Aid to Palestine Has a Vetting Problem, Endangering Biden’s Gaza Policy

The U.S. government’s struggle to properly vet aid provided in terrorism hotspots, including in the Palestinian Territories, casts a shadow over the Biden administration’s efforts to end the war in Gaza and pressure Israel to establish Palestinian rule in the coastal strip.

The Biden administration’s plans for post-war Gaza center on boosting the Palestinian Authority (PA), which currently controls significant portions of the West Bank and is ruled by the Fatah party, to take control despite consistent corruption warnings and poor governance, Just the News reported last week.

Recently, the Biden administration announced it would help construct a special pier to deliver humanitarian resources to the strip while Israel prosecutes its war on Hamas.

However, the records of the State Department and the U.S. Agency for International Development (USAID) in delivering funds to Palestine and other terrorism hotbeds, like Afghanistan, are less than stellar.

For example, the grant money to the Phoenix Center for for Research and Field Studies, the Gaza-based group, is just one brick in a larger structure of U.S. aid that ends up in the hands of hostile groups.

Two State Department grants to the Phoenix Center for for Research and Field Studies, a Gaza-based group with alleged terrorism ties, illustrates a key problem, one foreign policy expert told Just the News.

A report from NGO Monitor, a watchdog organization that tracks global non-governmental organizations, originally found that the Biden's State Department had given two grants to the Gaza-based organization called the Phoenix Center for Research and Field Studies. The first grant was for about $30,000 for a program that began in August 2023 and is set to end in July of this year. A second grant was slated for $60,000, though it was “deobligated” in February due to the “current situation,” according to USASpending.gov.

“This specific case of the Phoenix center is clear, two members of Congress have directed that letter, and then they want answers. But this is only the tip of the iceberg,” Walid Phares, a foreign policy analyst and author of several book on Iran, told the "Just the News, No Noise" TV show in an episode set to air Wednesday.

Phares warned that ideologically sympathetic bureaucrats at the State Department and USAID may be contributing to a vetting problem in the U.S. government.

“So when an organization is basically, you know, spreading the ideas, the ideologies of Hamas, and somebody within our own bureaucracy says, well, that's fine: this is a liberation movement, this is a resistance movement, they find stuff about it to convince the decision makers to grant them money. The problem is not anymore this organization, it's us, it's our bureaucracy,” Phares said.

"And it’s not just the Phoenix Center,” Phares added. "Aid has been channeled to Gaza, aid has been channeled to NGOs, so called NGOs in Lebanon, who appeared later on to be you know, a front for Hezbollah. Same could be said about Iraq and eastern Syria and other places, I would even include Yemen,” he explained.

In the past, some of these agencies have funded groups with ties to terrorist organizations and nongovernmental organizations whose employees participated in attacks. Additionally, an internal USAID watchdog previously warned about the dangers of aid diversion by nefarious actors.

Just months before the October 7 terrorist attacks against Israel last year, the State Department funded the Phoenix Center with two separate grants. The organization is accused of having a close relationship with Palestinian terrorist organizations and of supporting “resistance” against Israel.

In September, shortly before the terrorist attacks by Hamas, Rep. Christopher Smith, R-N.J., and Rep. Gus Bilirakis, R-Fla., sent a letter to the State Department seeking answers about the grants to the Phoenix Center and its terrorist ties.

The State Department did not answer questions from Just the News about the grants. The Phoenix Center did not immediately respond to inquiries about the allegations from NGO Monitor.

NGO Monitor found the Phoenix Center hosted events, workshops, and discussions with senior leadership of both the Palestinian Islamic Jihad and the Popular Front for the Liberation of Palestine, two groups designated as Foreign Terrorist Organizations by the U.S. government.

But the Phoenix Center funding is not an isolated concern. United States funding for groups in terrorism hotspots through a variety of intermediaries has come under scrutiny since the latest attack on Israel, most pressingly by members of Congress.

In October, the House Oversight Committee sent a letter to USAID Administrator Samantha Power after the Biden administration announced plans to send an additional $100 million in aid to Gaza and the West Bank.

