Nonprofit IRD will take USAID to court over suspension

International Relief and Development, the nonprofit organization suspended earlier this year by the U.S. Agency for International Development for “serious misconduct,” will pursue legal action against USAID to have the suspension lifted, according to IRD President Roger Ervin. The IRD chief — and former secretary of revenue for Wisconsin — told Devex he and his legal team at Foley & Lardner LLP, his own former firm, are suing the agency for violating the “Administrative Procedure Act” and for what they consider an “arbitrary, capricious abuse of discretion.” An official IRD spokesperson who wished to remain anonymous told Devex the courts in Washington, D.C., will decide in the next two weeks whether to grant an “injunctive relief” to IRD, which would effectively force USAID to lift the suspension, if upheld. “I know from experience, litigation is the natural next step when so much evidence is missing,” Ervin told Devex. Ervin took the helm of IRD in December 2014, just over a month before the suspension brought the overwhelming majority of the nonprofit’s operations to a halt. Formerly the largest USAID nonprofit contractor working in Iraq and Afghanistan, IRD was suspended in January 2015, blocking the organization from receiving new federal contracts and stripping it of much of its existing program portfolio. A string of financial misconduct allegations had plagued the organization, previously run by founder Arthur Keys Jr. Lavish bonuses to the nonprofit’s founding family and senior employees and a confidentiality clause that cautioned former employees against making “critical” remarks about IRD to “officials of any government” prompted a series of reviews and ultimately a formal investigation. The organization underwent a vast reorganization at Ervin’s direction, the adoption of new financial safeguards and the complete dismissal of IRD’s board of directors. To no avail, Ervin told Devex. He said USAID has shirked suspension and debarment protocol by “completely ignoring” the measures as well as years’ worth of disclosed financial records. The legal brief filed on behalf of IRD Tuesday claims “USAID used IRD’s own transparency against it.” It also claims the suspension was “politically-motivated,” describing an attempt to appease Congress’ calls for increased oversight by cracking down on IRD. “It’s hard to take [the Office of Acquisition Assistance] and Bureau of Management seriously about their assertions when they haven’t done even the basic things, the basic checks and evaluations,” Ervin told Devex. Ervin appealed to the human cost of the suspension, criticizing USAID’s “zero-sum” approach to development as harmful to beneficiaries in places like Iraq, Afghanistan and Syria, where IRD formerly implemented refugee programs. “There’s been a gap in services for at-risk people in some of the most volatile places on earth,” Ervin said. USAID press officials did not respond to requests for comments in time for publication. Stay tuned to Devex for more news and analysis of U.S. aid, and subscribe to The Development Newswire to receive the latest from the world’s leading donors and decision-makers — emailed to you FREE every business day.