Exclusive: USAID director alleges 'malfeasance' since Trump aid freeze

For the last six months, Andrea Capellán has been asking questions — and as a director at USAID’s Office of Acquisition and Assistance, she had expected answers. But ever since the Trump administration froze foreign aid in January, Capellán — and countless other contracting officers at the U.S. Agency for International Development — were met with silence, chaos, and a “minefield of questionable and potentially illegal orders.” That’s according to a memo Capellán filed on July 28, which was sent to Rebecca Krzywda, USAID’s deputy assistant administrator in the Bureau for Management; Michael Capobianco, the acting director of Capellán’s office; and the USAID inspector general. It was obtained and verified by Devex the following day. “In the end, stripped of our positions and denied lawful guidance, institutional accountability, and ethical leadership, all I could do was bear witness, document the truth, and refuse to lend my name to actions that violated the law and the public trust,” wrote Capellán in the memo, which was titled “General Malfeasance by USAID and its Office of Acquisition and Assistance.” The six-page document has more than 40 memos, email chains, and official notices, each of which paints a tumultuous picture of the last six months. Capellán laid out accusations of improper decision-making and contracting authorities, arguing that dozens of questions asked by contracting officers were never answered, and that those without proper authority to terminate contracts did so en masse. She also said the agency failed to comply with court orders, adding that contracting officers received little information on how to pay partners back when a judge mandated doing so — and despite Secretary of State Marco Rubio claiming that he had individually reviewed each award, no approval memos Capellán found were “signed, or even properly cleared” by Rubio. And, Capellán accused the agency’s General Counsel's Office of leaving contracting officers “completely alone and unprotected,” circulating a 2011 memo for guidance that included “no facts pertaining to our current situation.” The latest memo follows another dated July 1, in which Capellán accused Jami Rodgers, the senior procurement executive at USAID, of “systemic negligence” since the Trump administration’s stop-work order in January. Neither Rodgers nor the State Department could be reached for comment in time for initial publication. “This is exactly how all serious issues, concerns, and questions have been dealt by USAID leadership, including the SPE [senior procurement officer], ignore, ignore, ignore,” she wrote. “This is not a responsible nor legal method to dealing with the very serious and very costly matter of federal contracts and grants.” For some former contracting officers, the memo told the story of the last six months — outlining how a “sham” foreign aid review had been forced on USAID’s contracting officers. “This memo outlines the bravery of rank and file career USAID staff in exposing the sham ‘foreign assistance review’ ordered by the Secretary of State,” a former contracting officer told Devex, speaking on the condition of anonymity for fear of professional reprisal. But others argued that instead of focusing on higher-level agency officials, the blame should have been laid squarely on those at the top: the budget-slashing Department of Government Efficiency (DOGE), Rubio, and President Donald Trump. “This is a great memo, but she sent it to the wrong people,” said another senior contracting officer. “This was an environment where if you went against anything, you were fired.” Either way, the memo is damning — and the Trump administration was far from spared. Capellán described how termination orders came from DOGE “and others without any official capacity” at USAID. That included Matthew Johnson, who was then serving as USAID’s industry liaison. At noon on Feb. 6, Johnson told USAID’s contracting officers to issue nearly 800 termination notices immediately — and to provide updates at 3 p.m., 5 p.m., and 7 p.m. with their progress. At USAID, only contracting officers with a warrant — a formal delegation of legal authority — can modify or terminate contracts on behalf of the U.S. government. Acting without that authority is not just a technical violation, it can render the action legally invalid, expose the government to financial liability, and erode the integrity of the procurement process. But when Capellán said she asked Johnson why they were terminating such awards — and under which authority — Johnson allegedly told Capellán it was a request from three DOGE officials, none of whom had experience at USAID. “Mass terminations were issued … using inappropriately signed documents, new generic email accounts, and without any of the required legal authorities, effective dates, supporting documentation, or partner-specific analysis,” Capellán wrote in one of the attached memos, which was dated July 1. “One termination letter was issued to ‘Miscellaneous Foreign Awardees,’ indicating that even basic due diligence was abandoned.” Capellán also wrote about how a lack of signatures, clearance, and email copies made it seem as if Secretary of State Marco Rubio did not appraise any of the contracts, despite the government’s assertions that Rubio had “individually reviewed” each termination. That has been a core argument for the Trump administration, which has been engaged in an ongoing legal battle with several USAID partners for months. On Feb. 11, a group of organizations sued the government for dismantling USAID, arguing that the foreign aid freeze was done “illegally and unconscionably.” Over the next several weeks, U.S. District Judge Amir Ali repeatedly ordered the Trump administration to pay its partners for past work. By the end of February, the government responded by canceling 10,000 USAID awards — and its lawyers defended those cuts by claiming they were conducted through a “good-faith, individualized assessment,” by Rubio himself. In some cases, that does seem to have happened: Capellán includes an email chain where Jeremy Lewin — who was then a DOGE official, but today is USAID deputy administrator — noted that 15 programs slated for cancellation were removed from the termination tranche by “S,” referring to the secretary of state. But in the same email chain, Michael Needham, Rubio’s chief of staff, stated he was “approving on Sec. Rubio’s behalf” without copying Rubio in the message. The cuts were done in eight tranches, Capellán explained, with the email chain above referring to the fourth set of awards. After searching through the agency’s shared Google Drive, Capellán was only able to find two approval memos from the secretary of state, neither of which were signed. “I requested the rest of the supporting documentation for Tranche 1-8, but was not provided any,” Capellán wrote in the memo. “Given all of this information, I do not believe there is any evidence of individual determinations or analysis for any USAID awards.” She wasn’t the only one asking questions. In early February, Capellán and several others asked the agency’s acquisition leadership 25 questions about the cuts, from whether Congress had been notified to whose authority was being used to order terminations. Over and over again, the same question was repeated: Why were these contracts being canceled? “The majority [of those questions] were never answered,” Capellán said in the memo. It does seem as if at some point, contracting officers were given information in the form of a question-and-answer document, according to the memo. But by Feb. 23, Johnson told contracting officers that the document had been “withdrawn” due to several “outdated” citations that stated programs were canceled to comply with the president’s foreign aid freeze. Days earlier, Ali had barred USAID from terminating programs unless it was doing so under existing agency regulations — such as termination after a case-by-case review. Johnson could not be reached for comment in time for publication. Lauren Bateman, the attorney representing the USAID partners suing the Trump administration, called Capellán’s memo “stunning.” Bateman added that it confirmed what those partners had been arguing throughout the case: that the administration terminated the awards en masse, not on an individualized basis. “This internal agency document corroborates that there was no such individualized review,” said Bateman, an attorney with Public Citizen Litigation Group. “It also shows that the Administration has ignored both court orders and numerous communications from officials within USAID raising concerns about the illegality of the Administration's actions.”