How USAID Funded Hamas

The United States Agency for International Development (USAID) was created in 1961 with a clear mission: to deliver foreign aid, alleviate poverty, promote economic development, and support democratic institutions in regions facing conflict or disaster. But in recent years, that mission has eroded. What began as a well-intentioned arm of American soft power has transformed into a politically manipulated pipeline, used to advance ideological goals and, in some cases, fund groups tied to terrorism, including Hamas.

A USAID mural in the village of al-Badhan

A Tool for Destabilization

USAID was designed to project American values abroad and help fragile states avoid collapse. Increasingly, it has become a vehicle for ideological export and domestic political entrenchment. Rather than simply providing clean water, medical care, or educational support, it has funded NGOs and civil society projects that align with left-leaning social agendas and political activism.

Many of these NGOs operate with limited oversight, allowing partisan political actors to cycle between campaign work and nonprofit administration. It is common to find staff who alternate between roles in political campaigns, think tanks, and USAID-funded organizations depending on the electoral calendar. This has created a system where taxpayer money is funneled from the U.S. Treasury to private networks that promote their own worldview under the pretext of humanitarian aid.

Direct Support to Hamas-Controlled Projects

Some of the most serious allegations relate to USAID's funding practices in the Palestinian territories. A 2025 report by the Middle East Forum, supported by findings from NGO Monitor, revealed that USAID awarded over 164 million dollars in grants to radical organizations, including 122 million to groups aligned with designated terrorist entities.

These outcomes were not just the result of oversight failure. The USAID Inspector General had repeatedly flagged weaknesses in vetting procedures. Despite these warnings, federal dollars were still directed to Hamas-controlled offices in Gaza. In some cases, USAID staff even visited these locations and launched joint programs with groups that had known links to terrorist activity. In 2022 alone, Mercy Corps, a USAID partner, distributed 9 million dollars in Gaza with assistance from the Hamas-run Ministry of Social Development​.

Mercy Corps has denied any coordination with Hamas, claiming to operate independently. However, documentation cited in the report suggests otherwise. USAID has allocated over 36 million dollars for Mercy Corps projects in Gaza and the West Bank since 2021. These funds were often deployed in areas under Hamas authority. According to NGO Monitor, changes to USAID's anti-terror screening process in 2021 allowed the agency to work with organizations that support or excuse violence.

Infrastructure Funding Used for Terrorist Purposes

A high-profile case involves Palestinian-American billionaire Bashar Masri, who has been accused of using USAID-funded infrastructure to support Hamas tunnel operations. A 2025 lawsuit alleges that the Gaza Industrial Estate, which was rebuilt using funds from USAID and other international sources, was used as a logistics hub for Hamas activities​.

The complaint claims that Masri and his partners raised money from the U.S., the World Bank, and the United Nations to construct facilities that doubled as support platforms for Hamas infrastructure. These included industrial zones, hotels, and solar energy systems used to power underground tunnels involved in the October 7, 2023, attacks against Israeli civilians.

Masri has denied the allegations and maintains that he has supported peace and humanitarian efforts. Still, the evidence pointing to dual-use projects raises serious questions about the failure of USAID to prevent its resources from being diverted to terrorist networks.

Internal Political Subversion

Inside the agency, political bias also played a role in compromising USAID’s integrity. A 2025 exposé revealed that some USAID staff lobbied against military aid to Israel and pushed policies that contradicted the administration’s official stance. Under former Administrator Samantha Power, USAID refused to meet with Israeli diplomats unless Israel agreed to a ceasefire following Hamas attacks​.

These actions drew sharp criticism and fueled calls for structural reform. The Trump administration’s decision to transfer USAID’s authority to the State Department, under the leadership of Secretary Marco Rubio, was part of a broader effort to reduce the influence of politicized bureaucracies and return foreign aid to its original purpose.

A Systemic Breakdown

Senator Ted Cruz has been among the most vocal critics. He described the misuse of aid as "vast" and "secret," citing reports that USAID knowingly allowed aid to flow into Hamas-controlled areas while denying it publicly. Cruz claimed the agency exempted itself from anti-terror laws and failed to disclose key information about the recipients of American taxpayer money.

This is more than bureaucratic failure. It reflects a systemic breakdown in transparency and accountability. Americans were told their taxes were being used to support peace, development, and security. In many instances, the funds were redirected to support violent operations and militant infrastructure.

It is surprising that any meaningful action is being taken to change how USAID operates. Anyone familiar with the nonprofit and international aid sector knows how insular and self-congratulatory it can be. Many of those employed in these circles do very little of measurable impact but genuinely believe they are saving the world. Under a Democratic administration, reform would be politically impossible. But even under a Republican one, few expected real structural change. The fact that any reform is happening at all is unexpected—and long overdue.