Red flags raised after Trump officials gutted the staff overseeing $1 billion in foreign aid

Iraq is one of the top recipients of American assistance, and the U.S. foreign aid agency manages more than $1 billion in projects there, including funding for Iraqi religious minorities pushed by Vice President Mike Pence. But increasingly, the agency doesn’t have people on the ground to make sure the money is being well-spent.

The U.S. Agency for International Development has been forced to cut nearly 80% of its non-Iraqi staff in Iraq in the last year, even as the agency funds large, ambitious and complex aid projects there. A critical government watchdog report released this week said USAID officials reported the cuts “have had significant adverse effects” on the oversight and management of grants.

As ProPublica detailed this month, Pence’s office has pressured USAID to support local groups representing Iraqi minorities, particularly Christians. The watchdog report released this week said, in the context of the staff reductions and uncertainty, overseeing local groups “is particularly challenging given that awards to local organizations require increased involvement.”

One small charity that recently received a USAID grant and primarily serves Christian Iraqis has no full-time paid staff and no experience with government grants.

Overall, the report notes that USAID now has no staff based permanently in Iraq to oversee $430 million in basic humanitarian aid, such as food, safe drinking water and medical services. USAID officials manage the funding remotely via phone calls, reports from implementers and temporary visits, the report said.

As a result, “staff are only able to engage in the bare minimum coordination” with the rest of the U.S. government, the Iraqi government and the international community, USAID staff told the inspector general.

In May, Secretary of State Mike Pompeo ordered a partial evacuation of U.S. personnel in Iraq in response to concerns over threats from Iran. The ordered departure has been controversial, and diplomats have criticized what they view as a gutting of core diplomatic functions in Iraq.

That decision, combined with an earlier State Department move to shrink the USAID mission, reduced the agency’s non-Iraqi staff from 26 at the start of the 2019 fiscal year to six by this fall, the report said. Some of those officials relocated to Washington, while others transferred to Germany.

USAID, the State Department and Pence’s office did not respond to questions. In response to the prior ProPublica story, a USAID spokeswoman said local grants in Iraq follow all federal regulations and have empowered those groups to respond to “grassroots needs.”

The report, which covers the period between July 1 and Oct. 25, was jointly prepared by the inspectors general of USAID, the State Department and the Pentagon.

The watchdog report said the Pompeo-ordered departure had been extended through Nov. 9, citing reports of violence and threats to diplomatic personnel. In July, Foreign Policy reported that the lower staffing levels are being treated as permanent.

USAID manages $1.16 billion in assistance in Iraq, spanning development, humanitarian aid and stabilization efforts, according to the report.

That “large portfolio,” coupled with the staff reductions, “create uncertainty as to how programs will be overseen remotely,” the report said. “Uncertainty around staffing levels also raises questions about USAID’s continuing ability to effectively oversee its high-priority, high-risk portfolio.”

U.S. assistance in Iraq includes over $400 million for religious and ethnic minorities targeted by the militant group Islamic State. That has been a major priority for Pence, as well as for conservative Christian groups and vocal communities of Iraqi Christians.

A new component of that effort was announced by USAID last month: $4.1 million to six local Iraqi organizations. ProPublica previously found that political appointees played a significant role in the latest awards.

The awardees included two groups that had been rejected by career officials for separate grants in Iraq in 2018. One of the groups, the Shlama Foundation, is a small charity that primarily serves Christian Iraqis; it will receive $1 million over two years. It has no full-time paid staff and no experience with government grants, a Shlama board member, Ranna Abro, previously told ProPublica.

Shlama did not respond to a request for comment this week, but Abro said previously that it is capable of handling the work, and that USAID had “fully and completely reviewed our capacity and is releasing the funds in small, manageable amounts based on deliverable outcomes.”

USAID has exacting requirements for its funding, requiring groups to provide extensive background and financial information. Small organizations often are less equipped to fulfill those requirements and need particularly close oversight from agency officials, experts on foreign aid said.

The watchdog report addressed the latest awards to local Iraqi groups, and it said their structure “relies on in-country expertise from USAID personnel to train local organizations on the requirements of receiving U.S. funding.” It added: “According to USAID, this is particularly challenging given that awards to local organizations require increased involvement.”

The report also raised questions about the effectiveness of some of USAID’s efforts toward Christians and other minority groups in Iraq.

For instance, one major USAID goal in Iraq has been to encourage the return of Christians, Yazidis and other groups to their homes in northern Iraq, which they fled after Islamic State took over swaths of the country. Last year, USAID administrator Mark Green said the agency was “committed to creating the conditions so that these communities can return safely to their ancestral lands.”

But officials have acknowledged relatively modest returns on the effort thus far. In September, senior USAID official Hallam Ferguson said the returns of persecuted religious minority groups to their homes still “lag far behind” other displaced groups in Iraq.

“We are struggling against tectonic forces in Iraq,” including decades of government neglect and discriminatory policy, more than 15 years of sectarian strife and unchecked local armed groups, Ferguson said in testimony to the U.S. Commission on International Religious Freedom.

According to the watchdog report, USAID officials have said that obstacles in Iraq cannot be resolved without more diplomatic engagement, made far more difficult by Pompeo’s drawdown. The report cited disputes between local Iraqi political leaders that had allowed a “vacuum of governance” to develop in Sinjar, an area of Iraq that includes many religious minorities.

“The longer these barriers remain in place, the more significant the questions grow about the potential effectiveness of these assistance efforts,” the report said.