Exclusive: Justice Department investigating USAID contractor

The U.S. Department of Justice is investigating the financial practices of a USAID contractor and its nonprofit affiliate, Devex can reveal. DT Global and DT Institute have both received inquiries from the Justice Department and are cooperating with the investigation, according to a lawyer advising both organizations, who spoke to Devex and confirmed the inquiry. The investigation appears to be focused on whether direct and indirect costs related to federal contracts and grants were appropriately allocated between the two organizations, according to the lawyer, Robert Nichols of government contracts law firm Nichols Liu, and to an internal memo obtained by Devex. In response to an inquiry from Devex, DT Global and DT Institute sent statements that confirmed a civil investigation is underway, but declined to share details since the Department of Justice has not made the matter public. DT Global implements projects in conflict prevention, governance, economic development, and other areas and has been awarded roughly $100 million in the last year, the vast majority of which came from USAID. DT Institute funds and implements peace and development projects and reported roughly $17 million in revenue in 2022, its most recent filing. The Justice Department’s current inquiry follows a lawsuit filed in 2021 and first reported by Devex, which alleged that DT Global, the for-profit company, illegally misused its nonprofit affiliate, DT Institute, as a “vehicle for profit and marketing.” DT Global denied those allegations at the time. That lawsuit, initially brought by former DT Institute board member James Prince and joined in 2022 by Washington, D.C.’s Office of the Attorney General, was ultimately withdrawn last year after DT Institute agreed to change its bylaws and replace its CEO, appointing Pia Wanek in June 2023. In their statements to Devex, which were identical, DT Global and DT Institute wrote that the current investigation is “similar” to the D.C. Attorney General’s case, which the organizations noted was “closed with no adverse findings.” “We are fully confident that our operations and practices are highly professional and ethical, and that the Department of Justice will again come to a resolution with no adverse findings,” they wrote. The Justice Department’s current investigation is just getting underway. On Feb. 28, Wanek, DT Institute’s CEO, sent a confidential memo — which Devex obtained — to select staff, informing them that the inquiry is “related to DT Global’s Federal contracts and grants,” and instructing them to preserve any related documents and materials. “The inquiry appears to be focused on allocation of indirect and other costs to Federal contracts and grants, allowability of charged costs to Federal contracts and grants, and representations and documentation related to the same,” Wanek wrote. Indirect costs typically include expenses that are not directly connected to the implementation of a specific project, such as office space rentals and managerial staff salaries. The memo states that the period under scrutiny is from Jan. 2019 until Feb. 2024. It notes that the inquiry is “in its early phases” and that there has been no finding yet of any wrongdoing by DT Institute or DT Global. The Department of Justice declined to comment in response to an inquiry from Devex. “DT Global and DT Institute each follow their own governance and cost structures, which were developed by leading outside experts. Both organizations are confident that their systems and people are compliant with all applicable laws and regulations,” Nichols, the attorney advising both DT Global and DT Institute, wrote to Devex. “DT Global and DT Institute are fully cooperating with this latest inquiry, which overlaps substantially with prior government reviews and independent audits,” he added. Nichols told Devex that both USAID and the U.S. Department of State, from whom the two organizations receive funding, have been informed of the Justice Department’s inquiry. He added that neither has suspended funding or programs as a result. In response to an inquiry from Devex, a USAID spokesperson wrote: “We take all allegations of corruption or assistance mismanagement seriously and, as appropriate, will address them with our partners on the ground, including sharing them with our Office of Inspector General.” The Department of State declined to comment and referred questions to USAID and the Department of Justice. DT Global was created in 2019 from private company Development Transformations and the international development division of the for-profit corporation AECOM, and in 2022 acquired IMC Worldwide and Cardno International Development. DT Institute was also launched in 2019. Both are based in Washington, D.C., and share the same address. Both DT Global and DT Institute were founded by John DeBlasio, a former security contractor and the founder of the Global Peace and Development Charitable Trust, a Bermuda charitable trust, whose trustee is the JPD Private Trust Company, an entity registered in Bermuda. Global Peace and Development Charitable Trust serves as the general partner of DT Global through the charitable trusts’ wholly owned subsidiary, GPD Charitable Holdings, and therefore controls the “DT Global family” of organizations. Update, May 14, 2024: This article has been updated to clarify that only DT Institute changed its bylaws in 2023, to clarify the ownership structure of the two organizations, and to include comments from a USAID spokesperson.