“It is vital to fully account for U.S. funds intended for humanitarian purposes to ensure they do not directly or indirectly fund terrorism,” the Congressmen wrote.

The committee was particularly concerned because of internal State Department warnings from 2021 expressing concerns that aid money to the area could fall into the hands of Hamas.

“Due to its overall strength and level of control over Gaza, we assess there is a high risk Hamas could potentially derive indirect, unintentional benefit from U.S. assistance to Gaza. There is less but still some risk U.S. assistance would benefit other designated groups,” the State Department wrote in an early March 2021 draft memo to the Treasury Department.

In October, USAID’s internal watchdog, its Office of Inspector General, released a memo warning that Gaza is a high-risk area for “potential diversion and misuse” of U.S.-funded humanitarian assistance.

“It is USAID OIG’s investigative priority to ensure that assistance does not fall into the hands of foreign terrorist organizations (FTOs) including, but not limited to, Hamas,” the Fraud Awareness warning released last October reads. This warning came at the same time as the Biden administration’s announcement of further aid to Gaza amid the escalating war between Israel and Hamas.

In January, the State Department announced it would halt all funding the U.N. Relief and Works Agency (UNRWA) after evidence surfaced several of its employees participated in the Oct. 7 terrorist attack on Israel.

The commissioner-general of the U.N. Relief and Works Agency for Palestine Refugees in the Near East said in January UNRWA would suspend the alleged participants and launch an internal investigation.

UNRWA has been criticized in the past over anti-Israel and antisemitic material contained in its educational materials, which are distributed in many Palestinian schools. In 2021, the German newspaper BILD reported on incidents of anti-Israel and -Jewish content from UNRWA educators – including praise of Hitler – and in educational materials, including an in-class exercise that labeled a Jewish bus attacked by Palestinian arsonists a "barbecue."

An internal UN audit of the organization also found that it was susceptible to "misappropriation, graft and corruption.”

In 2018, the Trump administration ended funding for UNRWA over these and other concerns. President Biden resumed funding shortly after taking office and has sent nearly $730 million to UNRWA.

The track record of aid to Palestine affiliated organization extends to the Palestinian Authority, the government the Biden administration is pressuring Israel to help install as the ruling government of the Gaza Strip after the war. The PA has its own history of corruption allegations and policies that are believed to encourage terrorism, Just the News reported last week.

For example, in 2016, the head of the PA’s own anti-corruption body recovered $70 million in misappropriated funds over the course of a five-year investigation. Rafiq al-Natsheh, who chaired the anticorruption commission, said “tens of millions of dollars” were still not tracked down, in part because some funds had vanished after being sent abroad, Reuters reported.

This is just one example of a pattern of “embezzlement, abuse of power, fraud, breach of trust, and bribery” that one Palestinian anti-corruption organization found in pending cases before the territory’s anti-corruption court.

Concerns about how to safeguard U.S. aid into Gaza are similar to concerns about aid to other terrorism hubs, like Afghanistan. A pattern that mirrors aid to Gaza was uncovered in Afghanistan—the home of the Taliban, ISIS-Khorasan, and other terrorist organizations.

An October 2023 report from the Special Inspector General for Afghanistan Reconstruction (SIGAR) found that U.S. education assistance to Afghanistan provides both indirect and direct benefits to the Taliban, the ruling Islamist group that seized control of the country after the U.S. August 2021 withdrawal. Congress created SIGAR in 2008 to provide independent and objective oversight of Afghanistan reconstruction projects and activities.

SIGAR found that the Taliban established its own “fraudulent NGOs” to obtain access to donor funds as well as “infiltrating and extorting existing” Afghan educational NGOs to co-opt the financial assistance from the United States.

SIGAR also found that the Taliban establishes its own “fraudulent NGOs” to obtain access to donor funds as well as “infiltrating and extorting existing” Afghan educational NGOs to co-opt the financial assistance, Just the News reported in November.