global development's latest funding opportunities, in-depth news, and analysis, sign up to Devex Money Matters.

Counter (terrorism) productive

Trump, Elon Musk, and aid-skeptic Republicans have all variously portrayed USAID as a criminal, corrupt organization that’s unaccountable to taxpayers and has aided organizations with terrorist links.

Evidence of those claims is mixed, but Trump’s foreign aid freeze has actually made it harder for USAID to vet humanitarian awards for terrorist links and hampered its capacity to monitor aid distributions in high-risk areas, according to an advisory notice published by USAID’s Office of Inspector General.

Today, USAID is required to vet organizations in Afghanistan, Iraq, Lebanon, Pakistan, Syria, the West Bank and Gaza, and Yemen, given known terrorist activity across those countries, my colleague Elissa Miolene reports. However, with wave after wave of layoffs, suspensions, and lockouts, USAID’s counter-terrorism vetting unit hasn’t been able to report to work, the OIG found.

“This gap leaves USAID susceptible to inadvertently funding entities or salaries of individuals associated with U.S.-designated terrorist organizations,” the advisory notice stated.

Read: Chaos, staff cuts have 'degraded' USAID's ability to vet terrorist ties

Back to what office?

Adding insult to injury, while Trump has ordered federal employees who work remotely to return to the office, USAID staffers don’t have an office to return to.

After a federal judge blocked the agency from placing thousands of staff on administrative leave last Friday, USAID employees slowly began to regain access to their accounts — and many had planned to return to the office yesterday.

However, USAID’s staff in Washington, D.C., have been told the agency’s “former” headquarters building will remain closed until further notice, according to an internal email obtained by Elissa. The continued closure affects other USAID buildings in Virginia and in Washington, D.C.

Scoop: 'Former' USAID headquarters closed until further notice

From farm to fork

The U.S. government is the world’s largest donor of food assistance. It also spends at least $2.1 billion on U.S.-grown commodities sent abroad annually, meaning American farmers — and the lawmakers who represent them — also have a lot riding on Trump’s foreign aid freeze.

That’s, of course, in addition to the tens of millions abroad who rely on that food aid to survive. Now, there may be some good news for both recipients and providers.

The World Food Programme announced it will be able to resume in-kind food aid purchases and deliveries that it carries out with USAID funding following a rescission of its stop-work order.

“This allows for the resumption of food purchases and deliveries under existing USAID agreements,” the agency wrote on the social media platform X Sunday. “It also enables WFP to continue working with our NGO partners, who play a vital role in distributing emergency food assistance to people affected by war, floods, droughts and other disasters around the world.”

Though the rescission of WFP’s stop-work order applies only to that agency, other implementers of emergency Food for Peace programs have also been granted permission to restart their programs, a humanitarian aid worker tells Devex Senior Editor Tania Karas.

“But as long as the U.S. government’s payment system isn't working for them, any waiver to a stop-work order won't mean much as implementing partners are increasingly cash-strapped,” the aid worker said.

Read: WFP to resume food aid delivery after halt due to US stop-work order 

Taking ownership

Most people in our community agree that some type of reforms to the aid industrial complex were overdue, but at the moment, they’re more focused on sheer survival than on reform.

But Mark Dybul — a renowned global health expert who helped usher in PEPFAR, the landmark U.S. HIV/AIDS initiative  — presented a more self-critical perspective for the aid community in a recent Devex Pro event — reflecting alarm bells he’s been sounding long before Trump took a wrecking ball to USAID.

His wish? A less fragmented sector that collaborates with the private sector and governments not just to dole out money, but to create a self-sustaining development plan that drives economic growth, ensuring mutually beneficial success for donor and recipient.

“And you can’t do that with 1,000 organizations all siloed within individual activities that aren’t connected, that burden the countries with an enormous weight of bureaucratic responsibility, where they’re called out of the country or to a meeting every third day from a different organization,” he said.

Dybul said the aid community needs to support a restructuring “that focuses on development — not individual projects, not individual organizations, not individual diseases, not individual anything.”

“And if we can do that together, I think the administration and certainly Congress will respond. But if we don’t, and if the arguments are we need things to be the way they were … you won’t just be furloughing. You’ll be closing the doors.”

Watch the event recording: Mark Dybul warns aid sector it must fundamentally change its ways (Pro)

+ Not yet a Devex Pro member? Start your 15-day free trial today to access all our expert analyses, insider insights, funding data, exclusive events, and more. Check out all the exclusive content available to you.

In other news

The Trump administration’s overhaul of USAID may signal a broader plan to channel foreign aid into fossil fuel support. [Politico]

The European Union will review its multibillion euro aid to better align funding with foreign policy amid global challenges. [Bloomberg]

The United Nations has temporarily halted operations in Yemen’s Saada region after Houthi authorities detained eight more of its staff. [Al Jazeera]

Belgium plans to cut its foreign aid budget by 25% over the next five years. [Devex Pro]

Sign up to Newswire for an inside look at the biggest stories in global development.