A recent Senate investigation has now reportedly uncovered that the U.S. Agency for International Development (USAID) allocated funds intended for Ukrainian economic relief to finance extravagant activities, including sending Ukrainian models and designers to international fashion events such as Paris Fashion Week.
Senator Joni Ernst of Iowa revealed that USAID concealed these expenditures by misclassifying them as “classified,” thereby obstructing congressional oversight.
The probe found that USAID’s “Competitive Economy Program (CEP)” disbursed substantial sums to various Ukrainian enterprises.
Beneficiaries included a modern women’s attire company ($150,000), a fashion design house’s trade mission ($128,000), a fashion photographer ($126,000), a contemporary knitwear purveyor ($161,000), a luxury bridal brand ($84,000), and a marketplace for designer artisanal pieces inspired by folk crafts ($84,000).
Additional funds were allocated to a vineyard ($89,000), an artisanal fruit tea company ($104,000), a custom carpet manufacturer ($2 million), a confectionary company ($678,000), a dog collar manufacturer, and an upscale furniture designer.
Senator Ernst criticized USAID for its lack of transparency and resistance to oversight.
She recounted that the agency imposed stringent conditions on her staff’s access to financial records, falsely labeling them as classified to impede scrutiny.
Ernst’s review revealed that over 5,000 Ukrainian businesses received U.S. taxpayer-funded assistance through programs like CEP, Investment for Business Resilience (IBR), Credit for Agricultural Producers (CAP), and Agriculture Growing Rural Opportunities (AGRO), with individual awards reaching up to $2 million.
“From my staff’s review of the data on USAID assistance to businesses in Ukraine thus far, it seems clear why USAID is trying to withhold information from Congress. Based on the in-camera review, it appears that over 5,000 Ukrainian businesses received U.S. taxpayer funded assistance through the Competitive Economy Program (CEP), Investment for Business Resilience (IBR), Credit for Agricultural Producers (CAP), and Agriculture Growing Rural Opportunities (AGRO) programs with awards of up to $2 million each.” Ernst noted.
The investigation also highlighted that USAID permitted non-governmental organizations to retain more than 25% of grants for “indirect costs,” such as office rent.
When questioned, the agency claimed legal constraints prevented it from providing information necessary to assess the appropriateness of these allocations.
This revelation has intensified concerns about the effective use of American taxpayer dollars designated for foreign aid, especially in conflict-affected regions like Ukraine.
Senator Ernst’s findings suggest a pressing need for enhanced oversight and accountability within USAID to ensure that funds are utilized as intended and not diverted to superfluous ventures, or perhaps it is time to completely abolish the agency as many conservatives have suggested.
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