'Radical change': Inside Trump's State Department takeover of USAID

Yahoo

24-02-2025

Pete Marocco, the Trump administration official tasked with the dismantling of the U.S. Agency for International Development (USAID), at a private "listening session" held at the State Department earlier this month with dozens of aid groups -- some on the brink of financial collapse -- made a request prior to the start of the meeting, according to multiple people who were in the room: that everyone stand for the Pledge of Allegiance.
Inside the Loy Henderson Conference Room, representatives from aid organizations, industry groups, and foreign embassies -- reeling from the administration's sweeping freeze on foreign aid and the unraveling of USAID -- dutifully rose to their feet.
The aid groups were there in the hope that Marocco would provide answers on the future of foreign assistance. After the Pledge, Marocco outlined the Trump administration's foreign aid plans, defending what he called a "total zero-based review," and arguing that some areas of foreign aid required "radical change" before taking questions from those in attendance, according to an audio recording of the private meeting obtained by ABC News.
Multiple sources who attended the Feb. 13 meeting described the mood in the room as "deeply uncomfortable," saying that some of the attendees who were representing groups teetering on bankruptcy were left "traumatized" by the tone and the lack of specific details.
During the discussion, a representative for World Vision, a global Christian humanitarian organization, asked Marocco about the impact of the freeze, noting that aid groups like his had been forced to bankroll U.S. government-funded programs with private money while awaiting overdue payments to be unpaused.
"Will the spigot open? We've gotten waivers, but the PMS system isn't operating, so we're bankrolling U.S. government-funded programs out of private money," said Edward Brown, the vice president of World Vision, which provides poverty alleviation, disaster relief, and child welfare in nearly 100 countries.
Marocco responded that following President Donald Trump's executive order halting foreign aid, some transactions were still being processed, prompting his team to "seize control" of the payment system to stop them -- leaving some groups without payments that, weeks later, had still had not arrived.
MORE: Judge 'dissolves' order preventing Trump administration from overhauling USAID
"As far as payment, one of the reasons that there have been problems with some of the payments is because, despite the president's executive order, despite the secretary's guidance, we still had nefarious actors in the agencies that were trying to push out hundreds of illegal payments," Marocco said. "And so we were able to seize control of that, stop them, take control of some of those people, and make sure that that money was not getting out the door."
Marocco suggested that payments for organizations with existing contracts would resume the following Tuesday.
"I feel confident we're going to have that pretty good by Tuesday of next week," he said. "That does not mean everybody's going to be caught up on everything that they want. But I think that our payment system will probably be fluid at that point."
But Tuesday came and went, and many groups say they were still on the edge of bankruptcy -- prompting some to escalate their legal battle against the administration.
On Monday, several USAID officials told ABC News that the payment system Marocco said would be fully restored was now technically operational, but that funding was still moving at an extremely slow pace and that many of the programs that were granted waivers to continue operations had still not received any money.
USAID officials said the lack of funding has rendered many of the exempted programs inoperative. Some have resorted to using stockpiled resources, but because these programs have been cut off from federal support for weeks, most report that they have few funds left and don't anticipate they will be able to function for much longer, according to the officials.
On Friday, after a federal judge cleared the way for the administration to proceed with its plan to pull thousands of USAID staffers off the job in the U.S. and around the world, the Trump administration moved forward with its effort to dismantle USAID, telling all but a fraction of staffers worldwide that they were on leave as of Monday.
In a court-ordered affidavit filed last Tuesday, Marocco wrote that the agency "has authorized at least 21 payments" for grants, loans, and other foreign aid executed before Trump's inauguration "that are in total worth more than $250 million and are expected to be paid this week."
As of Monday, it was not clear whether those payments had been made.
When reached for comment, World Vision would not confirm to ABC News if payments had resumed, but told ABC News they were "complying with the executive order that pauses U.S. foreign assistance funding -- with potential waivers for emergency food and lifesaving humanitarian assistance -- for the next 90 days, while programs are reviewed for alignment with the current administration's foreign policy."
In one tense moment during the listening session, a senior Democratic Senate staffer pressed Marocco on whether, once the payments resumed, they would include reimbursements for work incurred before the Jan. 24 freeze.
"When payments resume, will they include work incurred before Jan. 24 in the payments forthcoming on Tuesday?" asked the staffer, who, when reached for comment by ABC News, asked not to be named our of fear of retribution.
