Devex Pro Insider: The messy final days of USAID

Hello, and welcome to a special edition of Devex Pro Insider. I’m Michael Igoe, and this is where we tackle big questions about how power, money, and influence are reshaping U.S. foreign aid. We’ve been writing a lot about the future of U.S. foreign aid and what American soft power looks like in a post-USAID world. There’s one hiccup in that narrative, though: USAID technically still exists, and closing up shop has proven easier said than done. For the last couple of weeks, I’ve been digging into that closeout process. While the political appointees at the White House Office of Management and Budget who are in charge have been tight-lipped about how they are going about it, some former USAID officials who were recently involved in the effort have been willing to talk. What they’ve told me is that when it comes to paying USAID’s former partners the very large amounts of money they are owed for projects that were abruptly canceled, things are not going well. Under the best circumstances, shutting down the world’s largest bilateral aid agency, removing the vast majority of its 10,000-person workforce, and terminating over 5,000 awards would be a gargantuan task. These, I’m told, are not the best circumstances. The political leadership at OMB harbors a deep mistrust of the career USAID officials they are also relying on to complete the termination settlement process. For their part, the career officials who left USAID’s “legacy unit” told me they did so after concluding the folks in charge do not plan to pay the agency’s partners what they are owed. “Their intention is not to pay,” said a former USAID official who was involved in the closeout process. “They’re pushing back against everything, giving zero permission to anyone to do anything, and taking it all collectively, you just realize that it’s ill-intentioned.” According to OMB leadership, this was all supposed to be done by March 7, at which point the remaining USAID career staff would see their employment end. Now the timelines are slipping. The remaining staff have had their contracts extended to Sept. 30, and USAID, even as it labors to shut itself down, is hiring a new batch of institutional contractors to assist with that work. As I previously reported, in order to appease those at OMB “who are most sceptical of USAID staff,” none of the people hired through that contract is permitted to have former USAID experience. “The investment in training new contract staff ensures that the final closeout of taxpayer-funded obligations is handled by a team with no prior experience in the matters being settled,” reads an internal memo that I obtained. The “matters being settled” amount to hundreds of millions of dollars for a handful of U.S-based implementing partners, and what I’m told is a much, much larger amount still owed to the hundreds of other former USAID partners around the world, including a large number of local organizations. Making good on those commitments was one of the main reasons some USAID staff agreed to stay on and assist with the closeout. “I sincerely wanted to get the partners paid, particularly local partners,” said the same former official. But, they said, after the State Department handed over responsibility of the closeout process to OMB back in August, the atmosphere of distrust and dysfunction worsened. “It was like reliving February 2025 all over again,” they said. From what my sources told me, shutting down USAID is far from a mission accomplished. Actually, it’s a mess. Read the full article: Inside the USAID closeout mess (Pro) ICYMI: USAID bars its own experts from agency closeout jobs Check’s (not) in the mail It’s not just USAID’s former implementing partners who aren’t getting paid. The agency’s retirement-eligible former staff are also still looking for their paychecks. I talked with Blake Chrystal, a former USAID deputy mission director in Afghanistan who was pushed out by DOGE after nearly 20 years at the agency. Chrystal was one of the lucky ones who was eligible for a retirement pension at the time he was caught up in the mass reduction in force last July. Now he’s gone eight months without any income. “After the career that I’ve had, how hard I’ve worked and the sacrifices I’ve made, to find myself without any income, without being able to pay for the upfront medical costs for my kids, and not knowing if I’m going to be able to pay my rent next month — I just never thought I’d be in this situation,” Chrystal told me. Maybe it shouldn’t come as a surprise that it is taking a long time for the government to process pension payments. The agency office in charge of processing retirement benefits went from handling roughly 15 to 30 retirements a year to a sudden influx of over 700 in 2025. For critics, it’s another sign that the people who rushed to dismantle USAID did so with no plan for dealing with the bureaucratic fallout. “They just had no clue as to what they were doing other than living up to their dream of causing and inflicting pain to everyone they could, and that's what they were successful at, but nothing else,” said Randy Chester, the USAID vice president at the American Foreign Service Association. Read: Forced into retirement, ex-USAID staffers face long pension delays + The Trump effect: Explore our dedicated page to catch up on all the latest news, in-depth analysis, and exclusive insights on how the Trump administration’s policies are reshaping U.S. aid and global development.