Marocco would not guarantee that government-contracted work that occurred before the freeze would be reimbursed, stating that the Trump administration would only cover "legitimate expenses" -- and noting that the administration's definition of a legitimate expense may differ from the groups in the room.
"We will be looking at those," Marocco said. "What we consider to be legitimate may not be the same thing that other people consider to be legitimate, but we're going to."
The staffer attempted to follow up, arguing that if the work had been incurred before the freeze, "it was legitimate at the time, right?"
"We've moved on to the next person," Marocco responded.
MORE: Aid groups tell judge that Trump's foreign aid pause has 'devastated' operations
In his affidavit filed on Tuesday, Marocco conveyed the scope and status of the government's aid freeze. He wrote that, since Trump signed the executive order for a 90-day freeze, USAID had terminated nearly 500 grants and contracts. He said the agency "has not quantified" the total cost of those programs.
As of Tuesday, the State Department had terminated more than 750 foreign assistance-funded grants and contracts of its own and had suspended nearly 7,000 more, Marocco wrote.
Marocco used the meeting with the organizations to paint a dire picture of U.S. foreign aid, claiming it had "devolved into a fiscal cycle of dependency, of presumption, arrogance, and frankly, folly, that is just astonishing." He dismissed past reform efforts as ineffective, arguing that officials had merely "nibbled around the edges" rather than addressing what he saw as systemic failures.
He insisted the review was necessary to force difficult conversations about "what these programs are actually doing" and whether they should continue at all. And he framed the overhaul as part of President Trump's broader effort to reshape Washington's approach to foreign assistance.
"The American people deserve better. They require better. And President Trump has promised better," he said, criticizing aid decisions made "behind closed doors in Congress, in small groups in Washington, D.C."
Marocco told those gathered that the administration's review extended beyond USAID and would encompass a range of federal agencies, including NASA, the Patent and Trademark Office, the Millennium Challenge Corporation (MCC), and the U.S. Agency for Global Media (USAGM).
"If there is a tax dollar that is going out to a foreigner, we need to gain control of that and understand what it is we're trying to achieve with our partners," he said. "We want to identify all of that. We want to fix it. That's the goal."
Marocco made clear that the new foreign aid structure would be tied to Trump's political priorities.
MORE: USAID worker blames 'stress and strain' of Trump's aid freeze for wife's pregnancy scare
"With the Secretary of State, you will be in line," Marocco said. "The foreign assistance review, you will follow the president's foreign policy objectives. Or you will not be spending money abroad."
He told the aid groups in the room they needed to justify their programs.
"You need to think about convincing someone -- perhaps one of the women who is in my mother's Bible study," he said. "You need to think about somebody who's working at a McDonald's in Mississippi. You need to think about a grad student in Harlem."
Marocco also told those gathered that if they wanted funding to continue, they needed to ask themselves, "Does it give the president real influence? Does this actually give the president national security and foreign policy influence abroad?"
If it doesn't, he said, "I would say there is a slim chance that this actually is achieving anything that is worthwhile for American foreign policy."
The Trump administration has received widespread condemnation from Democrats in Congress over its effort to slash foreign aid programs. "What Trump and Musk have done is not only wrong, it's illegal," Rep. Don Beyer of Virginia said earlier this month during a news conference outside USAID headquarters. "USAID was established by an act of Congress, and it can only be disbanded by an act of Congress. Stopping this will require action by the courts and for Republicans to show up and show courage and stand up for our country."
The Feb. 13 meeting came as the legal battle over the aid freeze was escalating. Last week, a coalition of aid groups asked a federal judge to intervene, arguing that the freeze violated existing funding agreements and had caused "catastrophic" harm to their humanitarian missions. U.S. District Judge Amir Ali issued a temporary restraining order halting the freeze, but aid organizations said their funding remained locked, leaving them scrambling to keep operations afloat.
Late Tuesday, Trump administration attorneys filed court papers arguing that their interpretation of the judge's order allows the freeze to largely remain in place. The aid groups fired back Wednesday, urging the court to enforce the ruling.
"The court should not brook such brazen defiance of the express terms of its order," they wrote in the filing.
Judge Ali, a Biden-era appointee, wrote Thursday that while Trump administration officials had "not complied" with his order, he would not hold them in contempt of court.
But he warned those officials not to buck what he characterized as his "clear" directive to lift their "blanket freeze" on aid disbursements.
'Radical change': Inside Trump's State Department takeover of USAID originally appeared on abcnews.go.com